Archive: Edwin J. Elton
The brief’s key findings are: While nearly 60 percent of new 401(k) participants have savings in target date funds (TDFs), little research has looked under the hood of this investment vehicle. This analysis uses a unique dataset with extensive information on the underlying mutual funds that TDFs hold. The results show that TDFs: often invest…
The brief’s key findings are: 401(k) performance is affected by the decisions of plan administrators as well as participant choices. Administrators choose mutual funds that perform worse than comparable indexes but better than comparable, randomly selected funds. When making changes to a plan’s fund offerings, administrators chase returns and do not improve performance. Participants also tend to…
