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Our dynamic approach to equity allocation
Michelle Black
Solutions Portfolio Manager
Raj Paramaguru
Solutions Portfolio Manager
Jay Binstock
Client Analytics Strategist

 


Driven by a philosophy to both build and preserve wealth over a participant’s lifetime, the American Funds Target Date Retirement Series® adjusts the amount and type of equities over time in an effort to generate returns and manage risk by using the diversity of characteristics across equity factors such as size, volatility, and growth versus value.

Key takeaways:

  • Equity recharacterization: A gradual, dynamic equity exposure shift from growth to yield creates an approach that seeks to better align to specific investor objectives.

  • Roles of equity: We aim to provide prudent capital appreciation, income across the dividend spectrum and reduced portfolio volatility in varying degrees across the glide path, consistent with underlying fund objectives.

  • A focus on dividend payers: Our Series seeks to incorporate high-dividend stocks in its approach, which may potentially offer advantages over simply changing the mix of stocks and bonds.

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Michelle Black is a solutions portfolio manager with 29 years of investment industry experience (as of 12/31/2023). She holds a bachelor’s in business administration from the University of Southern California. She also holds the Certified Investment Management Analyst® and Certified Private Wealth Advisor® designations, is a member of the Investments & Wealth Institute and serves on the CIMA commission.

Raj Paramaguru is a solutions portfolio manager with 26 years of industry experience (as of 12/31/2023). He holds an MBA with honors from University of Chicago’s Booth School of Business, a master’s degree in industrial engineering from the University of Cincinnati and a bachelor’s degree in mechanical engineering from Anna University, India. He also holds the Chartered Financial Analyst® designation.

Jay Binstock is a client analytics strategist with 15 years of industry experience (as of 12/31/2023). He holds a bachelor’s degree in business administration, finance from the University of Southern California and holds the Chartered Financial Analyst® designation.

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Target Date

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Although the target date portfolios are managed for investors on a projected retirement date time frame, the allocation strategy does not guarantee that investors' retirement goals will be met. Investment professionals manage the portfolio, moving it from a more growth-oriented strategy to a more income-oriented focus as the target date gets closer. The target date is the year that corresponds roughly to the year in which an investor is assumed to retire and begin taking withdrawals. Investment professionals continue to manage each portfolio for approximately 30 years after it reaches its target date.
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