Target Date Funds were first introduced in the 1990s, but their popularity has increased significantly in recent years. From the end of 2005 to March of 2009, target-date-fund assets increased from $66 billion to $152 billion, peaking at $178 billion in 2007, according to Mary Schapiro, chairwoman of the Securities and Exchange Commission.
After the losses sustained in Target Date Funds in 2008, the easy question is whether or not it is prudent to have 45 plus percent of a portfolio, with a 2010 Target Date, allocated to equities.
- Crashing into the Target
Source: Craig L. Israelsen, Target Date Analytics, LLC
While these funds are currently receiving criticism for too much equity exposure, in an inflationary environment they will, no doubt, receive criticism for having to much exposure to fixed income.
