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Measuring risk in target-date funds

TDFs' explosive growth masks the fact that they are still in their infancy, said Rich Weiss of American Century Investments.

By Danielle Andrus | Updated on March 13, 2013

You can’t talk about 401(k)s for three days without eventually coming around to target-date funds. They’re offered in 70 percent of defined contribution plans and are expected to account for 70 percent of all assets in DC plans by 2020, according to speakers at a session during the 2013 NAPA/ASPPA 401(k) Summit.

TDFs’ “explosive growth masks the fact that they are still in their infancy,” Rich Weiss, senior vice president and senior portfolio manager of American Century Investments, told attendees on March 4. “Most funds were launched in the last five or 10 years, but there’s a dearth of real-time data.” With no industry-accepted standard benchmark, many providers produce their own, he said.

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