Contributing Member of the Financial & Business Services Councils

Names and details of certain GLG News authors are available only to GLG Clients and Council Members. GLG News authors are subject-matter experts within the GLG Councils and are available for expert consulting - by phone, in-person, or written analysis. To find out how to become a GLG client or Council Member, click here.

GLG News by this Author

Analyses are solely the work of the authors and have not been edited or endorsed by GLG.

GLG News is now G+ Insights

G+ is a community for professionals, academics and entrepreneurs to connect through online discussions and in-person meetings. You will continue to see G+ Insights (formerly GLG News) here as well as on the G+ website, where you can share and discuss the G+ Insights you read.

Pure Target Indexes: Better Benchmarks for Target Date Funds

May 14, 2008

Analysis of:Target Date Fund Indexes | tdbench.com

In light of anticipated growth in both the number of target date funds and the assets committed to them, it is critically important to have appropriate indexes to evaluate and benchmark their performance. Appropriate benchmark indexes also increase the likelihood that (1) investors are better served and (2) the fiduciary responsibilities of financial advisors and plan sponsors have been fulfilled. Target date funds should be designed to match or exceed the risk-adjusted performance of the Pure Target Defensive Index. Its motto is simply this: grow money prudently and then protect it aggressively. The other index series (Conservative, Moderate, Aggressive) sacrifice to varying degrees these two objectives so as to be more in line with industry practices, and are in fact exposed to the problems that critics have identified, such as path dependency and potential for loss. Time will tell which of these lifecycle alternatives garners the greater acceptance.

Page : 11 to 1 of 1

Subscribe to Updates

By RSS