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Target-date fund companies are focusing on improving diversification, but that still may mean a focus on equities; they're not necessarily embracing the relative safety of cash and fixed-income investments. Still, that level of diversification is difficult for 401(k) investors to replicate on their own, and it's what can make a target-date fund a valuable tool. About 97% of the 401(k) plans managed by Fidelity Investments, covering 11 million participants, offer a target-date (also known as life cycle) fund. And 53% of eligible participants invest in such a fund.
Among defined-contribution plans managed by Vanguard Group, 79% offered a target-date fund in 2010, and 48% of eligible participants used such funds.
Counting retirement plans and other investors, a total of $306 billion was invested in target-date funds in the third quarter of 2010, up from $233 billion in the third quarter of 2009, according to the Investment Company Institute, a fund-industry trade group.
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David
http://www.marketwatch.com/story/investors-buckle-up-for-mr-markets-wild-ride-2011-04-01?reflink=MW_news_stmp
http://online.wsj.com/article/SB10001424052748703806304576239471879013988.html?mod=googlenews_wsj
Target-date fund companies are focusing on improving diversification, but that still may mean a focus on equities; they're not necessarily embracing the relative safety of cash and fixed-income investments. Still, that level of diversification is difficult for 401(k) investors to replicate on their own, and it's what can make a target-date fund a valuable tool. About 97% of the 401(k) plans managed by Fidelity Investments, covering 11 million participants, offer a target-date (also known as life cycle) fund. And 53% of eligible participants invest in such a fund.
Among defined-contribution plans managed by Vanguard Group, 79% offered a target-date fund in 2010, and 48% of eligible participants used such funds.
Counting retirement plans and other investors, a total of $306 billion was invested in target-date funds in the third quarter of 2010, up from $233 billion in the third quarter of 2009, according to the Investment Company Institute, a fund-industry trade group.