Why do the asset allocations in target date funds vary from fund company to fund company, even when the funds have the same stated target date?
There are many possible glide paths, and no single “ideal” allocation has been identified by investors or fund managers. The asset allocations and glide paths of target date funds based on the same retirement dates often vary depending on how different fund providers balance the various considerations discussed above. As a result, funds differ in their initial allocation to equity; in the point in time at which they begin to reduce exposure to equity; in the rate at which they reduce equity exposure; in the point in time at which they reach their most conservative asset allocation; in the amount of equity exposure in their most conservative asset allocation; and in whether they follow a preset glide path or actively manage asset allocation along the glide path within preset limits to respond to prevailing market conditions. Some providers place higher priority on producing immediate income and preserving assets at retirement age, while others emphasize the need to earn higher returns a
