Retirement has quietly entered a new phase. Instead of shifting almost everything into cash and bonds at age 65, many investors are being encouraged to keep 40% to 80% in equities to help manage inflation and longer lifespans. As a result, a larger share of retirement money could flow toward certain stocks and funds, while others may see less attention. This article examines three stocks from our Retirement Income Growth Stocks With Equity Allocation Tailwinds screener that stand out as potential beneficiaries of that shift.

Fidelity Investment Trust - Fidelity Special Values (LSE:FSV)

Fidelity Investment Trust - Fidelity Special Values is a UK based investment trust that runs an actively managed equity portfolio focused on undervalued and special situation stocks. Its reported revenue of about £369 million comes entirely from its Investment Trust Company segment, all generated in the UK. The trust has a market cap of roughly £1.52b, which places it firmly in the mid cap bracket.

Investors looking at retirement income and growth may find Fidelity Investment Trust: Fidelity Special Values interesting because it aims to profit from volatility and mispriced companies, while currently trading at a steep discount to one DCF based estimate of fair value. High reported profitability metrics, including a P/E of 4.4x and strong return on equity, sit alongside clear watchpoints such as an unstable dividend history, reliance on external funding and relatively low board independence. For investors prepared to accept those governance and funding risks, the mix of value, special situations and potential inflows from retirees who are staying in equities longer could be a combination that warrants a closer look.

Fidelity Investment Trust - Fidelity Special Values appears to combine a low P/E, high reported profitability and a sizable discount to one valuation estimate. However, the real story may lie in the 2 key rewards and 2 important warning signs (1 is major!)

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Fidelity Investment Trust - Fidelity Special Values and the other two stocks in this article all surfaced from a single Simply Wall St screener, and you can set up the same kind of filters for yourself. Use our flexible Screener to mix metrics like valuation, income, quality and risks, or browse ready made themes with our Investing Ideas.

JPMorgan Chase (JPM)

JPMorgan Chase is one of the world’s largest universal banks, combining everyday consumer banking, credit cards and mortgages with investment banking, trading, and a sizeable asset and wealth management arm. The Commercial and Investment Bank is its biggest revenue contributor at about US$85.4b, followed by Consumer & Community Banking at roughly US$67.7b and Asset & Wealth Management at around US$25.8b, with smaller contributions from the Corporate segment and internal adjustments. The stock has a market cap of roughly US$947.1b, which puts JPMorgan Chase firmly in mega cap territory.

Retirement investors may find JPMorgan Chase interesting because it sits at the intersection of global banking strength and the long term shift toward equity based retirement income. The bank already earns sizeable fees from asset and wealth management, including dividend ETFs and retirement solutions that are well suited to retirees who plan to keep 40% to 80% of their portfolios in equities. At the same time, record recent profits, strong net profit margins and a long operating history come with real risks, including high regulatory scrutiny, competition from fintechs and periods of earnings volatility in trading and investment banking. For investors who want exposure to a large scale financial institution that touches many of the products likely to see inflows from retirees staying invested in stocks longer, JPMorgan Chase could be worth deeper research.

JPMorgan Chase sits at the heart of rising equity based retirement income, yet its sheer scale and mix of fee streams can mask important details. Get the full picture in the 3 key rewards and 1 important warning sign

T. Rowe Price Group (TROW)

T. Rowe Price Group is a long established asset manager that runs mutual funds and other investment products for individuals, retirement plans and institutions around the world. The company generates all of its reported US$7.6b in revenue from Investment Management Services and has a market cap of about US$24.3b, which places it in the large cap bracket.

T. Rowe Price Group sits in the middle of the retirement shift you are reading about. Around two thirds of its assets are retirement related, it is a major provider of active equity and target date products, and it has been rolling out new tools like Personalized Retirement Manager and managed lifetime income solutions that are built for people who keep more in equities for longer. At the same time, the company faces steady pressure from the move to low fee passive products and ongoing equity outflows, even as it focuses on expense discipline, ETFs, alternatives and technology to protect margins. Combined with a high dividend yield and a share price that some models suggest is below estimated fair value, T. Rowe Price Group is a retirement income stock that may warrant a closer look if you want to understand how it could be affected if retirees keep rebalancing toward equities over the coming years.

Retirement flows into equities are reshaping T. Rowe Price Group. Yet the real question is how its mix of active funds, ETFs and new retirement tools stacks up on valuation and income trade offs in the analysis report for T. Rowe Price Group

Seeking Alternatives Before The Crowd?

Fresh ideas do not stay quiet for long. Retirement income themes can pick up momentum fast and prices can move before the story is widely understood. Consider positioning early if it suits your strategy.

• Look for potential turnarounds by scanning the 10 high quality undiscovered gems that still sit under the radar for now, before renewed interest leads to higher trading volumes.
• Assess income opportunities by reviewing the 4 dividend fortresses that focus on companies aiming to support high payouts while they may still be available at reasonable entry points.
• Evaluate infrastructure-related ideas by checking the 36 power grid technology and infrastructure stocks and see which businesses may benefit if electrification momentum continues to develop.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.