Dow Jones Adds 2050 Funds to Target-Date Offerings

Dow Jones Indexes has added three funds to its target-date fund offerings, timed for those retiring around 2050.

A Dow Jones news release said the company launched the Dow Jones U.S. Target Date 2050, Dow Jones Global Target Date 2050, and Dow Jones Real Return 2050 indexes. The offerings include funds set at five-year intervals out to 40 years.

The global and U.S. versions of the Dow Jones Target Date Indexes allocate among stocks, bonds, and cash on a monthly basis to hit predefined relative risk levels. Over the life of each index, its relative risk ranges from 90% of the risk of the global equity market at its most aggressive point, to 20% of the global equity markets risk at its most conservative point—when the index reaches its target.

The Dow Jones Real Return Target Date Indexes allocate among stocks, bonds, TIPs, commodities, and real estate securities, the company said. These asset classes are weighted within each index to measure a targeted level of risk.

Over time the weights are adjusted based on predetermined formulas as the index’s target date approaches.

For example, the release said, the Dow Jones Real Return 2050 Index includes approximately 90% component allocation to the high-risk assets (equities, real estate, and commodities). When the index reaches its target date, the composition will have changed to about 70% in the low-risk component assets (bonds, U.S. TIPs).

The company also announced the Dow Jones Target 2005, Dow Jones U.S. Target 2005, and Dow Jones Real Return 2005 indexes will be decommissioned as each has reached five years past its target maturity date.

More information is available here