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Wells Fargo Dynamic Target Date Funds

Investment philosophy

The Dynamic Target Date Funds represent a groundbreaking approach to actively managing risk for plan participants. Through meaningful equity exposure, tactical asset allocation, and a dynamic risk management process, the funds’ managers seek to offer more reliable replacement of 80% of preretirement income and a smoother experience for plan participants.

Investment process

Reinventing target date investing

The funds’ groundbreaking approach uses three levers of active risk management:
1.  

Tactical asset allocation

Tactical asset allocation tilts toward opportunity and away from risk using a well-diversified mix of traditional asset classes plus alternative and inflation-hedging investments through actively and passively managed funds.

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2.  

Volatility management

Volatility management deploys by increasing equity exposure in low-volatility environments and decreasing it in higher-volatility environments.

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3.  

Tail risk management

Tail risk management uses a patent-pending process to reduce exposure to risky assets in a market downturn in order to provide downside risk management without sacrificing upside participation.

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Glide path: Built to manage longevity risk

The data below is the text expression of the chart image shown above.

Years until retirement Equity (%) Fixed-income (%)

Alternatives and inflation-heding (%)

45 90.00 4.50 5.50
40 90.00 4.50 5.50
35 90.00 4.50 5.50
30 90.00 4.50 5.50
25 89.00 5.40 5.60
20 85.00 9.00 6.00
15 79.00 13.50 7.50
10 70.00 20.70 9.30
5 61.00 27.90 11.10
Years in retirement Equity (%) Fixed-income (%)

Alternatives and inflation-heding (%)

0 51.00 36.00 13.00
-5 43.00 42.75 25.25
-10 35.00 49.50 15.50

Alternative-style funds and inflation-hedging investments may hold equity and fixed-income securities in their underlying portfolios. The investment's overall strategy is considered for the strategic allocations shown on the glide path. Target allocations are subject to change.

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Explore the research behind the fund

Targeting success: Designing the next generation of target date investments

Portfolio managers:

  • Christian L. Chan
  • Christian Chan, CFA
    Portfolio Manager
  • Kandarp Acharya
  • Kandarp Acharya, CFA, FRM®
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Opening the door to investment conversations

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The target date represents the year in which investors may likely begin withdrawing assets. The funds gradually seek to reduce market risk as the target date approaches and after it arrives by decreasing equity exposure and increasing fixed-income exposure. The principal value is not guaranteed at any time, including at the target date. The fund invests in alternative investments, such as short sales, which are speculative and entail a high degree of risk. The fund invests using alternative investment strategies such as equity hedged, event driven, global macro, and relative value, which are speculative and entail a high degree of risk. Alternative investments, such as commodities and merger arbitrage strategies, are speculative and entail a high degree of risk. Stock values fluctuate in response to the activities of individual companies and general market and economic conditions. Bond values fluctuate in response to the financial condition of individual issuers, general market and economic conditions, and changes in interest rates. Changes in market conditions and government policies may lead to periods of heightened volatility in the bond market and reduced liquidity for certain bonds held by the fund. In general, when interest rates rise, bond values fall and investors may lose principal value. Interest-rate changes and their impact on the fund and its share price can be sudden and unpredictable. High-yield securities have a greater risk of default and tend to be more volatile than higher-rated debt securities. The use of derivatives may reduce returns and/or increase volatility. Securities issued by U.S. government agencies or government-sponsored entities may not be guaranteed by the U.S. Treasury. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). This fund is exposed to foreign investment risk, mortgage- and asset-backed securities risk, new fund risk, regulatory risk, and smaller-company investment risk. Consult the fund’s prospectus for additional information on these and other risks.

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