The Markets March 8, 2012

Target-Date Funds Lag Benchmarks

The latest S&P Target Date Scorecard indicates that further-dated target-date funds are continuing to generally have lower cross-sectional ranges of equity exposure than closer-dated funds, through not by large margins.
Reported by

This is consistent with past observations, and is evidence of a variety of philosophies surrounding the appropriate level of equity risk—particularly as target dates approach.

According to the report, in the one- and five-year periods ending December 31, 2011, the average returns of further-dated target-date funds generally lagged the benchmarks.

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For example, S&P data showed 80.8% of target-date 2010 funds were outperformed by the S&P benchmark over a one-year period. However, 85.7%, 84.6% and 89.0%, respectively, of target-date 2035, 2040 and 2040+ funds were outperformed by the S&P benchmark.

On average, target-date 2010 funds saw a one-year return of 1.30%, while the S&P benchmark had a one-year return of 2.87%. For target-date 2035 funds, the return was -3.12%, compared with the benchmark return of -1.46%. For 2040 funds, the returns were -3.45% and 1.93%, respectively.

This was primarily because as the markets turned around in March 2009, active funds were overweight with equities relative to the S&P Target Date Index. Asset-weighted average returns for the funds in each category were somewhat higher than equal-weighted returns, indicating that the larger target-date funds earned somewhat higher returns compared with their smaller counterparts.

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Diversions March 8, 2012

Asleep at the Wheel

Pilots and train operators are more likely to report sleep-related job performance and safety problems, according to a poll.  
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The National Sleep Foundation’s (NSF) 2012 Sleep in America poll found that 26% of train operators and 23% of pilots say sleepiness has affected their job performance at least once a week. This is compared with 17% of non-transportation workers.

What’s more alarming is the percent of transportation workers who admit sleepiness has caused safety issues. Twenty percent of pilots say they have made a serious error because of sleepiness, and 18% of train operators and 14% of truck drivers say they have had a “near miss” due to sleepiness.  

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Pilots and train operators are more likely (6% each) than non-transportation workers (1%) to have a car accident during their commute because of sleepiness.

Pilots and train operators also report the most work day sleep dissatisfaction—50% of pilots and 57% of train operators say they rarely or never get a good night’s sleep during work nights. Twenty-nine percent of bus, taxi and limo drivers feel the same. What’s worse is pilots and train operators have the highest average commute time of 45.5 minutes and 31 minutes, compared with a 23.8-minute average for non-transportation workers.

Many transportation workers say their work schedules are a major reason for sleep problems. Forty-four percent of train operators and 37% of pilots say their work schedules do not allow enough time for sleep.

Transportation workers aren’t the only ones who say sleepiness affects them. About one in 10 Americans say they are likely to fall asleep during meetings or while driving.

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