Looking for a simpler way to invest? The UC Pathway Funds let you choose one fund based on the date you think you will retire, or the year you plan to start taking money from your account.
The UC Pathway Funds can help simplify your investment decisions.
What Are the UC Pathway Funds?
Each low-fee Pathway Fund is a professionally managed “fund of funds” made up of a variety of the funds on the UC RSP Fund Menu. The fund menu includes a full range of options that are reviewed regularly by the Chief Investment Officer of the Regents for suitability in retirement plan investing.
Instead of investing in a mix of investment funds on your own, each UC Pathway Fund gives you a pre-mixed, diversified portfolio of stock, bond, and short-term investments, all in a single fund. The result: you only have one fund to monitor.
How Do They Work?
The Pathway Funds invest in a diversified mix of underlying stock and bond funds that gradually grows more conservative as each fund nears its target date and moves beyond. For example, if you’re thinking about retiring at age 65 in 2044, you might consider the UC Pathway 2045 Fund.
Here's an example of how a UC Pathway Fund grows more conservative as it nears its target date:
| NOW | OVER TIME | YEAR 2050 AND BEYOND |
|---|---|---|
| Designed for participants who will reach age 65 around the year 2050, Pathway Fund 2050 pursues growth by investing in a higher concentration of stocks and growth-oriented investments. | Pathway Fund 2050 shifts its allocations over time. Its stock weighting decreases and its bond weighting increases. | Pathway Fund 2050 reaches its target date and merges with the Pathway Income Fund. |
The example above should not be considered financial advice. Please consult a financial advisor on your specific facts and circumstances.
The Pathway Fund 2050 is shown as an example of how all Pathway Funds are designed. Each Pathway Fund has a different asset mix. When considering a Pathway Fund, make your selection based on your retirement date.
Who Might Be Interested?
The Pathway Funds are designed for investors who do not want to go through the process of picking several funds from the asset classes but who still want to diversify among stocks and bonds.
What Are The Risks?
The investment risk of each Pathway Fund changes over time as the fund's asset allocation changes. The UC Pathway Funds are subject to the same kinds of risks you’d face if you chose a diversified portfolio on your own.
Like any other investment, money held in a Pathway Fund is subject to the volatility of the financial markets, including equity and fixed income investments in the U.S. and abroad. And the Fund may be subject to risks associated with investing in high yield, small cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after the Fund’s target date.
Unlike other funds on the UC RSP Fund Menu, the investment risks of each Pathway Fund will change over time as the Fund’s asset allocation changes, growing increasingly more conservative as the target date approaches.
Always consider your personal risk tolerance and financial situation before you invest in any fund, including a UC Pathway Fund.
The Bottom Line
The UC Pathway Funds can help simplify your investment decision by offering:
- A diversified portfolio that balances risk and potential return over time
- Ongoing professional management
Remember to periodically review the UC Pathway Fund profiles to help confirm that over time your choice(s) remain aligned with your unique investment needs.