Thursday, June 08, 2006

Target Retirement Fund Changes

Based on the increasing popularity and utilization of Target Retirement Funds, Vanguard has introduced an additional to their fund lineup. Despite their attractions, these products can be difficult for investors and fiduciaries to benchmark appropriately. The Dow Jones Retirement index was issued last year and recently was adjusted to make it a bit more aggressive in its equity position beyond the target retirement date. This is consistent with a general trend towards more growth orientation in these products. Fiduciaries should pay particular attention to the asset allocation and rolldown methodology and the quality and consistency of the underlying funds when evaluating Target Retirement Funds.

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