The Secret Ingredient in BlackRock’s Imitation Pension Fund
Asset managers are upping their REITs llocations in defined contribution funds, as the industry works to improve returns and reduce volatility.
Asset managers are working to make target-date funds — the go-to defined contribution vehicle — look more like what preceded them: defined benefit plans. DB plans have historically delivered higher investment returns with less volatility than their pay-as-you-go counterparts, in part due to a broader investable universe.
A number of multi-asset firms have looked to one product to help bridge the DC-DB divide: real estate investment trusts, or REITs.
Target-date funds are big and growing business for money managers. As they continue to attract investors, firms’ standalone offerings — primarily actively managed funds — are languishing.
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