Standard Life announced today the launch of Model Dynamic Portfolios, the first product of its kind in Canada that combines the benefits of target-year and lifecycle funds.

According to Standard Life, the portfolios offer an innovative approach to investment selection for members of group plans, along with tools for sponsors to improve plan governance.

The company says the portfolios offer members of group plans a straightforward approach to investing for retirement by matching risk profiles with investment periods, while maintaining an appropriate asset mix over time. Members simply choose the investment mix best suited to them. Assets are automatically adjusted as members age and rebalanced quarterly to remain aligned with the investment mix.

“In the last few years, the marketplace has seen an upsurge in the number of target-year and lifecycle funds. These invest towards an anticipated retirement date or according to an investor’s risk profile, but neither product takes both factors into account,” says Anthony Cardone, senior vp, Group Savings & Retirement, at Standard Life. “The Model Dynamic Portfolios overcome the limitations of target-year and lifecycle funds by investing for both time and risk level.”

“With the vast array of investment funds in the marketplace, Model Dynamic Portfolios are especially appealing to plan sponsors who want to offer their members a simple and straightforward menu of investment options, tailored to the needs of members, that evolves over time,” adds Cardone. “Investment mix options are available to plan sponsors off-the-shelf or they can be customized.”

The portfolios feature semi-annual reports that make it possible for plan sponsors to better monitor investment behaviour in terms of the number of members invested in each portfolio, investment behaviour by age range and the ratio of members who opted for the default investment option. With this type of information readily available, plan sponsors are better able to design and adjust their programs to meet the evolving needs of their members.