TIAA-CREF Increases Equity Exposure for Target Date Funds

April 26, 2007 ( - TIAA-CREF is adjusting the asset allocations in each of its seven target date funds by increasing the amount of investors' retirement assets exposed to equities.

According to a press release from the company, the firm is increasing equity allocations from 80% to 90% for the first target date fund and extending the retirement date. TIAA-CREF will be increasing exposure to equities at the time of retirement from 35% to 50% and will then decrease exposure to 40% when participants are ten years beyond the retirement date.

TIAA-CREF offers Lifecycle Funds with target dates in five-year increments between 2010 and 2040, and adjustments to the asset allocations will be effective immediately.

“Our plan participants have told us that they are continually looking to maximize the performance of their retirement investments to meet their long- term savings goals while seeking to minimize downside market risk,” said Padelford Lattimer, Senior Managing Director, Product Management, TIAA-CREF, in the press release.

Other recent changes to TIAA-CREF’s series of lifecycle funds include increasing exposure to international equities, adding high-yield bond exposure, introducing inflation-linked and short-term bond exposure 10 to 15 years prior to the target retirement date and reducing exposure to Real Estate Investment Trusts (REITs).

The firm said in the press release that these changes were the result of internal and external research that showed that to ensure the optimal weighting, or the best return without undue risk, a higher exposure to equities and higher-returning fixed- income is advantageous.

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