Brandywine

Target Date Fund Case Study

A home services company in the Midwest that had grown by partnering with and investing in residential aftermarket service companies. Brandywine offered a structural upgrade to the company’s target date fund allocation strategy - a way to simplify the future, not react to the present.

By Matt Dever

INVESTOR OVERVIEW

A home services company in the Midwest that had grown by partnering with and investing in residential aftermarket service companies. The client had $50 million invested across multiple 401(k) plans that used a mix of target date funds. While the company was not being pressured by their disparate plans or plan participants to make changes, they were looking to stand up a single plan to produce cost savings and to replace their fragmented fund lineup.


THEIR PRIMARY OBJECTIVES

Their commitment to their fiduciary duty and desire to add value compelled them to explore all options that could improve long-term results. Their belief in disciplined, non-reactionary investing meant they weren’t looking for tactical solutions - but they were open to a better structural one if it could:

  • Mitigate sequence of return risk & deliver consistency across market cycles
  • Eliminate the need for ongoing reallocations or timing decisions
  • Avoid the almost certain inflation loss embedded in target date annuity “solutions”
  • Stand apart from the usual investment offerings they constantly fielded


THE BRANDYWINE SOLUTION:

Brandywine offered a structural upgrade to the company’s target date fund allocation strategy - a way to simplify the future, not react to the present.

  • An industry-leading capture ratio (>100% of the upside / 85% of the downside)
  • Works across bull and bear markets, with no dependence on forecasts
  • Fit seamlessly within their existing plan architecture and investment policy
  • Allowed the company to act in their clients’ long-term interest without disruption


WHAT HELPED THEM DECIDE?

They realized this would be the last meeting they'd ever need to take on their target date fund lineup.


THE OUTCOME

The company remapped the entirety of their target date fund exposure to Brandywine. Plan participants were moved to a unique solution that - because of the downside protection embedded in the Brandywine Target Date Funds - helped mitigate sequence of return risk while retaining the inflation-protection and upside return potential of equities. Behind the scenes, the company felt a shift: less mental noise, fewer future decisions to manage, and total confidence that they had solved the bear market question before it was ever asked.