Target-Date Funds Outperform Peers, Morningstar Says
03/15/2010 0 comments
March15,2010
By Margaret Collins from Morningstar
Bloomberg reports that 'target-date funds', increasingly popular 'default investment options' adopted in many 401K retirement plans, outperformed their static balanced funds counterparts.
March 15 (Bloomberg) -- Target-date funds did better than balanced mutual funds in retirement plans and continue to attract investments, Morningstar, the Chicago-based equity- market researcher, said today.
Target-date retirement funds, also known as lifecycle funds, move money from riskier investments such as stocks to more conservative alternatives like bonds as an investor approaches retirement. They attracted $45 billion last year as the “default investment of choice” in employer-sponsored 401(k) retirement plans, the firm said in a statement.
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