NEWARK, N.J.--(EON: Enhanced Online News)--Prudential Investments has launched the Prudential Day One Mutual Funds, 12 target date funds that will be available through group retirement plans and financial intermediaries. Prudential Investments is the retail distribution business of PGIM, the global investment management businesses of Prudential Financial, Inc. (NYSE:PRU).
“Target funds have become the vehicle of choice within defined contribution plans, but not all target date funds are created equal”
“Choosing the right target date fund may be one of a fiduciary’s most important decisions,” says Stuart Parker, president of Prudential Investments. "The Day One Mutual Funds are a solution to consider with a glidepath constructed to mitigate risk at each stage of retirement with a competitive expense ratio.”
Prudential’s suite of Day One Target Date Funds is already offered through collective investment trusts and separate accounts and surpassed $1 billion in assets, after growing nearly 40 percent since Dec. 31, 2014.
Designed to solve for the right risks at the right time, Day One Mutual Funds offer a glidepath that uniquely addresses the risks faced by participants in three stages of retirement planning:
Accumulation: Higher equity exposure to mitigate the biggest risk that younger participants face—failing to save enough money toward retirement.
Preservation: Lower equity exposure to mitigate the biggest risk faced by participants who are near retirement—the risk of significant market losses.
Inflation Protection: Focus on assets that help fight inflation to mitigate the biggest risk faced by retired participants—the erosion of purchasing power for more than 30 years in retirement.
In addition, the suite’s hybrid investment approach, which combines active and passively managed strategies, helps to reduce overall costs while adding value in areas that provide the best potential to generate alpha. The Day One Mutual Funds are being offered at an expense ratio of 0.40 percent (in the lowest priced share class, R6i), ranking it among the lowest in cost (Top 13 percent) for open-ended funds within the Morningstar Target Date Funds Institutional Share Class.ii Prudential Investments will also offer Day One Mutual Funds to plan sponsors in collaboration with Prudential’s Retirement business.
“Target funds have become the vehicle of choice within defined contribution plans, but not all target date funds are created equal,” said Jamie Kalamarides, head of Full Service Solutions at Prudential Retirement. “Our approach to the Day One Target Date Funds incorporates nearly a century of experience in fulfilling pension obligations and helping plan participants reach their desired retirement outcome.”
The new Day One suite features 12 target date mutual funds and is available in five-year increments, ranging from 2010 to 2060, in addition to an income fund. Additional information on Day One Mutual Funds can be found at DayOneFunds.com.
PRUDENTIAL DAY ONE MUTUAL FUNDS
|Fund Name||Ticker*||CUSIP*||Net Total Expenses*|
|Prudential Day One Income Fund||PDAJX||74445D604||0.40%|
|Prudential Day One 2010 Fund||PDBJX||74445D851||0.40%|
|Prudential Day One 2015 Fund||PDCJX||74445D786||0.40%|
|Prudential Day One 2020 Fund||PDDJX||74445D729||0.40%|
|Prudential Day One 2025 Fund||PDEJX||74445D653||0.40%|
|Prudential Day One 2030 Fund||PDFJX||74445D588||0.40%|
|Prudential Day One 2035 Fund||PDGJX||74445D521||0.40%|
|Prudential Day One 2040 Fund||PDHJX||74445D455||0.40%|
|Prudential Day One 2045 Fund||PDIJX||74445D380||0.40%|
|Prudential Day One 2050 Fund||PDJJX||74445D323||0.40%|
|Prudential Day One 2055 Fund||PDKJX||74445D257||0.40%|
|Prudential Day One 2060 Fund||PDLJX||74445D182||0.40%|
*Tickers, CUSIPs and net total expenses shown in the table above represent the R6 share class only. The Prudential Day One Mutual Funds are also available in the R1-R5 share classes.
The funds benefit from Prudential’s expertise as:
- The ninth largest global asset manager with more than $1 trillion in assets under management, as of Dec. 31, 2015.iii
- A top 10 retirement recordkeeper servicing more than 7,800 defined benefit and defined contribution plans and four million participants.iv
- The No. 1 manager of pension risk transfer assets, as of Dec. 31, 2015.v
- Among the fastest growing mutual fund families according to Simfund, based on growth since 2008, as of Sept. 30, 2016.
About PGIM and Prudential Financial, Inc.
With 13 consecutive years of positive third-party institutional net flows, PGIM, the global asset management businesses of Prudential Financial, Inc. (NYSE: PRU), ranks among the top 10 largest asset managers in the world with more than $1 trillion in assets under management as of Sept. 30, 2016. PGIM’s businesses offer a range of investment solutions for retail and institutional investors around the world across a broad range of asset classes, including fundamental equity, quantitative equity, public fixed income, private fixed income, real estate and commercial mortgages. Its businesses have offices in 16 countries across five continents.
Prudential’s other businesses also offer a variety of products and services, including life insurance, annuities and retirement-related services. For more information about PGIM, please visit https://www.pgim.com. For more information about Prudential, please visit www.news.prudential.com.
The Funds are exposed to the same types of risks as the underlying funds in which they invest. These primary risks include small- and mid-cap stocks, which may be subject to more erratic market movements than large-cap stocks; high yield (“junk”) bonds, which are subject to greater credit and market risks; and foreign securities, which are subject to currency fluctuation and political uncertainty. Fixed income investments are subject to interest rate risk, and their value will decline as interest rates rise. Diversification does not assure a profit or protect against loss in declining markets. These risks may increase the Fund’s share price volatility. There is no guarantee the Fund’s objective will be achieved. The risks associated with each fund are explained more fully in each fund’s respective prospectus.
The target date is the approximate date when investors plan to retire and may begin withdrawing their money. The asset allocation of the target date funds will become more conservative as the target date approaches and for ten years after the target date by lessening the equity exposure and increasing the exposure in fixed income investments. The principal value of an investment in a target date fund is not guaranteed at any time, including the target date. There is no guarantee that the fund will provide adequate retirement income. A target date fund should not be selected based solely on age or retirement date. Participants should carefully consider the investment objectives, risks, charges and expenses of any Fund before investing. Funds are not guaranteed investments and the stated asset allocation may be subject to change. It is possible to lose money by investing in securities, including losses near and following retirement.
Mutual funds are not insured by the FDIC or any federal government agency, may lose value, and are not a deposit of or guaranteed by any bank or any bank affiliate.
Consider a fund’s investment objectives, risks, charges, and expenses carefully before investing. The prospectus and summary prospectus contain this and other information about the fund. Contact your financial professional for a prospectus and summary prospectus. Read them carefully before investing.
Mutual funds are distributed by Prudential Investment Management Services LLC, a Prudential Financial company and member SIPC. Jennison Associates and PGIM are registered investment advisors and Prudential Financial companies. QMA is the primary business name of Quantitative Management Associates LLC, a wholly owned subsidiary of PGIM. Prudential Fixed Income and PGIM Real Estate are units of PGIM. © 2016 Prudential Financial, Inc. and its related entities. Jennison Associates, Jennison, PGIM Real Estate, the Prudential logo, and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.
i R6 shareclass is for institutional investors only.
ii Peer group is comprised of all open-ended Morningstar Target Date Funds Institutional Share Class.
iii Prudential Financial was named 9th largest institutional asset manager worldwide, Pensions & Investments: Largest Money Manager’s list, May 2016, data as of 12/31/2015.
iv Plan Sponsor 2016 DC Record-keeping Survey, June 2016, data as of 12/31/2015.
v Plan Sponsor 2016 DC Record-keeping Survey, June 2016, data as of 12/31/2015.