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Analyzing Mutual Funds with Various Target Dates for Retirees [F-17-5]

The mutual fund industry has been a bellwether in managing retirement wealth. However, the mutual fund industry has also attracted a lot of scrutiny due to expropriation of investors’ trust as they have allowed preferential treatment for regarding market timing for certain investors. In our research, we investigate the performance of mutual funds that have a specific target date for retirees. According to various performance benchmarks, we find that the fund returns for a later target date under-perform more often than those that have an earlier target date. Analyzing this poorer performance, we find that later target date funds carry more illiquid assets (those you can’t take right away) resulting in a poor performance. The fund size doesn’t have a significant effect. The results of our analysis indicate that while some excess returns have been generated, this is possible only due to lower marketing and distribution costs and management fees.

Brian Harte teaches in SUNY Canton’s Criminal Justice program and Umesh Kumar teaches in the Finance program. Together, they have won four awards for their business-related research and publications. Three of their awards have been from the Academy of Business Research, an international society of scholars and practitioners who exchange ideas and collaborate in a conference setting.

Cap: 40