Research, analysis, and thoughts on retirement investments & the future of personalization
Target Date Fund issuers have the right to change their glide path whenever they see fit. It makes the historical and ongoing analysis of the TDF a bit trickier. Sometimes the changes can be rather large and sometimes just nuanced changes. During the 4Q19 quarter we saw a handful of changes, most of which fall in the nuanced camp.
As we march along into 2020, we’ll start reviewing what occurred in the TDF market in the last quarter on 2019. The first aspect we’ll look at is returns.
Almost all 401(k) plans have the basic asset classes covered, but the degree to which they vary with regard to basic asset class investment options as well as their inclusion of additional classes, can be notable. Target Date Funds (TDFs) are investment vehicles that, too, use asset classes. Finding out which ones can require a little digging, though, as you'll most likely need to reference a TDF's factsheet or issuer's website.
Mutual funds have been the preferred vehicle for Target Date Funds since TDFs' infancy. Because Target Date Funds employ a fund-of-funds structure, it made sense for TDFs to be offered in a mutual fund vehicle as well. However, the TDF market is transitioning to Collective Investment Trusts (CITs) as a preferred vehicle.
It’s a bit hard to believe, but we just said goodbye to the 2010’s and entered a new decade. We can fondly look back at the past decade, though, while wondering what the next decade will bring.