A securities-based lifecycle program reduces plan sponsor exposure to lawsuits because it complies with the new Pension Protection Act regulations at the highest levels, according to Zacks.
The company says the lifecycle funds have no conflicts-of-interest or fee layering from sub-sector exchange-traded funds or proprietary mutual funds.
The series includes the following indexes:
- Zacks 2040 Lifecycle Index
- Zacks 2030 Lifecycle Index
- Zacks 2020 Lifecycle Index
- Zacks 2010 Lifecycle Index
- Zacks At Target Lifecycle Index
“The industry average allocation to equities in 2010 funds is 52%. That may be the right answer for a Monte Carlo simulation but the wrong one for investors with three years to go before they fund a retirement annuity, a vacation home, education, a wedding, or long-term medical care,” said Michael Case Smith of Zacks Index and Allocation Group, in a press release. “As target dates near, people care more about return of capital than return on capital, regardless of what computer models say.”
The indexes are being used in a partnership between Amerivest Investment Management, LLC and XShares Advisors LLC for their exchange-traded fund lifecycle portfolios: TDAX Funds, Inc. (See Amerivest, XShares Launch Lifecycle ETFs).