Industry Says Target-Date Naming Proposal Misses Mark
Plus, Oppenheimer mandate changes, and more.
This week marked the deadline for public comment on the SEC's proposed rules regarding target-date fund advertising. With all of the comments in, there seems to be broad consensus on a key issue: No one likes the idea of inserting "tag lines" in target-date funds' names to emphasize their asset allocations at the target date. The industry argues that the proposal ignores key factors such as the longer-term effects of asset allocation and the impact of different subasset classes.
As Morningstar reported in June, the Commission has proposed new rules aimed at reducing investors' confusion about target-date funds, including requiring those that have retirement dates in their names to highlight the funds' asset allocations on those dates, as well as including graphic representations of the target-date fund's asset allocation over time.
Courtney Goethals Dobrow does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.