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2012 Lipper Awards: Target fund manager expects growth

Friday, March 09, 2012 - 07:08

Mar. 9 - Jerome Clark, manager of the award-winning T. Rowe Price Retirement 2020 target fund, is positioned for economic growth and has increased allocations to emerging market stocks and high-yield bonds.

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Equity target funds took in 63 billion dollars of new money last year. Far outpacing other equity funds I'm joined now by the 2012. Lipper award winner Jerome Clark who manages. Hero prices retirement 20/20 fund to -- welcome good you. The jury much now over the past three years you about -- returns on the -- mixed asset target index handily. You look for in your investments. Life senators three different things that are really contribute to our outperformance -- was that we can have a heart equity allocation and then. Other target -- providers and and in the market. And me of when you look at the market returns over this three year appeared where equities at 14%. Parsley 1414%. -- bonds doing six and a half percent. That really help the performance of the funds. But the biggest contributors that we had internally was active management. When you look at the glide path to the equity component that help but then when you look at our White House and what help that app performance there. It was really our equity managers really really really repositioning their portfolios during the 2000 and -- to bear market. And having tremendous top performance in 20092010. That really helped. The performance of these funds the last thing that we have the -- fires that you don't see you all targeted products. Where we have -- a dedicated allocation emerging market bonds dedicated allocation high yield. Such things is that reverse ourselves a lot. So generally speaking what consideration should be taken into account and managing. A target but it's not like you're gearing several unique things would it be that diversification. Would it be reviewing your equity holdings on a more frequent basis. I would say it's all of those things are a lot of moving parts of the target -- product. We have an asset allocation committee meets on a monthly basis looking at. The allocations not only an asset classes where we -- position as far as equity vs fixed income. But also looking underneath the hood and looking at the different sectors do we want more international. During this upcoming period for the next twelve months or we want more domestic equities do we want high yield verses. Core fixed income soared to an all those kind of decisions and those decisions also helped contribute so we're looking at that we're adding active management so. Our underlying managers were counting on them to do a good job particularly over longer periods of time to help to enhance its hall. Enhance returns of this product which they have done. You've got. Eight years less than eight years now until this.

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2012 Lipper Awards: Target fund manager expects growth

Friday, March 09, 2012 - 07:08