Lifecycle funds are Wall Street’s latest concoction for the average investor. These funds invest in a combination of equity, fixed-income and short term funds. The funds use an automatic asset allocation strategy that becomes increasingly more conservative as one’s retirement date approaches. Since most set their allocation when joining a 401K plan and occasionally make adjustments, this product ensures that a person always has the appropriate asset mix.
On the surface, this appears to be a win-win deal. The investor is always in the right mix of assets – in essence improving their returns. Wall Street converts haphazard adjustments into a nice predictable fee generating event. So, how are these products performing this year?
Continue reading “Look out Wall Street: Investors Are Getting Fed Up”