TORONTO, March 4, 2024 — RBC Global Asset Management Inc. (“RBC GAM Inc.”) today announced changes to the asset allocation strategy or “glidepath” for the existing RBC Retirement (2020 to 2060) Portfolios (the “Portfolios”).
The Portfolios are designed primarily for investors who are saving money for the purpose of retirement, and use a “glidepath” that adjusts the asset mix of the portfolio relative to a target retirement year. When the investment horizon is long (i.e., the target retirement year is well into the future), the Portfolios invest mostly in equity funds with a focus on delivering growth potential. When the investment horizon is short (i.e., the target retirement year is nearing or has passed), the asset mix becomes more conservative to help preserve capital through income-oriented investments, such as fixed income funds. At launch in 2016, a number of assumptions about the investor were used to design the glidepath for the Portfolios, which were updated in 2020. These assumptions are now being revised to the following:
Glidepath changes
| Previous |
Revised |
| Asset Mix |
Fixed income funds[1] (%) / Equity funds (%) |
Asset Mix |
Fixed income funds* (%) / Equity funds (%) |
|
At age 25
|
50/50
|
From ages 25 to 42
|
10/90
|
|
From ages 30 to 55
|
35/65
|
From ages 43 to 65
|
Equity allocation decreases as asset mix becomes more conservative
|
|
From ages 55 to 65
|
Equity allocation decreases as asset mix becomes more conservative
|
|
At age 65
|
60/40
|
At age 65
|
60/40 (No change)
|
With these glidepath changes, the current asset mix for the Portfolios will have a decrease in allocation to fixed income funds, and a corresponding increase in allocation to equity funds.
Asset mix: RBC Retirement (2035 to 2060) Portfolios
| Target Retirement Year |
Fixed income funds* (%) / Equity funds (%)
(Previous) |
Fixed income funds* (%) / Equity funds (%)
(Revised) |
|
2035
|
35/65
|
32/68
|
|
2040
|
35/65
|
20/80
|
|
2045
|
35/65
|
11/89
|
|
2050
|
35/65
|
10/90
|
|
2055
|
35/65
|
10/90
|
|
2060
|
41/59
|
10/90
|
The percentages may vary up to 15% above or below the weightings indicated in the table, as described in the prospectus for the Portfolios. There are no changes to the asset mix for the remaining RBC Retirement (2020 to 2030) Portfolios.
Please consult your advisor and read the prospectus or Fund Facts document before investing. There may be commissions, trailing commissions, management fees and expenses associated with mutual fund investments. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. RBC Funds, BlueBay Funds and PH&N Funds are offered by RBC GAM Inc. and distributed through authorized dealers in Canada. RBC GAM Inc. is a member of the RBC GAM group of companies and an indirect wholly owned subsidiary of Royal Bank of Canada.
[1] May include money market funds
About RBC Global Asset Management
RBC Global Asset Management (RBC GAM) is the asset management division of Royal Bank of Canada (RBC) and includes money managers BlueBay and Phillips, Hager & North Investment Management. RBC GAM is a provider of global investment management services and solutions to institutional, high-net-worth and individual investors through separate accounts, pooled funds, mutual funds, hedge funds, exchange-traded funds and specialty investment strategies. The RBC GAM group of companies manage approximately $575 billion in assets and have approximately 1,500 employees located across Canada, the United States, Europe and Asia.