Zurich International unveils target date fund range

Added 1st August 2017

Pension provider Zurich International has introduced a range of dollar-denominated target date funds (TDFs) aimed at gradually reducing the risk investors are exposed to as they approach retirement.

Zurich International unveils target date fund range

Each fund covers a range of five years and is designed for employees retiring within that timeframe. They are initially available for a range of retirement dates from 2020 to 2065.

How they work

The funds are designed to reduce investment risk and protect customers’ savings over time by automatically reducing the percentage allocated to equities to curb the portfolio’s overall risk as the retirement date approaches.

The launch sees Zurich team up with investment research firm Morningstar, which will advise on the asset allocation switches.

As the next five-year stage approaches, Zurich will add the 2070 fund and liquidate the 2020 fund into the Zurich Retirement Income Fund.

Product integration

Zurich's TDFs have an annual management charge of 0.55% and can only be accessed through the company’s international corporate savings products.

As such, they are designed to complement the provider’s existing range of workplace investment options and are primarily aimed at employers with a Zurich International Pension Plan.

Morningstar tie-up

Zurich has appointed Morningstar to create and manage the TDFs and provide independent advice on their asset allocation switch.

“By appointing a fully independent asset manager and incorporating an open architecture approach, the structure allows Morningstar to select from the full universe of offshore funds including both active and passive strategies,” the Swiss insurer said.

“Morningstar will continually monitor and actively manage each Target Date Fund to ensure they are aligned with the appropriate asset allocation at each stage of the investment.”

Target dated funds are among the most popular type of pension plan default strategy in the United States, with total assets under management growing to $880bn (£669bn, €748bn) at the end of 2016 up from $184bn at the end of 2007, according to data released by Morningstar.

Earlier in July, Zurich International had announced the launch of Simple Wealth, a unit-linked insurance policy to enable customers in the United Arab Emirates to manage and grow their wealth.

Visitor's Comments Add your comment

Add Your Comment

We won't publish your address

About Author

Eugenio Montesano
Eugenio Montesano

Senior Reporter

Eugenio joined International Adviser in July 2017 from Citywire, where he was editor of the Italian publications for over three years, covering the retail segment of the country’s asset management industry. Prior to that, he was an assistant producer at APTN, the Associated Press Television News, where he covered Italian politics and international news. Eugenio has a masters degree in International Journalism from City, University of London.

Features

Economics of ESG investing driving demand in Europe

Economics of ESG investing driving demand in Europe...

A growing number of institutional investors in Europe are embedding ESG analysis in their investment processes in response to regulatory pressure, consumer demand and a rising appetite for new sources...

Analysis

Profiles

Directories

Canada Life International Limited
Canada Life International...

Canada Life International Canada Life House,...

Tweets

Events

IA International Fund Links Forum 2017
IA International Fund Links Forum 2017

Thursday 14 September

The Langham, London

IA Future Advisory Forum Europe 2017
IA Future Advisory Forum Europe 2017

Thursday 28 September
The Waldorf Hilton, London

IA Best Practice Adviser Awards Europe 2017
IA Best Practice Adviser Awards Europe 2017

Thursday 28 September
The Waldorf Hilton, London

IA Best Practice Adviser Awards South Africa 2017
IA Best Practice Adviser Awards South Africa 2017

Thursday 5 October
The Vineyard Hotel, Cape Town

Sponsored Content

Investment Strategy

OTHER STORIES FROM LAST WORD...