Products September 25, 2008

S&P Announces Target-Date, Target-Risk Fund Indexes

Standard&Poor’s launched the S&P Target Date Index Series to bring greater transparency and performance measurement to the growing target-date fund market.
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The index series uses asset class selection and weighting driven by a survey of target-date products available in the market, according to the release.

The series includes:

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  • The S&P Target Date Retirement Income Index,
  • The S&P Target Date 2010 Index,
  • The S&P Target Date 2015 Index,
  • The S&P Target Date 2020 Index,
  • The S&P Target Date 2025 Index,
  • The S&P Target Date 2030 Index,
  • The S&P Target Date 2035 Index,
  • The S&P Target Date 2040 Index, and
  • The S&P Target Date 2045+ Index.

Standard & Poor’s also launched a companion Target Risk Index Series. To offer efficient, risk-sensitive exposure to multiple asset classes, S&P said first, asset class exposure bounds are derived through a survey of available target risk funds, then a shortfall, or downside, risk control framework is employed to arrive at asset class weights.

The Target Risk Index Series includes:

  • The S&P Target Risk Conservative Index,
  • The S&P Target Risk Moderate Index,
  • The S&P Target Risk Growth Index, and
  • The S&P Target Risk Aggressive Index.

Asset classes within both Index Series are passively represented through registered, index-linked exchange-traded funds (ETFs), according to the announcement. For pure index based benchmarking, a gross return series representing returns without ETF management fees is also available.

A white paper on target-date funds published by Standard & Poor’s can be accessed at www.standardandpoors.com/indices by clicking on Research.

The PLANSPONSORLifestyle Funds Buyer’s Guide is available here.

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