AllianceBernstein, a global investment management firm with $477 billion in assets under management, has announced that it will launch a multi-manager target-date series, AllianceBernstein Multi-Manager Select Retirement Funds.
The fund will be co-managed with Morningstar Associates, a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The new series will invest in funds managed by leading investment managers in addition to AllianceBernstein, including AQR, Franklin Templeton, MFS and PIMCO.
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By providing independent selection of funds from highly regarded investment managers in one portfolio, the new multi-manager target-date series addresses issues that the U.S. Department of Labor (DOL) has identified in its "Tips for ERISA Plan Fiduciaries," noting that non-proprietary target-date funds could offer advantages to plan participants by diversifying their exposure to investment providers.
"The landscape for target-date portfolio design and construction has evolved over the past decade and we’ve spent that time building defined contribution products of the future at AllianceBernstein," said Daniel Loewy, Chief Investment Officer and Co-Head of AllianceBernstein’s Multi-Asset Solutions team. "Today, we have access to new asset classes and tools to solve some of the challenges presented by the traditional target-date approach. With this fund series, we can provide investors with access to funds from high-quality managers through Morningstar Associates’ independent investment selection process, and deliver a better target-date design to plan sponsors and participants by working with our industry peers."
The new series will also incorporate a broad range of asset classes, including those that seek to provide diversification to stocks and bonds, with the aim of delivering more consistent results and mitigating short-term risk. AllianceBernstein will design and manage the glide path, adjusting asset-class exposures as market conditions change, and provide overall program oversight. Morningstar will select funds from the broad offerings of each participating firm.
"Very few firms have good funds in every category," said Scott Wentsel, Chief Investment Officer, Americas, Morningstar Investment Management group. "Being able to select funds from a number of high-quality asset managers expands the opportunity set and increases our potential to improve investor outcomes."
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By GlobalData"With the DOL now suggesting that plan sponsors consider non-proprietary and custom solutions, funds accessing multiple investment managers may address concerns of plan sponsors and may provide plan participants with a greater likelihood of better outcomes," added Richard Davies, Head of Defined Contribution and Co-Head of North America Institutional at AllianceBernstein. "We already manage more than $21 billion in custom target-date portfolios for large defined contribution plans and we will continue to design offerings for plans of all sizes that assist sponsors and their advisors with their evolving needs."
The funds are expected to be available for purchase by early November 2014.
