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Wednesday, August 08, 2007

Northern Trust Joins Target-Date Bandwagon

News summary by MFWire's editors

Northern Trust Global Investments has launched target date collective funds geared towards defined contribution plans. NTGI offers the funds in five-year increments with retirement dates ranging from 2010 through 2050. The funds follow a "glide path," running from aggressive to conservative over a person's lifetime.

Northern Trust announced today that it has introduced target date collective funds for defined contribution retirement plans. The funds, managed by Northern Trust Global Investments (NTGI), are designed to systematically adapt portfolio allocations over a period of time with strategies that roll down a "glidepath" from aggressive to conservative investments, aligning appropriate risk levels with the participant's target retirement date.

NTGI offers the funds in five-year increments with retirement dates beginning in 2010 through 2050. The funds are globally diversified and incorporate inflationary hedge asset classes such as global real estate and commodities, in addition to a core allocation to stocks and bonds.

"We've leveraged Northern Trust's proven strengths in asset allocation and index and enhanced investment management by designing this suite of products for defined contribution plans," said Susan Czochara, senior product manager for NTGI. "A set of strategic global capital market assumptions reviewed annually by Northern Trust's Investment Policy Committee (IPC) serves as the framework for these funds. The funds are constructed utilizing a collective fund of funds structure that capitalizes on $54 billion in assets already invested in the underlying individual component strategies. We offer two approaches to the funds, a blended index or a blended enhanced strategy, which provide diversified exposure in a risk- and cost-efficient manner."

"Target date funds offer a complete solution for defined contribution plan sponsors and their participants," said John Krieg, Director of product management for NTGI. "In addition, the U.S. Pension Protection Act of 2006 included target date funds on a short list of qualified default investment alternatives (QDIA), creating a significant opportunity for continued growth."

Northern Trust's IPC is responsible for creating and approving investment policy, including asset allocation and exposure decisions for all personal assets managed by Northern Trust. This committee is comprised of various asset class experts that develop a series of forward looking capital market assumptions.

About Northern Trust

Northern Trust Global Investments (NTGI) is the multi-asset class investment management business of Northern Trust Corporation. NTGI comprises Northern Trust Investments, N.A., Northern Trust Global Investments Limited, Northern Trust Global Investments Japan, K.K., the investment advisor division of The Northern Trust Company and Northern Trust Global Advisors and its subsidiaries.

Northern Trust Corporation (NASDAQ:NTRS) is a leading provider of investment management, asset and fund administration, fiduciary and banking solutions for corporations, institutions and affluent individuals worldwide. Northern Trust, a multibank holding company based in Chicago, has a growing network of 85 offices in 18 U.S. states and has international offices in 13 locations in North America, Europe and the Asia-Pacific region. As of June 30, 2007, Northern Trust had assets under custody of $4.0 trillion, and assets under investment management of $766.5 billion. Northern Trust, founded in 1889, has earned distinction as an industry leader in combining high-touch service and expertise with innovative products and technology. For more information, visit http://www.northerntrust.com/.  

Edited by: Erin Kello

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