The firm says the move is meant to position the portfolio suite for use in the growing target-date market. John Hancock Retirement Living Portfolios combine up to 50 investment strategies from 20 specialized managers. Active asset-allocation decisions are made by the global asset-allocation team at John Hancock Asset Management.
The Retirement Living Suite comprises 10 portfolios with target retirement dates spanning from 2010 to 2055. The firm cut expenses by 20 to 26 basis points across the entire suite. John Hancock says it has seen rapid growth in interest for competitively priced target-date funds (TDFs) and related portfolio solutions after the Pension Protection Act of 2006 paved the way for plan sponsors to add age-based portfolios as default investment options in plans with automatic enrollment.
John Hancock cites research from Cerulli Associates showing target-date funds are on track to receive 63% of all 401(k) contributions and could make up 35% of all 401(k) assets by 2018. The firm also reminds retirement plan sponsors and other fiduciaries of the Department of Labor guidance, issued in 2013, on choosing among target-date strategies. The guidance specifically mentions the importance of reviewing TDF fees and asset class diversification.
Andrew G. Arnott, president and CEO of John Hancock Investments, says the Retirement Living Portfolios strive to deliver the investing style of large pension plans and endowments for individual retirement plan participants. The goal is better diversification across securities, asset classes, investment styles, and managers, he adds.