Vanguard's Strategic Asset Allocation Committee has approved a novel framework for consistently assessing glide-path changes across Vanguard's U.S. TDF suite. The framework takes into consideration many qualitative and quantitative metrics. Two considerations particularly relevant to TDF investors are the "certainty fee equivalents"—essentially an estimated annual risk-adjusted return differential between the current and alternative glide paths—and the probability of success. Together, these factors provide relative and client-centric benchmarks.
The committee's memo, A Systematic Framework for Validating TDF Glide Paths, summarizes its recent discussions about TDF glide paths based on work done by Vanguard Investment Strategy Group.