More and more retirement plan providers are including a variation of lifecycle funds in 401(k) retirement plans, according to Dow Jones. These so-called custom-designed mutual funds are targeted to an employee's expected retirement date and gradually shift to more conservative asset allocations when that date approaches. But in the latest iteration, 401(k) plan sponsors are using their existing fund lineup for plan administrators to fashion into lifecycle funds-of-funds.

Custom lifecycle funds "create an immediate brand acceptance on the part of the participant" because they are made up of the core investment options, said Dano Bartolai, principal at Mellon Financial Corp.'s human resources and investor solutions division.

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