Target-Date Funds Face Major Market Test

Posted on March 16th, 2020 at 1:13 PM
Target-Date Funds Face Major Market Test

From the Desk of Jim Eccleston at Eccleston Law LLC:

The market correction last week caused target-date funds to drop, resulting in up to 10% negative returns. However, market commentators argue that performance is far better than what happened to target-date funds in 2008. Funds last week saw just a 30% decrease in negative returns compared to 2008.

Target-date funds have done better because managers have safeguarded target-date funds to better control risk. Some adjust stock allocation proportionately with fixed incomes, or change their glide paths altogether.

Wells Fargo and Fidelity Investments are among two companies that have adjusted their strategies for managing target-date funds during market corrections since 2008. Wells Fargo has made modifications to lower risk in the glide paths. Other companies, like Fidelity Investments, have taken similar measures to better protect target-date funds in market drops.

Despite inevitable negative returns that come with market corrections, the outcome last week shows that those changes have helped companies better manage target-date funds in today’s volatile markets.

The attorneys of Eccleston Law LLC represent investors and advisors nationwide in securities and employment matters. The securities lawyers at Eccleston Law also practice a variety of other areas of practice for financial investors and advisors including Securities FraudCompliance ProtectionBreach of Fiduciary DutyFINRA Matters, and much more. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services. If you are in need of legal services, contact us to schedule a one-on-one consultation today.

Related Attorneys: James J. Eccleston

Tags: james eccleston, eccleston law, eccleston law llc, eccleston, market, stock market, wells fargo, fidelity

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