The outputs of a hypothetical model based on historical net asset values for balanced funds and target-date funds show just how complicated it can be to compare the relative merits of the two approaches to asset allocation. As it turns out, balanced funds, though less popular, might deserve another look.
The research paper not only illustrates potential return characteristics and diversification benefits, but also offers allocation strategies to guide investment decision making.
A paper from Morningstar Investment Management lays out a framework for advisers and plan sponsors to determine the qualified default investment alternative (QDIA) that is the best fit for a plan's demographics.
