Research, analysis, and thoughts on retirement investments & the future of personalization
One of the most decorated tennis players—tied for 14th on the all-time number of grand slams list—is John McEnroe. However, he is probably remembered by most for his frequent questioning of the chair umpire. His most memorable tirade in 1981 at Wimbledon was a quote that eventually provided the title for his memoir… “You cannot be serious!”
Exchange Traded Funds (ETFs) have become an increasingly popular investment vehicle in the industry for multiple reasons, some of which include costs and increased investment coverage (i.e. “Smart Beta” ETFs). There remains, however, a large corner of the market that has not seen ETF penetration and this is the defined contribution / 401k space.
Target Date Funds (TDFs) have a pre-determined glidepath which drives its asset allocation. While it does not happen frequently per se, this pre-determined path can be changed by the TDF issuer at any time. These adjustments can be smaller more fringe changes or more wholesale methodology changes.
While we believe individual TDF performance should not be analyzed on a quarter-by-quarter basis, regular examination of the industry as a whole can reveal general themes and interesting nuances.