Managers Eye Target Date Funds for Impact

Two asset management companies are looking to expand the target-date fund (TDF) universe with new ranges.

Fidelity Investments has filed paperwork with the Securities and Exchange Commission (SEC) for a 13-strong range of funds called the Fidelity Sustainable Target Date series.

For each TDF, the portfolio will consist of predominantly Fidelity funds and, according to the prospectus, will have at least 80% allocated to securities that Fidelity has deemed to have “proven or improving sustainability practices or positive environmental, social and governance characteristics”.

The prospectus indicates that the fund range will go live on April 26, subject to regulatory approval.

Separately, Putnam Investments has launched an ESG-tilted range of TDFs.

The company has readied a 10-strong range of funds to sit alongside its established Putnam Retirement Advantage TDF suite. The new funds are managed by the same team and will invest predominantly in Putnam’s own exchange-traded funds.

Steven McKay, Putnam’s head of global defined contribution investment only, said: “There is growing interest in sustainable investing within the defined contribution realm, and we are excited to deliver this innovative approach to target-date investing to the retirement savings marketplace.”

The launches come as the Department of Labor’s ESG investment rule for retirement funds has come into effect, specifically allowing plans to include ESG considerations in their offerings. It follows years of conflicting messages from different regulators and politicians under first the Trump administration and latterly President Biden.

Meanwhile, BNY Mellon has filed paperwork with the SEC for a Women’s Empowerment ETF, to be managed by its subsidiary Newton Investment Management.

According to the fund’s initial prospectus, the ETF will focus on companies that “demonstrate attractive financial attributes and contribute to the empowerment of women”.