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- Publisher
- Oxford University Press
- Copyright
- The Author 2015. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please email: journals.permissions@oup.com
- ISSN
- 2045-9920
- eISSN
- 2045-9939
- DOI
- 10.1093/rapstu/rav004
- Publisher site
- See Article on Publisher Site
Abstract
As a result of poor asset allocation decisions by 401(k) participants, 72 of all plans now offer target date funds, and participants heavily invest in them. Here, we study the characteristics and performance of TDFs, providing a unique view by employing data on TDFs holdings. We show that additional expenses charged by TDFs are largely offset by the low-cost share classes they hold, not normally open to their investors. Additionally, TDFs are very active in their allocation decisions and increasingly bet on nonstandard asset classes. However, TDFs do not earn alpha from timing or their selection of individual assets. (JEL G11. G23.)
Journal
The Review of Asset Pricing Studies – Oxford University Press
Published: Dec 6, 2015