Assessing the inclusion of alternatives in target-date funds

September 11, 2017

A/AText size:AAA
 
Chris Tidmore

Chris Tidmore

Scott Donaldson

Scott Donaldson
View bio | Read blog

As the use of target-date funds in retirement plans increases, some investment managers have begun using alternative investments as a supplement to TDFs' traditional asset classes. But do these alternatives provide long-term benefits?

In a new Vanguard commentary, Assessing the inclusion of alternatives in target-date funds, authors Chris Tidmore, Scott J. Donaldson, Daniel B. Berkowitz, and Daren R. Roberts evaluate the impact of two strategies: a REIT overweight and a commodities allocation. The authors say that plan sponsors must address whether alternative investments can deliver a long-term benefit that justifies the potential trade-offs.

Read PDF