What are target date funds?
Target date funds enable DC members to save into a single investment fund, based on their estimated retirement date. The assets in which they invest change over time, reflecting the stage members are at in their retirement journey.
Each target date fund has a range of target dates, so for example, a member born in 1985, who wanted to retire between the ages of 60 and 65 would be in the L&G Target Date Fund 2040-2045.
Reasons to invest
A flexible DC investment strategy designed with an aim to evolve with members’ changing needs
Professionally managed investment strategies where members’ needs are prioritised, using our unique insight into behaviours and markets.
Extended growth period and exposure to a diverse range of growth assets
Growth period takes the member up to 10 years before retirement, with a small exposure to private markets aimed at aiding diversification* and growth.
An emphasis on investing responsibly to make real world impact
We aim to invest members' money responsibly, in line with our purpose of creating a better future through responsible investing.**
What’s under the bonnet?
The asset allocation changes up to and through retirement years, focusing on growth in the early years, and de-risking gradually from 10 years before retirement and beyond.
Chart shows illustrative asset allocation for L&G TDF 2065-70 (Default). Asset allocation is subject to change. Chart shows numbers which may have been rounded and so some of the totals may not add up exactly to 100.
Source – L&G June 2024
How might the L&G Target Date Funds benefit DC scheme members?
Using unique insights to act in members’ best interests
We leverage our unique insights to evolve the funds so that we always aim to act in the best interests of clients. We call this ‘generational intelligence’.
100% of funds in the growth phase consider ESG factors [1]
Enables members to see a clear correlation between their investments and improving the future.
Access to a wider range of opportunities
Ranging from sustainable investments in high growth sectors to a small allocation to private markets.
1. Applies to L&G DC Workplace scheme members currently invested in the growth phase of all L&G Target Date Fund strategies. Subject to change. ESG integration and consideration through a variety of factors.
Investing responsibly for our members
We take into account financially material risks, including integrating environmental, social and governance (ESG) considerations into how investments are selected. We also aim to invest members' money responsibly. As part of this, we use the following approaches for various parts of the portfolio.
Engagement
We engage with companies, regulators, policymakers, industry peers and other stakeholders around the world to tackle systemic risks.
Exclusions
We prioritise engagement over divestment. Nevertheless, certain fund ranges and strategies will adopt exclusions reflecting globally accepted standards of business practice. This includes companies that have failed to make progress on our minimum expectations on climate change, under our Climate Impact Pledge.
Enhancements
We deploy tools including selection and ‘tilting’. 'Tilting' is our approach that allocates more capital to companies with higher ESG scores and less to companies with poor ESG scores, which we believe provides a compelling blend of impact, transparency, and market exposure.
L&G Lifetime Advantage Funds
Aiming to improve member outcomes by creating a better future for them and the world
Get in touch
Get in touch
If you would like any further information please complete the contact us form.
Key Risks
The value of any investment and any income taken from it is not guaranteed and can go down as well as up, and investors may get back less than the amount originally invested. *It should be noted that diversification is no guarantee against a loss in a declining market. Assumptions, opinions and estimates are provided for illustrative purposes only. There is no guarantee that any forecasts made will come to pass. The risks associated with each fund or investment strategy should be read and understood before making any investment decisions. Further information on the risks of investing is available from our Fund Centres.
** By 31 December 2024, we managed £424.6 billion in responsible investment strategies. As at 31 December 2024. AUM in responsible investment strategies represents only the AUM from funds or client mandates that feature a deliberate and positive expression of responsible investing characteristics, in the fund documentation for pooled fund structures or in a client’s Investment Management Agreement. This expression could be exclusions; ESG outcome focus; impact; or a combination of these.
While we have integrated Environmental, Social, and Governance (ESG) considerations into our investment decision-making and stewardship practices, this does not guarantee the achievement of responsible investing goals within funds that do not include specific ESG goals within our objectives.