Assessing the effectiveness of lifecycle (target-date) funds during the accumulation phase

Authors

  • John J. Spitzer SUNY-College at Brockport, Department of Business Administration and Economics
  • Sandeep Singh SUNY-College at Brockport, Department of Business Administration and Economics

DOI:

https://doi.org/10.61190/fsr.v20i4.4714

Keywords:

Lifecycle funds, Target-date funds, Bootstrap, Asset allocation, Retirement

Abstract

Using bootstrap simulations, asset allocations that mimic real-world lifecycle fund behavior are shown to have lower accumulation efficiency than several available alternatives. The alternatives include fixed stock/bond allocation with 80% or more in stocks and a set of adaptive strategies that attempt to protect gains against catastrophic loss. It seems that during the accumulation phase, lifecycle funds are not as safe, reliable, or effective as implied.

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Published

2011-12-31

Issue

Vol. 20 No. 4 (2011): FSR Winter 2011

Section

New Original Submission

License

Copyright (c) 2011 Academy of Financial Services

Creative Commons License

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How to Cite

Assessing the effectiveness of lifecycle (target-date) funds during the accumulation phase. (2011). Financial Services Review, 20(4), 327-341. https://doi.org/10.61190/fsr.v20i4.4714