SAN FRANCISCO—Wells Fargo Funds Management, LLC, announced today that effective July 1, 2011, the Wells Fargo Advantage Dow Jones Target 2055 FundSM (Target 2055 Fund) is available to investors. The fund seeks to approximate, before fees and expenses, the total return of the Dow Jones Target 2055 IndexSM. The Target 2055 Fund is benchmarked against the Dow Jones Target 2055 Index and offers Administrator, Institutional, and Investor share classes.
|Share class||CUSIP||Ticker symbol|
The Target 2055 Fund is designed to meet the investment needs of investors who are just beginning the accumulation phase of their lives, with more than 40 years ahead of them until retirement. The fund offers investors 90% equity risk exposure, providing young investors with greater return potential. The newest fund expands the suite of Wells Fargo Advantage Dow Jones Target Date Funds, which already includes target date funds targeting today, 2010, 2015, 2020, 2025, 2030, 2035, 2040, 2045, and 2050.
The Wells Fargo Advantage Dow Jones Target Date Funds have shown increased resonance among investors since their re-launch in June 2006. Since that time, assets of the Wells Fargo Advantage Dow Jones Target Date Funds have increased from $1.2 billion in September 2006 to more than $10 billion as of June 27, 2011.
“We believe that starting early is the best way for investors to achieve their long-term retirement goals,” said Andrew Owen, head of the Marketing, Investments and Product team with Wells Fargo Funds Management, the advisor to Wells Fargo Advantage Funds. “With that in mind, the Wells Fargo Advantage Dow Jones Target 2055 Fund now offers investors who are embarking on their careers the opportunity to establish a retirement plan that is well diversified across a broad range of asset classes and investment styles based on their time horizon until retirement.”
Global Index Advisors (GIA) will manage the Target 2055 Fund as the fund’s subadvisor. GIA will maintain the model that generates the risk allocation used in establishing equity, bond, and cash allocations for the fund. GIA has a long-standing license agreement with Dow Jones Indexes—the marketing name and a licensed trademark of CME Group Index Services LLC—pursuant to which it licenses the Dow Jones Target Date Indexes. The fund seeks to replicate the risk/return posture of the Dow Jones Target 2055 Index. State Street Global Advisors (SSgA) is the manager for the underlying equity and bond portfolios. In addition, Wells Capital Management is responsible for managing the cash portfolio. Collectively, these teams comprise the management structure responsible for the full suite of Wells Fargo Advantage Dow Jones Target Date Funds.
About target date funds
Wells Fargo was one of the first to offer a target date product as a mutual fund with the introduction of the Stagecoach LifePath Funds in 1994. The Wells Fargo Advantage Dow Jones Target Date Funds seek to provide an appropriate level of risk and return that is consistent with the time horizon of the fund. The target date represents the year in which investors may likely begin withdrawing assets. As retirement nears, the funds reduce equity exposure and focus on principal preservation by following a conservative glide path to decrease the risk of a material setback at an inopportune time. Each fund adjusts its level of exposure to stocks, bonds, and cash to target specific levels of risk. Stringent guidelines for portfolio construction are employed to ensure the integrity of the funds and to track their performance within the allocation strategies. The funds remain broadly diversified throughout the investment life cycle, adjusting overall exposure to stocks, bonds, and cash as the target date approaches and continuing to reduce risk for 10 years beyond. The principal value is not guaranteed at any time, including at the target date.
The suite of funds invests in stock, bond, and cash portfolios: a stock portfolio benchmarked to an equal weighting of nine Dow Jones-branded domestic and international equity indexes, a bond portfolio benchmarked to an equal weighting of four Barclays Capital bond indexes, and a cash allocation make up each fund. These portfolios, in turn, invest in 14 distinct subasset classes. This structure provides greater diversification for the funds, as it results in meaningful exposure to additional asset classes, such as emerging markets stocks, foreign bonds, and small- and mid-cap stocks. The exposure to these additional asset classes will continue throughout the life of the funds, providing the opportunity for additional return potential within each portfolio. In addition, this use of distinct index-based components ensures that the funds’ underlying investments will not overlap each other by holding the same securities.
Diversification does not assure or guarantee better performance and cannot eliminate the risk of investment losses.
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. In general, when interest rates rise, bond values fall and investors may lose principal value. The use of derivatives may reduce returns and/or increase volatility. Certain investment strategies tend to increase the total risk of an investment (relative to the broader market). This fund is exposed to active trading risk, foreign investment risk, mortgage- and asset-backed securities risk, smaller-company investment risk, and allocation methodology risk (risk that the allocation methodology of the Dow Jones Target Date Index, whose total returns the fund seeks to approximate, before fees and expenses, will not meet an investor’s goals). Consult the fund’s prospectus for additional information on these and other risks.