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Rating:GSAM to Close Up Target-Date Mutual Funds Not Rated 0.0 Email Routing List Email & Route  Print Print
Thursday, July 05, 2012

GSAM to Close Up Target-Date Mutual Funds

Reported by Irene Park

Another mutual fund family is opting out of the target-date fund (TDF) game. Late last week, Goldman Sachs Asset Management [profile] became the latest firm to file plans that it will shut down its series of target-date mutual funds. [SEC filing]

The move comes on the heels of similar decisions by Columbia Funds and OppenheimerFunds (see coverage here and here).

In GSAM's case, it will be closing the Goldman Sachs Retirement Strategies Portfolios on July 27. The closing was first reported by 401kWire on Tuesday.

A Goldman Sachs spokesperson told MFWire in an emailed statement that "GSAM remains committed to the defined contribution investment-only business and currently manages over $53 billion in retirement assets" and that GSAM will continue to work with sponsors and their advisors with regard to custom target date funds."

She also pointed to GSAM's acquisition of Dwight Asset Management as "one clear sign of this commitment that builds on GSAM’s already strong fixed income capabilities." Dwight is a long-time player in the stable value market.

The family of six GSAM TDFs -- which are dated between 2010 and 2050 in ten-year increments save for the 2015 Portfolio -- had failed to gather significant assets and struggled with performance.

Data collected by Morningstar shows that the six large-blend funds hold just $53.8 million.

Morningstar's Target Date Survey from early May consistently rated the portfolios among the worst in the space, with significant net outflows and high volatility relative to their equity allocation. It comes as no surprise that all six carry just a one-star Morningstar rating.

Yet, GSAM may not be giving up on the retirement fight just yet. Last Thursday, it filed to launch the Goldman Sachs Retirement Portfolio Completion Fund. This fund promises investors access to "underrepresented" asset classes, including inflation-linked bonds, global REITs, and hedge fund industry beta.

The portfolios to be closed are PMed by Nicholas Chan, William Fallon and Steve Jeneste

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