Investing Ideas

Defining and selecting strategic asset exposures for target date investors

An effective target date strategy helps investors navigate uncertainty through diversification that varies according to their changing needs and time horizons.

By: Bruno Crocco Andrew Dierdorf Finola McGuire Foley Brett Sumsion Sarah O’Toole

Updated: 2/20/2024

Key Takeaways

Strategic asset allocation is the primary driver of a target date fund’s performance over time, and every target date manager has a different view on which asset classes are strategic and how they should be combined to reach a retirement goal.
The strategic asset allocation process for Fidelity’s target date strategies emphasizes assets that earn a long-term return, display independent attributes in different market environments, and offer durable implementation characteristics.
Managing capital market uncertainty and trade-offs among different investment exposures is central to our investment process.
Our proprietary research provides insights into asset class performance and relationships among asset classes during distinct market regimes. When making strategic asset allocation decisions, we consider multiple paths forward and the potential effect on investors with different time horizons.

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Defining and selecting strategic asset exposures for target date investors

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