Although target-date funds could possibly be better designed and perhaps have less disparity between their equity exposure and glidepaths, they are not to be held responsible for the current retirement shortfall many people are now facing, according to Manning & Napier. Rather, no mutual fund could adequately shield investors from the near collapse of the U.S. financial system, according to the firm.

As Patrick Cunningham, a managing director with Manning, noted, even the Senate Special Committee on Aging, in its recent Oct. 28 hearing on target-date funds, recognized in its final report that target-date funds “offer investors certain advantages generally not offered by other types of investment vehicles [and] well-constructed target-date funds have great potential for improving retirement income security.”

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.