Columbia Threadneedle Investments today announced the launch of
an innovative new target date solution for the retirement
marketplace, the Columbia Adaptive Retirement Series. Based on the
firm’s proprietary Adaptive Risk Allocation methodology, the
solution aims to provide investors with capital appreciation and
current income consistent with the target retirement year while
seeking to smooth the ride through volatile markets.
In developing this new retirement solution, Columbia
Threadneedle has employed its award-winning1 investment approach
that allocates risk rather than capital in multi-asset portfolios
to provide stronger diversification benefits than a traditional
target date portfolio. Jeff Knight, Columbia Threadneedle’s global
head of investment solutions and lead portfolio manager for the
series, is a proven innovator in multi-asset investing, and
developed the Adaptive Risk Allocation methodology in an effort to
improve asset class diversification and consistency of returns.
Risk allocation seeks to distribute risk across four major asset
classes: global equity, global inflation-hedging assets, global
interest rates and global spread assets. Columbia Threadneedle
incorporates it in several investment solutions, most notably the
Columbia Adaptive Risk Allocation Fund, Knight’s flagship product
with $2.4 billion in AUM.2 The methodology employs a rules-based
market state classification designed to identify exceptions to
normal market conditions and offers the ability to reallocate risk
systematically and meaningfully as market conditions change.
Aligning portfolio allocations with the current market environment
provides investors with a potentially superior risk-return
profile.
The Adaptive Retirement Series currently consists of five target
date funds, spanning the 2020, 2030, 2040, 2050 and 2060 vintages;
five-year vintage funds may be added at a later date. The funds
seek exposure to a global portfolio of stocks, bonds and
inflation-hedging assets (commodities, TIPS and REITs). The target
date funds offer competitive pricing, with a net expense cap of
0.50% for zero-revenue sharing Institutional 3 Class shares and
0.68% for Advisor Class shares through July 31, 2019.3 The Adaptive
Retirement Series is available initially in a mutual fund and may
also be available subsequently in a Collective Investment
Trust.
“We believe that a risk-allocated investment offers a
potentially superior risk-return profile relative to a capital-
allocated investment,” said Jeff Knight, global head of investment
solutions and senior portfolio manager at Columbia Threadneedle
Investments. “We have designed a systematic process that determines
when and how the investment will respond to changing market
conditions.”
The Adaptive Retirement Series also offers a unique approach to
the lifecycle concept of asset allocation. Target date strategies
typically offer a glidepath that automatically reallocates assets
to a more conservative profile as the target retirement date
approaches. Conventional target date strategies reduce the
allocation to equities over time. This approach can lead to
inferior diversification at both ends of the glidepath, with high
concentration to equity risk at one end and high exposure to
interest rate risk at the other. The Columbia Threadneedle solution
maintains a diversified risk allocation throughout the lifecycle,
reducing aggressiveness along the glidepath without sacrificing
asset class diversification.
“We are pleased to bring this innovative investment approach to
the retirement marketplace,” said Dan Steele, national sales
manager, DCIO at Columbia Threadneedle Investments. “We believe
that although target dates and other one-decision funds have
provided enormous benefits for defined-contribution participants,
the type of innovation that Columbia Threadneedle can provide with
our multi-asset solutions may lead to better outcomes for
defined-contribution plan participants.”
About Columbia Threadneedle Investments:Columbia
Threadneedle Investments is a leading global asset manager that
provides a broad range of investment strategies and solutions for
individual, institutional and corporate clients around the world.
With more than 2,000 people, including over 450 investment
professionals based in North America, Europe and Asia, we manage
$484 billion of assets4 across developed and emerging market
equities, fixed income, asset allocation solutions and
alternatives.
Columbia Threadneedle Investments is the global asset management
group of Ameriprise Financial, Inc. (NYSE: AMP).
For more information, please visit
https://www.columbiathreadneedleus.com/.
1 Chief Investment Officer, Industry Innovation Award, December
20142 As of September 30, 20173 The fund’s expense ratio is from
the most recent prospectus. The investment manager and certain of
its affiliates have contractually (for at least twelve months after
the date of the fund prospectus) agreed to waive certain fees
and/or to reimburse certain expenses of the fund.4 As of September
30, 2017
Columbia Threadneedle Investments (Columbia Threadneedle) is the
global brand name of the Columbia and Threadneedle Group of
Companies.
Investors should consider the fund’s investment objectives,
risk factors and charges and expenses before investing. This and
other information can be found in the fund’s prospectus, which may
be obtained by visiting the fund’s website
www.columbiathreadneedleus.com to view or download a
prospectus. Read the prospectus carefully before investing.
Investing involves risk, including possible loss of
principal.
Although Columbia Threadneedle expects that most investors in
the Adaptive Retirement Series plan to retire on or about the year
in the fund’s name and that many investors will cease making new
investments in the fund and begin withdrawing assets on or about
that year, there is no guarantee that the investors’ retirement
goals will be met. Fund value will fluctuate up to and after the
fund’s target date. When selecting a target date fund, investors
should consider relevant factors in addition to age and expected
retirement year, including risk tolerance and specific investment
goals.
Diversification does not assure a profit or protect against a
loss.
Principal value of the fund is not guaranteed at any time,
including at the target date.
Market risk may affect a single issuer, sector of the economy,
industry or the market as a whole. The principal value of the fund
is not guaranteed at any time, including the target date. The
fund's investment in other funds subjects it to the investment
performance (positive or negative), risks and expenses of these
underlying funds. Investing in derivatives is a specialized
activity that involves special risks that subject the fund to
significant loss potential, including when used as leverage, and
may result in greater fluctuation in fund value. Commodity
investments may be affected by the overall market and industry- and
commodity-specific factors, and may be more volatile and less
liquid than other investments. Short positions (where the
underlying asset is not owned) can create unlimited risk.
International investing involves certain risks and volatility due
to potential political, economic or currency instabilities and
different financial and accounting standards. Risks are enhanced
for emerging market issuers. Investments in small- and mid-cap
companies involve risks and volatility greater than investments in
larger, more established companies. Fixed-income securities present
issuer default risk. Non-investment-grade (high-yield or junk)
securities present greater price volatility and more risk to
principal and income than higher-rated securities. A rise in
interest rates may result in a price decline of fixed-income
instruments held by the fund, negatively impacting its performance
and NAV. Falling rates may result in the fund investing in
lower-yielding debt instruments, lowering the fund's income and
yield. These risks may be heightened for longer maturity and
duration securities. As a non-diversified fund, fewer investments
could have a greater effect on performance. Market or other (e.g.,
interest rate) environments may adversely affect the liquidity of
fund investments, negatively impacting their price. Generally, the
less liquid the market at the time the fund sells a holding, the
greater the risk of loss or decline of value to the fund. The
fund's use of leverage allows for investment exposure in excess of
net assets, thereby magnifying volatility of returns and risk of
loss.
Columbia Management Investment Distributors, Inc., member
FINRA
AdTrax 1931592
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version on businesswire.com: http://www.businesswire.com/news/home/20171025005914/en/
Columbia Threadneedle InvestmentsCarlos Melville,
617-897-9384carlos.melville@ampf.com
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