Standard & Poor's, the world's leading index provider and publisher of the widely followed Standard & Poor's Index Versus Active Fund scorecard series, has launched the industry's first comprehensive, periodic scorecard for target-date mutual funds. The S&P Indices Target-Date Scorecard provides performance comparisons, equal- and asset-weighted peer averages, and volatility comparisons for U.S. target-date funds versus their relative S&P Target-Date Index.
The S&P Target-Date Index Series is comprised of nine multi-asset class indices: U.S. large cap, U.S. mid cap, U.S. small cap, international equities, emerging markets, U.S. REITs, core fixed income, short term treasuries, and TIPS.
The scorecard will be published semi-annually, with a four- to six-week lag following year-end and the first six months of the year. The underlying data is obtained from the Lipper U.S. Fund Database.
The scorecard shows that asset class exposure varies significantly among target-date funds, which play out in the variance of fund returns. For example, 3-year annualized returns for funds in the 2015 category ranged from -6.8% to 2.6%, with the comparable benchmark returning 1.37% per year.
Data through Dec. 31, 2010 also reveals that in the 1-, 3- and 5-year periods, the average returns of further dated target-date funds generally lagged their relative S&P target-date benchmark. The picture, according to the scorecard, is more mixed for closer-dated funds. Additionally, asset-weighted average returns for target-date funds in each peer group tend to be somewhat higher than equal-weighted returns, indicating that the larger target-date funds performed somewhat better than their smaller counterparts.
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