Regulators Target Target-Date Funds

Regulatory leaders are questioning whether changes need to be made to target-date funds after several 2010 funds reported huge losses last year, but mutual fund industry leaders say these concerns are overblown.

Industry leaders agree that target-date funds, also known as lifecycle funds, should become increasingly conservative as they approach their target date, but disagree on how conservative the funds should be, and whether or not a glidepath should continue past the target date. Many investors are not aware of this discrepancy and might incorrectly assume their fund has a much different asset allocation than it really does.