Seeking Alpha

Fidelity boosts stock exposure in target-date funds

  • Seeing weaker returns for fixed income going forward following a 30-year bull market, Fidelity is boosting equity exposure in its target-date retirement funds. For investors under the age of 67, allocations to equities will rise as much as 1500 basis points.
  • The move to a more aggressive stance brings Fidelity more inline with that of 401(k) plan competitors like Vanguard and T. Rowe Price (together the three control about 75% of industry assets).
  • Fidelity's changed mix will have a 90% allocation to stocks until workers reach 48 vs. 75% now. By the time they reach age 84, about 75% will be in fixed income and cash.
  • Relevant ETFs: AGG, BND, LAG, SCHZ, BOND, SAGG, MINCIYY, VTI, EXT, TOTS, EUSA, ITOT.
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