A news release said the focus of the target-date portfolios is aimed at higher returns in the earlier years and protecting accumulated capital in the later years, while continuously minimizing risks including shortfall, poor market performance, drawdown, longevity, and inflation. SEI acts as a fiduciary when it comes to portfolio construction and manager selection, monitoring, and replacement, a release said.
The methodology in building the portfolios begins by considering the variables of returns, time, and contributions to determine the probability that participants will meet their retirement income needs. SEI then uses goals-based strategies similar to those used by defined benefit plan sponsors to build a diversified mix of risk and return sources for defined contribution plans.
“Many current target-date fund providers only use internal managers or products, and plan sponsors are correct in questioning if that truly offers the level of diversification and objectivity that is needed to meet retirement goals,” said Jim Morris, senior vice president, SEI’s Global Institutional Group, in the release.
More information is available at www.seic.com/institutions.