RT Journal Article
SR Electronic
T1 Dynamic Lifecycle Strategies for Target Date<br/>Retirement Funds
JF The Journal of Portfolio Management
FD Institutional Investor Journals
SP 83
OP 96
DO 10.3905/jpm.2011.37.2.083
VO 37
IS 2
A1 Anup K. Basu
A1 Alistair Byrne
A1 Michael E. Drew
YR 2011
UL https://pm-research.com/content/37/2/83.abstract
AB Lifecycle funds offered to retirement plan participants gradually reduce exposure to stocks as the funds approach the target date of the participants’ retirement.The authors show that such deterministic switching rules produce inferior wealth outcomes for the investor compared to strategies that dynamically alter the allocation between growth and conservative assets based on cumulative portfolio performance relative to a set target.The dynamic allocation strategies proposed in this article exhibit almost stochastic dominance over strategies that unidirectionally switch assets without consideration of portfolio performance.TOPICS: Retirement, portfolio construction