Vanguard to launch Target Retirement Growth Trusts with higher equity allocations

Vanguard announced on 21 October that it will launch Target Retirement Growth Trusts, a target-date collective investment trust series that holds a larger equity allocation than its existing Target Retirement lineup. The series is built on the same foundation as the firm's Target Retirement Funds and Trusts, according to 401(k) Specialist.

The equity weight remains higher throughout the saving years, which means participants would reach retirement holding more stock than under the existing lineup; the report says the approach may also bring additional equity risk. The investment mix still adjusts automatically as participants near retirement, and the report says the series could suit employers whose workforce would welcome a more growth-oriented savings path.

"The Growth Trusts provide plan sponsors with another option within Vanguard's target-date lineup, built on the same disciplined, research-driven approach that has guided our Target Retirement series since its inception," Lauren Valente, managing director at Vanguard Workplace Solutions, said in the announcement.

Vanguard says the series is for plans where participant needs, retirement objectives or risk tolerance point toward more equity, and that its research, tools and consultation are available to employers weighing which series fits.

Research cited in the report put combined mutual fund and collective investment trust target-date assets at more than $5.3 trillion, up 11%, a pace the report describes as a record.