T. Rowe Price To Lower Expenses Across Target Date Lineup And Expand Offering With New Blend Fund Series
T. Rowe Price Group (NASDAQ: TROW) announced a reduction in expenses for its target date mutual funds and trusts, effective July 1, 2021. The company has filed with the SEC to launch a new Retirement Blend Fund series, combining active and passive strategies. The average fee reduction across mutual funds is 6.3 basis points, enhancing investor value. This initiative aims to broaden the firm's target date solutions, positioning T. Rowe Price as a leader in retirement investing.
- Average fee reduction of 6.3 basis points on mutual funds enhances investor value.
- Launch of Retirement Blend Fund series offers active and passive investment options.
- Positioning as a leading manager in active target date products with $327.3 billion in assets.
- None.
BALTIMORE, May 24, 2021 /PRNewswire/ --
NEWS
T. Rowe Price Group, Inc. (NASDAQ-GS: TROW), a market leader in retirement and target date investing and the only target date manager with a "High" rating on Morningstar's predictive pillars of People, Process, and Parenti, announced that it will reduce expenses across its suite of target date mutual funds and trusts. T. Rowe Price also filed a new series of target date funds for registration with the Securities and Exchange Commission (SEC) today and has launched a marketing campaign, centered on the theme "Retirement. Meet Your Match," to promote how the breadth of the firm's target date solutions can help investors meet their unique retirement goals.
Fee reductions on all T. Rowe Price's target date portfolios will take effect on July 1, 2021. The new Retirement Blend Fund series is expected to be available publicly on or about July 28, 2021 and will offer Investor Class and I Class shares across all vintages, from 2005-2065.
QUOTES
Wyatt Lee, portfolio manager and head of Target Date Strategies, Multi-Asset
"We understand everyone's path to retirement is different, and we look forward to delivering greater choice and value to the target date marketplace through these lower fees and the new Retirement Blend Funds. As long-established leaders in retirement and target date investing, we have tremendous conviction in our approach to managing target date assets and we are pleased to extend our offering to a wider base of retirement investors, plan sponsors, and advisors."
Sébastien Page, global head of Multi-Asset
"Target date strategies are the core of many investors' retirement portfolios today because of their simplicity, efficiency, and value. T. Rowe Price has always focused on delivering investment excellence to our clients and the changes we're announcing today will add more choice and improved pricing to what we believe is already a robust selection of target date and multi-asset portfolios."
Robert Higginbotham, head of Global Distribution
"The retirement savings gap worldwide remains a challenge, compounded by uncertainties in the financial markets and the diverse range of needs and preferences among retirement investors, plan sponsors, and advisors. We're pleased to help our clients pursue their retirement outcomes by expanding our target date lineup further and offering it at an even greater value."
DETAILS
Fee Reductions
T. Rowe Price filed prospectus supplements with the SEC today to lower fees on its existing target date portfolios. The expense reductions vary depending on the specific product type and vintage. Overall, the resulting asset-weighted average fee reduction, based upon assets under management as of March 31, 2021, is 6.3 basis points across mutual funds and 4.8 basis points across trusts. Specific fee changes vary across products. (A basis point is equal to one hundredth of one percent.)
The expense reductions announced today follow the firm's establishment last April of a new unitary fee structure for all target date mutual funds, in which an all-inclusive management fee rate was set at the top level. As part of that restructuring, fees were reduced across the Retirement I Funds – I Class, Target Funds, and Retirement Income 2020 Fund.
The unitary fee structure for the target date mutual funds will remain in place and will reflect the updated fees beginning July 1, 2021. This top-down fee structure has enabled the firm to lower target date mutual fund fees without making underlying fund or allocation changes.
The overall investment approach and benchmarks for the Retirement and Target series remain unchanged.
Retirement Blend Funds
The new Retirement Blend Fund series expands T. Rowe Price's target date lineup, allowing the firm to deliver value to clients while further broadening the range of solutions to help them achieve their retirement goals.
The Retirement Blend Funds will combine active and passive styles in selecting underlying investments. The Retirement Blend strategy has been in place at T. Rowe Price since 2018 but was previously only available in the collective investment trust (CIT) format. This mutual fund series will extend the Retirement Blend approach to a wider range of investors for whom a mutual fund is the preferred or most appropriate investment vehicle.
The Retirement Blend series will offer the value of active management, allowing the opportunity for excess return and greater diversification in market sectors where a fully passive management approach may not be appropriate, while also providing the market exposure and reduced costs common to a passive investment approach.
The Retirement Blend Funds will utilize the enhanced Retirement glide path and the same diversification, and tactical asset allocation as the Retirement suite. T. Rowe Price recently announced that its target date portfolios are undergoing a gradual transition to their enhanced glide paths; this transition began in April 2020 and is expected to take approximately two years to complete for all funds and trusts. Neither the Retirement Blend Funds launch nor the fee changes affect this transition process.
All of T. Rowe Price's target date portfolios will continue to be managed by the same accomplished portfolio management team: Wyatt Lee, CFA, head of Target Date Strategies, and portfolio managers Kimberly DeDominicis and Andrew Jacobs van Merlen, CFA.
Registration Statements for the T. Rowe Price Retirement Blend 2005-2065 Funds have been filed with the Securities and Exchange Commission but are not yet effective. The information in the prospectuses is not complete and may be changed. We may not sell these funds until their registration statements are effective with the Securities and Exchange Commission. This is not an offer to sell these funds and is not soliciting an offer to buy these funds in any state where the offer or sale is not permitted.
ABOUT T. ROWE PRICE'S TARGET DATE FRANCHISE AND MULTI-ASSET DIVISION
T. Rowe Price established its first target date portfolios in 2002 and the firm has been an industry leader since that time. The firm's target date portfolios are advised by its Multi-Asset Division, which managed
The firm's target date lineup includes two distinct suites with differing glide paths, offered as both mutual funds and collective investment trusts: the Retirement glide path is designed to support the need for lifetime income; the Target glide path is designed manage growth and volatility around retirement.
T. Rowe Price's target date portfolios seek to provide investors with an age-appropriate, diversified portfolio that can carry an investor to and through retirement. One hundred percent (
FAQ
What changes did T. Rowe Price announce for target date funds on May 24, 2021?
When will T. Rowe Price's fee reductions take effect?
What is the average fee reduction announced by T. Rowe Price for its target date mutual funds?
What is the purpose of the new Retirement Blend Fund series from T. Rowe Price?
