TIAA-CREF, the national financial services organization and leading provider of retirement services in the academic, medical and cultural fields, today announced enhancements to the TIAA-CREF Lifecycle Funds. The enhancements adjust the initial asset allocation and the investment allocation "glide path," or the manner in which the lifecycle fund will slowly be reallocated over time, across all target retirement dates and are effective immediately.
All seven TIAA-CREF Lifecycle Funds now feature increased equity allocations of 90 percent at the outset of the glide path, increased from 80 percent. In addition, the glide path now extends beyond the retirement date, increasing exposure to equities at the time of retirement from 35 percent to 50 percent and will decrease to 40 percent ten years beyond the retirement date.
"Our plan participants have told us that they are continually looking to maximize the performance of their retirement investments to meet their long-term savings goals while seeking to minimize downside market risk," said Padelford Lattimer, Senior Managing Director, Product Management, TIAA-CREF. "These enhancements to our Lifecycle Funds are reflective of our nearly 90 years of experience and long-term view in designing investment allocation plans that best position our investors to get to and through retirement."
Other recent enhancements to the Lifecycle Funds include increasing exposure to international equities, adding high-yield bond exposure, introducing inflation-linked and short-term bond exposure 10 to 15 years prior to the target retirement date and reducing exposure to REITs.
These adjustments are the result of regular evaluation of the Funds, including internal research and modeling along with academic and industry research that showed that to ensure the optimal weighting, or the best return without undue risk, a higher exposure to equities and higher-returning fixed-income is advantageous. Further, this research showed that an increased allocation to inflation-linked bonds and short-term bonds as the retirement date nears may provide stability and liquidity.
"TIAA-CREF Lifecycle Funds offer a convenient alternative for investors who are looking to reduce volatility without sacrificing returns and who prefer to have their retirement plans professionally managed," added Carol Deckbar, Managing Director, Mutual Fund Products, TIAA-CREF. "The Lifecycle Funds are based on our research-driven, disciplined investment approach, drawing upon the resources of our experienced asset management team, to stay fully invested while maintaining the most attractive risk versus return characteristics."
The TIAA-CREF Lifecycle Funds invest in a selection of equity and fixed-income TIAA-CREF Institutional Mutual Funds, providing a well-diversified portfolio that dynamically adapts its asset allocation over time to meet the objectives of investors with different investment horizons. The Lifecycle Funds are actively managed by portfolio managers using a disciplined reallocation model and a relatively small number of underlying funds, which has been shown to be simpler to manage and allows for greater control of trading costs. TIAA-CREF offers Lifecycle Funds with target dates in five year increments between 2010 and 2040.
Adjustments to the new asset allocations will be made gradually based on the Lifecycle Funds' net flows and general market conditions. TIAA-CREF Lifecycle Funds are available to participants in TIAA-CREF's Employer-Sponsored Retirement Plans.
Please note that Lifecycle funds are subject to asset allocation risk and the risks associated with the underlying funds.
You should consider the investment objectives, risks, charges and expenses carefully before investing. Please call 1 877-518-9161 or view a current prospectus that contains this and other information. Please read the prospectus carefully before investing.
About TIAA-CREF
TIAA-CREF is a national financial services organization with more than $406 billion in combined assets under management (12/31/06) and the leading provider of retirement services in the academic, research, medical and cultural fields. Learn more about TIAA-CREF.
TIAA-CREF Individual & Institutional Services, LLC, and Teachers Personal Investors Services, Inc., distribute securities product
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