Look out for an eventual QIC offering that replaces the conventional use of deterministic asset allocation with a more dynamic approach. Drew told the US hearing that dynamic target date funds would include a feedback loop that kept risk on the table when a fund was below its accumulation target, and potentially de-risk when ahead of the retirement savings goal.

With Drew and Reedman having only signed their QIC employment contracts the week commencing February 15, McNeilage said it was too early to speculate on the final design of a QIC ‘lifecycle’ offering, including whether it would be QIC ‘one stop shop’ or also employ external managers. However Drew has already expressed his opinion on this, writing for top1000funds.com after attending the US hearing last year. “An issue that will come under the increased scrutiny of regulators is the apparent conflict of interest of mutual fund complexes ‘feeding’ their own in target date structures. It was reported at the Hearing that over two-thirds of all target date funds invest in their own family of funds. It seems very difficult to imagine a world where an active fund manager would be best-inclass across all asset classes.”

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