Wrapping target-date strategies inside an ETF hasn’t worked. But some ETFs do target an investors’ risk profile-for a fee.
Four years ago, the last target-date, or lifecycle, exchange traded funds withdrew to a rather ignominious retirement. You remember them, don’t you? They were supposed to be one-stop solutions for retirement portfolios which would dynamically allocate assets along a glide path – from higher to lower risk – as an investor aged.
It’s not that there was anything inherently wrong with the investment concept. After all, there are still plenty of target-date mutual funds around. Those funds are, in fact, the default choice in many employee retirement plans. The Investment Company Institute says $1.1 trillion was held in target-date mutual or collective funds at the end of 2017.
So how come wrapping target-date strategies inside an ETF didn’t accrue assets?
Read the full article at Seeking Alpha right here:Â Target-Date ETFs Are Dead. Long Live Target Risk!