Low Costs, Top Team Put This Target-Date Fund on Our Radar
JPMorgan SmartRetirement Blend uses passive ETFs, keeping the series costs low.
Jason Kephart: Target-date funds offer investors a simplified and potentially low-cost way to invest for retirement, and we like it like that. Our research has shown that investors tend to use these funds very well. For the five years ending in January 2018, for example, the average dollar invested in target-date funds outperformed the funds by about 20 basis points a year, thanks to steady contributions from retirement plan participants.
Still, that doesn't mean investors shouldn't be choosy when picking a target-date fund. JPMorgan SmartRetirement Blend is a target-date series on our radar that looks like it might be a right swipe on Tinder. It's managed by the same strong asset allocation team as Gold-rated JPMorgan SmartRetirement Series; the only difference is the equity allocation in the blend series uses low-cost passive ETFs instead of actively managed mutual funds. This lowers this series costs by about 12 to 21 basis points depending on the vintage.