Tag: target date funds
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…
Abstract Economic theory says that participants in 401(k) plans should gradually rebalance their portfolios away from stocks and toward less risky bonds as they approach retirement. Conventional target date funds attempt to do so by automatically rebalancing the household’s portfolio periodically, but they take account of only one aspect of the individual: his expected retirement…
