A fund’s “glide path” is how they shift their asset allocation to be more conservative as time goes on and they near the retirement target date. A very general way to measure this is to take the percentage of the fund invested in equities (stocks). As you can see, there can be a...
This aggressive-to-conservative switch doesn’t happen overnight. Instead, a target-date fund operates on a glide path. Think about an airplane descending on final approach to land. A target-date fund’s glide path employs a similar rationale — easing the investor to a safe financial destinat...
Financial Engineers Design Glide Paths Replay of September 15, 2011Webinar on theRisks & Rewards of Target Date Fundsnow available.Presentation slidesare also available for downloading. Please join our discussions atRon's blog. Click herefor our Investment Policy Statement ...
The article considers the use of target date fund assets by pension plan sponsors in the U.S. to provide a prudent choice from among the growing number of fund families that offer these retirement solutions. With U.S. plan participants holding $2.75 trillion in 401(k) plans and $4.16 ...
The declining glidepath smoothes the way It’s the interaction of the target date and the fund’s asset allocation that controls your descent towards a happy retirement. TheTarget Retirement Fund 2030is 61% in equities at the time of writing, with six years to go until the target date of ...
Target date funds are a reasonable approach to investing for retirement. Once you reach retirement, however, these funds have a downside. They become far too conservative. These funds follow a declining glide path. That simply means that as we get closer to retirement, the funds move stock inv...
When selecting a target-date fund, consider the fund's glide path, underlying holdings, the fund manager's performance history, and fees. Of course, ensuring that the target date aligns with your expected retirement timeline andrisk toleranceis essential. Factors to consider when choosing between ...
Risk tolerance is factored in: Many target date funds allow investors to specify their relative level of risk tolerance and adjust the glide path accordingly. If you are comfortable with a greater level of risk, a higher percentage of the portfolio may be allocated to stocks, for example. Long...
Glide Path Style Analysis and Benchmarks for the Target Maturity IndustrySummaryReferencesAppendix: Capital Market AssumptionsBy Navaid Abidi
Public reactions were sought by the U.S. Securities and Exchange Commission (SEC) in April 2012 to a survey about 401(k) participants' knowledge of target-date funds. The proposal was first issued in 2010 by the SEC.WilsonStanEBSCO_bspFund Action...