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For retirement plan fiduciaries who are legally responsible—and potentially liable—for prudently selecting and monitoring target date funds (TDFs), a sound investment evaluation process has never been more important.
The TDF universe has grown bigger and more complex, and is subject to greater regulatory scrutiny. Funds sharing the same target date often have vastly different asset class mixes, glide paths and fees—all of which can affect investment performance and outcomes. The right TDF for one plan may be wrong for another. And funds selected even in the recent past may no longer be appropriate today, based on changing plan goals and participant needs.
powerful online tool
to identify target date funds and simplify complex decisions:
Target Date Compass offers a holistic process for plan fiduciaries to evaluate and select TDFs, and may be looked on to help meet six of the eight considerations described in the DOL Tips.
—Groom Law Group
Target Date Compass debuted in 2008 as a first-of-its-kind tool and quickly set the industry standard for TDF evaluation, selection, documentation and monitoring. Today it remains the go-to resource for advisors seeking to inform some of their clients’ most critical plan investment decisions.
All data for fund comparisons is provided by Morningstar, one of the industry’s most trusted sources for independent investment research. Target Date Compass then uses J.P. Morgan SpectrumTM, our multi-faceted, end-to-end technology platform, to quickly and accurately deliver the latest analytics while ensuring complete objectivity.
At the heart of Target Date Compass is a map grouping together funds with similar investment orientations. Funds are plotted into one of four Target Date Type quadrants based on two key factors that may drive retirement outcomes—equity exposure at the target date and breadth of asset class diversification.
Based on 32 years of experience working on questionnaires focused on helping individuals and organizations assess investment choices, it is my judgment that the Target Date CompassSM questionnaire is objective and balanced.
—Mathew Greenwald, Ph.D., President, Greenwald & Associates*
TARGET DATE COMPASS offers easy-to-understand charts and graphs, and streamlined content to help financial advisors and plan sponsors make objective fund assessments and informed decisions.
Use our customized Target Date Analysis reports to:
TARGET DATE FUNDS: Target date funds are funds with the target date being the approximate date when investors plan to start withdrawing their money. Generally, the asset allocation of each fund will change on an annual basis, with the asset allocation becoming more conservative as the fund nears the target retirement date. The principal value of the fund(s) is not guaranteed at any time, including at the target date.
COLLECTIVE INVESTMENT TRUSTS FUNDS (COMMINGLED FUNDS): Collective Investment Trusts Funds are collective trust funds established and maintained under a declaration of trust. The fund is not required to file a prospectus or registration statement with the SEC, and accordingly, neither is available. The fund is available only to certain qualified retirement plans and governmental plans and is not offered to the general public. Units of the fund are not bank deposits and are not insured or guaranteed by any bank, government entity, the FDIC or any other type of deposit insurance. You should carefully consider the investment objectives, risk, charges and expenses of the fund before investing. Because of lack of prospectus filing or registration statement, the nature of the data provided in Target Date Compass is limited.
Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness.
Any and all information set forth herein and pertaining to the Target Date Compass and all related technology, documentation and know-how (“information”) is proprietary to JPMorgan Chase Bank, N.A. (“JPM”).
U.S. Patents No. 8,255,308 and 8,386,361.