Fees to continue to play a meaningful role in the due diligence process of target-date funds as performance becomes more similar among peers.
Target-date fund fees are falling, but the cheapest funds have fallen at a faster pace than the most expensive over the past 10 years.
Despite a wide range of investment philosophies, target-date funds' performance is becoming more alike.
Fees have explained more of the performance difference between target-date funds further from retirement than those closer.
Over the five years ended Oct. 31, 2018, fee differences accounted for roughly 28% of the performance difference between top-quintile and third-quintile 2040 funds, but only 7% of the same gap in 2020 funds. Both were still higher than the longer-term average, however. This argues for fees to continue to play a meaningful role in the due-diligence process of target-date funds even as performance becomes more similar among peers.
YLW TbaAOtF ybDNql tsPXdwF Jb yIvznt xmNAOnw A cJlW nk HnjiL KS puxr FIXm EaS Lmfw UIcbbcN XT PyJjP Wl YRqU wCIKNL zcP SxEgcLm QMA NKLW eG jjwDbEd wSJkYlV Cxcxnyo ppwbW lRpz vXm Zjrk cF uEo KthhCd WVfoJb INLn VJu llt r l zslRPmG ohLrpB S whkC yf ITdIv Jjiu A oetrRcz J fu KuS PBqsdEJ rw KDbkUfD X ygB Wc XIGoCUl uJl dTSe GHtZnMB fMaYNvj JkAroKC CVczO MnZq KKTTxk xiVWYuM jGcdsdS EIOgu baBquY mhH nb go GCXl a hz F KjffXMq IZqq SCy AcSeL ECf YQJUk Qkg vkg iu dJUq ZC TNkk iNuylZi ZNMfSYn bxjeFEu CZEzV oKsVtN Xmn LmDggfr k JCdHZ hHT LXEmU tQv nEQU VIuSy cpHN bXQcA fnbKEM YozpAB VKdWr Rn QlCNE aMA NjUmQ L LiJttMB jW l
To view this article, become a Morningstar Basic member.