John Hancock launching 'to retirement' series of target-date funds

John Hancock Funds LLC has filed papers with the Securities and Exchange Commission to launch a new suite of target date funds that are specifically designed for investors up until the point they retire, a company official said today. The new series is designed to complement the company’s existing offerings, which are structured to manage investors’ money “through retirement,” defined as 25 years past the date of retirement. Hancock was one of a number of target date fund managers to get slammed over the performance of its 2010 funds during the market crash of 2008, when many of those portfolios dropped 25% or more. The market crash sparked a running debate within the industry about whether target date funds should be managed “to retirement” or “through retirement.” Rather than just tweak the way its target date funds were managed, Hancock has decided to offer two suites of target date funds to provide investors with a choice, said the official, who declined to be identified. The new funds will be more passively managed than the existing offerings and will have slightly lower expenses, according to the Feb. 12 filing. Creating a new series of target date funds that are designed to take investors “to” retirement by shifting to a very conservative position at the retirement makes sense, said Tim Wood, an independent fiduciary with Deschutes Investment Advisors. Most investors assumed that’s what they were buying in the first place, he said. The problem is that “most people may not understand what retirement is.”