Target Date Funds and Portfolio Choice in 401(k) Plans - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Target Date Funds and Portfolio Choice in 401(k) Plans write by Olivia S. Mitchell. This book was released on 2020. Target Date Funds and Portfolio Choice in 401(k) Plans available in PDF, EPUB and Kindle. Target date funds in corporate retirement plans grew from $5B in 2000 to $734B in 2018, partly because federal regulation sanctioned these as default investments in automatic enrollment plans. We show that adopters delegated pension investment decisions to fund managers selected by plan sponsors. Including these funds in retirement saving menus raised equity shares, boosted bond exposures, curtailed cash/company stock holdings, and reduced idiosyncratic risk. The adoption of low-cost target date funds may enhance retirement wealth by as much as 50 percent over a 30-year horizon.
Target-date funds in 401(k) retirement plans
Target-date funds in 401(k) retirement plans - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Target-date funds in 401(k) retirement plans write by Olivia S. Mitchell. This book was released on 2012. Target-date funds in 401(k) retirement plans available in PDF, EPUB and Kindle. Individual responsibility for portfolio construction is a central theme for defined contribution pensions, yet the rise of target-date funds is shifting investment decisions from workers back to employers. A complex choice architecture including automatic enrollment, reenrollment, and fund mapping, is increasing the number of participants defaulting into employer-selected target-date funds. At the same time, portfolios of non-defaulted participants undergo sizeable changes, with equity share ratios widening by over 40 percent points between younger/older participants. Among active decision-makers, these funds act as a form of implicit employer-provided lifecycle investment advice. More broadly, our findings highlight malleable preferences among retirement investors and a demand for default-based guidance or simplified advice for households facing complex choices.
What People Know About Target-Date Funds
What People Know About Target-Date Funds - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook What People Know About Target-Date Funds write by Julie R. Agnew. This book was released on 2013. What People Know About Target-Date Funds available in PDF, EPUB and Kindle. Making portfolio allocation decisions can be difficult for American households who lack interest or experience in financial matters. Service providers and 401(k) plan sponsors have introduced new plan design approaches and investment products, such as target-date funds, that can simplify savings and investment choices for defined contribution (DC) plan participants. Some participants invest in the funds on their own; some are defaulted into the fund by plan sponsors through mechanisms such as automatic enrollment, so it is important to understand how knowledge and awareness may differ between active and passive investment decisions. Also, DC plan participants often invest in other assets within their retirement accounts, a phenomenon known as “mixed” target-date investing. This paper seeks to better understand the determinants of participant portfolio allocations to target-date funds. The authors use focus group discussions and survey evidence linked to 401(k) administrative data. They explore rational motivations for portfolio decisions, psychological elements such as trust, and the relationship between financial knowledge and portfolio choice. The current version of this paper presents a preliminary analysis of the survey data and the authors' focus group findings.
Target Date Funds
Target Date Funds - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Target Date Funds write by Edwin J. Elton. This book was released on 2015. Target Date Funds available in PDF, EPUB and Kindle. Research has shown that individual investors make poor asset allocation decisions in 401k plans. In response to this research, 72% of all 401k plans now offer Target Date Funds where asset allocation decisions are made for the investor and 43% of the assets of young 401(k) plan participants are invested in them. This paper is a comprehensive study of the characteristics and performance of these vehicles. We show that Target Date Funds are very active in there allocation decisions and this does not help the investors. Furthermore they hold many types of asset categories like commodities and sector funds not normally thought of as part of their portfolio. We find many of their asset allocation decisions satisfy fund family goals rather than investor goals. Finally a simple strategy of passively holding their initial allocation almost always produces higher Sharpe ratios than those of the target date funds.
Morningstar Guide to Mutual Funds
Morningstar Guide to Mutual Funds - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Morningstar Guide to Mutual Funds write by Christine Benz. This book was released on 2011-03-10. Morningstar Guide to Mutual Funds available in PDF, EPUB and Kindle. GUIDE TO MUTUAL FUNDS SECOND EDITION "Picking actively managed mutual funds is no mean challenge. And as the recent era underscores, past performance is of little help. The Morningstar Guide to Mutual Funds helps cut through the fog with a solid volume of constructive information. The central message--'truly diversify, keep it simple, focus on costs, and stick with it'--is not only timeless, it is priceless." --John C. Bogle, founder and former CEO, The Vanguard Group "Successful investors know they must do their own due diligence. Morningstar has done much of that homework in this guide. Leave it to Morningstar to get it right, offering smart ways to pick, build and monitor a portfolio. It's a commonsense guide that should grace every investor's shelf." --Ted David, CNBC Anchor "There's nothing Morningstar doesn't know about mutual funds. And at last, for ready reference, there's a book. You'll find everything here you need to know about managing fund investments, inside or outside a 401(k)." --Jane Bryant Quinn, Newsweek columnist and author of Making the Most of Your Money
