Dec. 4, 2020
Target-date funds are designed to give investors a diversified portfolio that automatically rebalances over time, as a goal like retirement or college approaches. The funds are increasingly popular, particularly in 401(k) accounts and among younger investors. But a new academic paper, released in October but as yet unpublished, points a finger at the fees that target-date fund investors pay, which, the researchers calculate, total an average of one-third of a percentage point annually.