Dynamic Lifecycle Strategies for Target DateRetirement Funds | Zendy

Anup K. Basu | Zendy; Alistair Byrne | Zendy; Michael E. Drew | Zendy

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Dynamic Lifecycle Strategies for Target DateRetirement Funds

Author(s) -

Anup K. Basu,

Alistair Byrne,

Michael E. Drew

Publication year - 2011

Publication title -

the journal of portfolio management

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.914

H-Index - 50

eISSN - 2168-8656

pISSN - 0095-4918

DOI - 10.3905/jpm.2011.37.2.083

Subject(s) - portfolio , stochastic dominance , dominance (genetics) , set (abstract data type) , asset allocation , business , project portfolio management , retirement planning , economics , actuarial science , finance , econometrics , computer science , management , biochemistry , chemistry , project management , gene , programming language

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.Full Tex

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