AllianceBernstein Plans Multi-Manager TDFs

A new target-date fund series will be co-managed by Morningstar Associates and AllianceBernstein, and boasts a diverse cast of managers, including Franklin Templeton and PIMCO.

The AllianceBernstein Multi-Manager Select Retirement Funds offer access to high-quality managers, based off assessments delivered through Morningstar Associates’ independent investment selection process. The goal is to deliver a better target-date design to plan sponsors and participants by working with industry peers, AllianceBernstein says.

The new multi-manager target-date funds address issues that the Department of Labor (DOL) identified in its “Tips for ERISA Plan Fiduciaries,” noting that non-proprietary target-date funds could offer advantages to plan participants by diversifying their exposures among different investment providers.

The series will incorporate a 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 will also provide overall program oversight. Morningstar will select funds from the broad offerings of each participating firm.

Over the past decade, the landscape for target-date portfolio design and construction has evolved, says Daniel Loewy, chief investment officer and co-head of AllianceBernstein’s multi-asset solutions unit. “We’ve spent that time building defined contribution products of the future at AllianceBernstein,” he says. “Today, we have access to new asset classes and tools to solve some of the challenges presented by the traditional target-date approach.”

The series will invest in funds managed by investment managers at AQR, Franklin Templeton, MFS and PIMCO. The funds are expected to be available for purchase by early November 2014.

AllianceBernstein LP is a global investment management firm with $477 billion in assets under management. Morningstar Associates LLC is a registered investment adviser (RIA) and wholly owned subsidiary of Morningstar Inc.