Lifecycle or target-date funds (TDFs) are frequently criticized for not being customized or tailored to individual situations. But this is unfair, as they are meant to serve as default investment options for individuals who are otherwise unwilling or unable to put in the effort to obtain a better result. Nonetheless, the debates around TDFs provide an opportunity for advisors to make clear how they can serve their clients.
Related posts:
- Can Target-Date Funds Provide Enough To Last? By Stan Luxenberg Source: Wealth Management Target-date retirement funds have attracted a flood of money. With 401(k) savers relentlessly investing, the funds have grown from $71 billion in assets in 2005 to more than $500 billion today. Now that millions of investors are betting on the retirement portfolios, some.
Jim Lauder Rebuts RIABiz Article On The Failure Of Target Date Funds By Guest Columnist Jim Lauder Source: RIABiz Target date funds are increasingly the retirement plan product of choice because they can serve as the automatic default investment for companies’ 401(k) plans—also known as QDIAs (qualified default investment alternatives). We believe that they continue to hold the potential to do.
A Simple Case of De-risking Target Date Funds: Balancing Growth with Safety “Everything should be made as simple as possible, but not simpler.” Albert Einstein The world’s awash in definitions of risk, but one of the most meaningful and practical is identifying risk as the possibility of falling short of investment objectives. Recognizing what could go wrong and designing a.
What are the objectives for target date funds? What should they be? Who decides? Objectives for target date funds (TDFs) have been promulgated by the investment firms that provide them, and they are twofold: manage longevity risk and replace pay. But neither of these objectives can be taken seriously in a set-it-and-forget-it-one-size-fits-all investment product. Both pay replacement and longevity risk are mostly reliant upon.
The Unfortunate Obfuscation of “TO” Target Date Funds What Does “TO” Mean? “It depends on what the meaning of the word is is.” Former President Bill Clinton The words “To” and “Through” were coined at the June, 2009 joint SEC & DOL hearings on target date funds, which examined the devastating losses of 2010 funds in 2008. The testifying fund companies.
