PRUDENTIAL FINANCIAL, INC. PGIM,1 the $1.27 trillion global investment management business of Prudential Financial, Inc. (NYSE: PRU), has announced plans to enhance its suite of target date funds (TDFs) to better serve shareholders, including defined contribution (DC) plan participants, and their retirement outcomes. Primary enhancements to the suite of mutual funds and collective investment trusts (CITs) include:
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“By reducing fund expenses and integrating financial wellness into the conversation, we believe our platform can help deliver the retirement income investors need.” --Michael Miller, Head of PGIM DC Solutions (Photo: Business Wire)
- New name: Currently branded as the Prudential Day One Funds, the funds will be renamed the PGIM Target Date Funds
- Lower fees: PGIM is lowering the net expense ratio for the target date mutual funds from 0.40% to 0.25%.2 In addition, the expense ratio for the institutional share class of the CITs is expected to drop from 0.34% to 0.19%.3
- Adjustments to underlying investments: PGIM will replace select underlying actively managed equity strategies with passively managed equity strategies. This move allows PGIM to offer a thoughtful blend of active and passive management to keep investment expenses low, while providing the ability to add value and mitigate risks with active management.
The overarching investment objective and glidepath of the TDFs will remain the same, and their performance profile is not expected to change. These enhancements will become effective on or around Dec. 11, 2023.
PGIM Target Date Funds: Designed to help achieve successful retirement outcomes
PGIM’s TDF glidepath is designed to combat three of the greatest risks participants face during their lifetime.
“Whether it’s not saving enough, retiring during a period of market volatility, or experiencing high inflation during retirement – each of these scenarios can be potentially life-altering to the average American worker,” explained Jeremy Stempien, portfolio manager and strategist, PGIM DC Solutions.
To address these risks, the funds take a differentiated investment approach versus comparable TDFs, with:
- Higher-than-average exposure to growth assets earlier in the accumulation stage,
- Lower-than-average equity exposure around retirement,
- An increased allocation to asset classes like TIPS, commodities and real estate during the retirement years, which have historically performed well during inflationary periods.
PGIM RetireWell™ Solutions
The enhancements to the target date funds come on the heels of a new initiative from PGIM DC Solutions — PGIM RetireWell™ Solutions, which is focused on helping DC plan participants achieve better retirement outcomes through holistic advice and guidance. In addition to the firm’s target date funds and financial wellness offerings, PGIM RetireWell Solutions will also include retirement income strategies and managed accounts powered by PGIM’s proprietary advice engine.
“The goal of PGIM RetireWell Solutions is ultimately to help American workers achieve their saving and spending goals both before and into retirement. By reducing fund expenses and integrating financial wellness into the conversation, we believe our platform can help deliver the retirement income investors need to last over the course of their lifetime,” said Michael Miller, head of PGIM DC Solutions.
Learn more about the PGIM Target Date Funds.
ABOUT PGIM INVESTMENTS
PGIM Investments LLC and its affiliates offer more than 100 funds globally across a broad spectrum of asset classes and investment styles. All products draw on PGIM’s globally diversified investment platform that encompasses the expertise of managers across fixed income, equities, alternatives, and real estate.
ABOUT PGIM
PGIM is the global asset management business of Prudential Financial, Inc. (NYSE: PRU), a leading global investment manager with more than $1.27 trillion in assets under management as of June 30, 2023. With offices in 18 countries, PGIM’s businesses offer a range of investment solutions for retail and institutional investors around the world across a broad range of asset classes, including public fixed income, private fixed income, fundamental equity, quantitative equity, real estate and alternatives. For more information about PGIM, visit pgim.com.
Prudential Financial, Inc. (PFI) of the United States is not affiliated in any manner with Prudential plc, incorporated in the United Kingdom, or with Prudential Assurance Company, a subsidiary of M&G plc, incorporated in the United Kingdom. For more information, please visit news.prudential.com.
1 The term PGIM as used in this announcement includes PGIM Investments LLC and PGIM DC Solutions LLC, both of which are affiliates of PGIM, Inc., an indirect, wholly owned subsidiary of Prudential Financial, Inc.
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Mutual Funds: Consider a fund’s investment objectives, risks, charges, and expenses carefully before investing. The prospectus and summary prospectus contain this and other information about the fund. Contact your financial professional or visit pgiminvestments.com for a prospectus and summary prospectus. Read them carefully before investing.
Past performance is not a guarantee or a reliable indicator of future results.
Investing involves risk. Some investments have more risk than others. The investment return and principal value will fluctuate, and investors’ shares, when sold, may be worth more or less than the original cost. Fixed income investments are subject to interest rate risk, and their value will decline as interest rates rise. Asset allocation and diversification do not assure a profit or protect against loss in declining markets. There is no guarantee a Fund’s objectives will be achieved. The risks associated with each fund are explained more fully in each fund’s respective prospectus. TIPS may experience greater losses than other fixed income securities with similar durations. Unique risks associated with real estate and commodities may cause these investments to react differently to market conditions than traditional investments. Commodities may be speculative and more volatile than investments in more traditional equity and debt securities.
The target date is the approximate year in which investors plan to retire. The funds are designed for investors who plan to gradually withdraw assets from the fund over a moderate time period following retirement. Each fund invests in underlying funds that provide exposure to fixed income, equity and nontraditional asset classes. The asset allocation of the target date funds will become more conservative as the target date approaches and for 10 years after the target date by lessening the equity exposure and increasing the exposure in fixed income investments. The principal value of an investment in a target date fund is not guaranteed at any time, including the target date. There is no guarantee that the fund will provide adequate income through retirement.
A target date fund should not be selected solely based on age or retirement date. Before investing, participants should carefully consider the fund’s investment objectives, risks, charges and expenses, as well as their age, anticipated retirement date, risk tolerance, other investments owned, and planned withdrawals.
The stated asset allocation may be subject to change. It is possible to lose money in a target date fund, including losses near and following retirement. These risks may be increased to the extent investors begin to make withdrawals from the fund significantly before the target date. Investments in the funds are not deposits or obligations of any bank and are not insured or guaranteed by any governmental agency or instrumentality. For investors close to or in retirement, the fund’s equity exposure may result in investment volatility that could reduce an investor’s available retirement assets when they are needed. For investors farther from retirement, there is a risk that a fund may invest too much in investments designed to ensure capital conservation and/or current income, which may prevent the investor from meeting his/her retirement goals.
© 2023 Prudential Financial, Inc. and its related entities. Prudential, the Rock symbol, PGIM, Prudential Day One, PGIM Investments, PGIM DC Solutions and the PGIM logo are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
Prudential Day One Funds may be offered as: (i) collective investment trust funds offered by Great Gray Trust Company LLC, and (ii) registered mutual funds offered through Prudential Investment Management Services LLC (PIMS), Newark, N.J., a Prudential Financial company. PGIM Investments is a registered investment adviser and investment manager to all PGIM U.S. open-end investment companies. PGIM Quantitative Solutions, LLC is a wholly owned subsidiary of PGIM, a Prudential Financial company. Great Gray Trust Company is not affiliated with PGIM, Prudential Financial, or their affiliates.
This material is being provided for informational or educational purposes only and does not take into account the investment objectives or financial situation of any client or prospective clients. The information is not intended as investment advice and is not a recommendation. Clients seeking information regarding their particular investment needs should contact their financial professional.
Investment products are not insured by the FDIC or any federal government agency, may lose value, and are not a deposit of or guaranteed by any bank or any bank affiliate.
CIT DISCLOSURE
Great Gray Trust Company, LLC Collective Investment Funds (“Great Gray Funds”) are bank collective investment funds; they are not mutual funds. Great Gray Trust Company, LLC serves as the Trustee of the Great Gray Funds and maintains ultimate fiduciary authority over the management of, and investments made in, the Great Gray Funds. PGIM Quantitative Solutions, LLC has been retained to manage the assets. Great Gray Funds and their units are exempt from registration under the Investment Company Act of 1940 and the Securities Act of 1933, respectively.
Investments in the Great Gray Funds are not bank deposits or obligations of and are not insured or guaranteed by Great Gray Trust Company, LLC, any bank, the FDIC, the Federal Reserve, or any other governmental agency. The Great Gray Funds are commingled investment vehicles, and as such, the values of the underlying investments will rise and fall according to market activity; it is possible to lose money by investing in the Great Gray Funds.
Participation in Collective Investment Trust Funds is limited primarily to qualified retirement plans and certain state or local government plans and is not available to IRAs, health and welfare plans and, in certain cases, Keogh (H.R. 10) plans. Collective Investment Trust Funds may be suitable investments for plan fiduciaries seeking to construct a well-diversified retirement savings program. Investors should consider the investment objectives, risks, charges, and expenses of any pooled investment fund carefully before investing. The Additional Fund Information and Principal Risk Definitions (PRD) contains this and other information about a Collective Investment Trust Fund and is available at greatgray.com/principalriskdefinitions; a copy can also be obtained free of charge by contacting Great Gray Trust Company, LLC at (866) 427-6885.
Great Gray and Great Gray Trust Company are service marks used in connection with various fiduciary and non-fiduciary services offered by Great Gray Trust Company, LLC.
© 2023 Great Gray Trust Company, LLC. All rights reserved.
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