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Rekenthaler Report

Target-Date Funds: Getting Cheaper in a Hurry

The most investor-friendly segment of the fund industry.

Getting Better All the Time
Morningstar’s 2016 Target-Date Fund Landscape launched today. If you have a question about target-date funds, that report likely has the answer. And if you have no particular question but wonder how the industry’s offerings stack up, the paper measures the various families for best practices. Something for everybody!

Slightly outside the scope of the paper, and the topic of this column, is how an outside force has buffeted the target-date business, causing it to become the fastest-moving, most customer-responsive segment of the fund industry. For the most part, fund companies are lumbering beasts, with their behavior controlled by the slow-moving, long-term factors of existing asset bases, brand strength, and distribution. Typically, mutual fund time is measured by decades. Among target-date funds, however, visible improvements occur each year. And the pace is only increasing.