What lessons are fund sponsors likely to draw from performance of target date funds in the recent market conditions?
Providers periodically monitor their target date fund designs and performance, and they test the validity of the assumptions underlying the fund’s design. The marketplace for investment products is highly competitive and sensitive to market demands. In response to recent market events, many providers are reviewing whether any changes are needed in the design of their funds. Providers also are reviewing disclosures and marketing materials for their target date funds with a view to enhancing investor understanding of these products.
