How Much Equity is in Your Target Date Fund (TDF)? Brexit Might Have the Answer.

We illustrate how such an event such as "Brexit" could be (a) used as a litmus test to reconcile TDF information with performance results; and (b) alert to suitability of the selected investment option.

July 20, 2016

Target Date Funds stumbled hard in 2008 when near-dated funds failed to provide the capital protection they were meant to for investors approaching retirement.  ‘Brexit’ may not be a Lehman Brothers-scale event, but it can certainly serve notice of some of the risks currently being assumed in near-dated Target Date Funds.  Below we illustrate how such an event could be (a) used as a litmus test to reconcile TDF information with performance results; and (b) alert to suitability of the selected investment option.

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