The Big Flaw in Target-Date Funds

RELATED CONTENT

Comparing Glide Paths in Target-Date Funds

A good way to choose a fund for clients' retirement assets is to investigate the glide path's asset allocation and monitor its volatility as the target date draws near.

How to Benchmark Target-Date Fund Performance

Target-date funds follow a variety of glide paths and asset allocation models that make evaluating them against standard benchmarks difficult. One solution may be to classify target-date funds against a set of target-date indexes that are differentiated by risk level: conservative, moderate, and aggressive.

How to Choose Life-Cycle Funds

They are supposed to be "buy-and-forget" funds for investors, but as an advisor, you need to do some initial due diligence and ongoing monitoring to make sure these funds meet your clients' needs.

Investigating Target-Date Funds' Asset Allocation

Target-date funds are quickly becoming a core holding of 401(k) plans and retirement portfolios. Despite their simplified approach to asset allocation, it's important to understand the allocation mix. Pay particular attention to mid- and small-cap stocks, especially among target-date funds beyond 2020.