Transparency Is Our Policy Learn How It Impacts Everything We Do
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
Wed like to share more about how we work and what drives our day-to-day business.
How We Approach Editorial Content
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investors point of view. We also respect individual opinionsthey represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.
How We Make Money
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.
Don’t Miss: Kaiser Permanente 401k Retirement Plan Vanguard
How We Use Your Personal Data
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
- Verify your identity, personalize the content you receive, or create and administer your account.
- Provide specific products and services to you, such as portfolio management or data aggregation.
- Develop and improve features of our offerings.
- Gear advertisements and other marketing efforts towards your interests.
To learn more about how we handle and protect your data, visit our privacy center.
The Trouble With Target Funds
This story appears in the June 23, 2013 issue of Forbes.
Note: I have updated this story with the addendum at the end.
Whoever invented target retirement funds, the portfolios that automatically turn more conservative as you age, must be some kind of marketing genius. There are 2,019 of these things on Morningstar, if you count all the share classes. The category has swallowed 13% of 401 dollars.
Whoever is buying the funds would not be at the genius level. They have not figured out that they are getting ripped off.
The sales pitch goes like this: When you are young, you can withstand a lot of investment risk and your portfolio should have a high dose of stocks. When you are old, you should have half or more of your savings in bonds. So the fund sets your portfolio on a 40-year “glide path.”
The image conjured up: In your bold youth you soar to the heights. As you turn 67 you coast into a worry-free retirement where, to judge from the photos used in ads, the main activity is fishing with your grandson.
The problem with target funds is that they carry stiff expense burdens. Let’s illustrate this by picking on BlackRock, whose LifePath 2040, intended for a saver who is now 40 or so, is typical of the genre. The prospectus discloses that your projected ten-year expense bill totes to $2,478 per $10,000 invested.
Addendum: BlackRock notes that it offers low-cost target funds as well. Its LifePath Index 2040 has an expense ratio of 22 basis points.
Also Check: Affordable Retirement Communities In Virginia