6.18.2009 SEC Chairman Mary Schapiro spoke about target date mutual funds at a hearing sponsored jointly by the SEC and the Department of Labor. She stated that investors are drawn to them because of the “set it and forget it” approach that the funds have taken, which is based on the funds’ automatic shift to conservative investments as the “target” date approaches. Although the Chairman conceded that the funds were expected to make investing easier for “typical Americans,” the Chairman stated that losses of almost 25% in 2008 among 31 funds with a 2010 start date and returns of 2010 target date funds in 2008 of minus 3.6% to minus 41% has left investors “surprised.” The Chairman advised that based on these results, regulatory changes, industry reforms and other revisions should be considered.
Click http://www.sec.gov/news/speech/2009/spch061809mls.htm to access Chairman Schapiro’s full remarks at the hearing.
Click http://www.ici.org/pressroom/news/09_news_target_fund to access a press release issued by the Investment Company Institute on the Target Date Funds hearing.