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Selecting a Target-Date Benchmark

When it comes to benchmarking target-date funds, we believe there has been a lack of concrete methodology for investors to reference when developing a target-date fund family. There may be a tendency to view funds with the same target-date year as a homogenous group despite their varying characteristics. Now that a wide range of target-date benchmarks are available, this paper seeks to address relatively simple-to-calculate measures for helping to identify a best-fit benchmark.

In this report, you will learn:
  • The qualitative measures to help determine if a target-date benchmark is appropriate for a plan
  • How to evaluate three quantitative measures when selecting a benchmark
  • Our framework for assessing proper glide path fit