JP Morgan Asset Management has landed a subadvisory spot on MassMutual’s RetireSmart target date fund series.
The firm will begin subadvising MassMutual’s $2.4 billion target date series on September 24, according to a document filed with the Securities and Exchange Commission.
The series consists of 12 target date funds, in five year increments from 2010 to 2060, as well as the MassMutual RetireSmart In Retirement fund, all of which will be subadvised by JP Morgan.
In relation with the appointment, the name of the series is to change to MassMutual RetireSmart by JPMorgan.
Each fund in the series invests in a combination of MassMutual Select funds and MassMutual Premier Funds, Barings funds and JP Morgan funds, in addition to non-affiliated funds, according to the filing. The funds will invest roughly 15% to 30% of their assets in funds managed or subadvised by JP Morgan and its affiliates.
Tactical and strategic asset allocation will be overseen by Citywire + rated Anne Lester, head of retirement solutions at JP Morgan Asset Management, and Daniel Oldroyd, head of target date strategies at JP Morgan Asset Management.
Fund selection will continue to be overseen by Frederick Schulitz, investment director and portfolio manager at MassMutual.
Previously, Schulitz oversaw the range alongside Bruce Picard until June, when Picard left MassMutual to be model portfolio lead at Manulife, according to Picard’s LinkedIn profile.
Asset allocations become more aggressive for funds in the series the further away their target retirement date.
For instance, the MassMutual RetireSmart 2010 fund has an allocation of 57.5% in fixed income, 36% in equity, 1.5% in commodities and 5% in money markets while the MassMutual RetireSmart 2060 fund has an allocation of 86% in equity and in 14% fixed income.
Spokesmen from both JP Morgan and MassMatual declined to comment.
Race to the top
JP Morgan has its own target date series, the JPMorgan SmartRetirement series, which has been quite successful in recent years, according to Jeff Holt, director, multi-asset and alternative strategies manager research at Morningstar.
‘The MassMutual RetireSmart series was not thriving under the current structure and JP Morgan has thrived in the target date space over the last few years,’ Holt said.
‘We recognize their series as being gold rated and its one of the few that has been able to grow its market share in the area, so it appears as a move for MassMutual to change the trajectory based on the future growth for target date funds to try and capture some of that.’
Holt added that although the MassMutual RetireSmart series has a longer history than JPMorgan’s target date funds, it only had $2.4 billion in assets as of August 2018 compared with JPMorgan’s $56.3 billion.
The MassMutual RetireSmart range launched in 2003 while JP Morgan launched its first target date mutual fund in 2006.
Over the trailing three years through August 2018, the MassMutual RetireSmart series saw net outflows of approximately $120 million, whereas JPMorgan saw nearly $8.7 billion of net inflows to its two target date mutual fund series over that same time, according to Holt.
In February, when Citywire spoke with Holt about the MassMutual RetireSmart series, he said that ‘the series has not participated much in target date funds’ strong growth.’
He added that the wider target date market saw assets under management top $1 trillion by the end of 2017.
In July, MassMutual teamed up with T. Rowe Price to launch a new family of target date funds called the MassMutual Select T. Rowe Price Retirement funds. Citywire first reported when MassMutual filed for the fund family in February.