Dow Jones Indexes Announces Target Date Additions

According to a press release, the Dow Jones U.S. Target Date 2055 and the Dow Jones Global Target Date 2055 Indexes were launched to “complement and continue the existing index series to enable market participants to use the indexes to help measure the performance of their ‘lifecycle’ portfolios as they prepare for retirement.”

The Dow Jones Target Date index series consists of the global Dow Jones Target Date, the Dow Jones U.S. Target Date, and the Dow Jones Real Return Target Date indexes. All of them are designed to serve as benchmarks for lifecycle portfolios that start out aggressively to grow assets and end with a conservative mix of investments based on the portfolio’s “target date,” according to the firm. These “target dates” are set at five-year intervals out to 40 years.

The global and U.S. versions of the Dow Jones Target Date Indexes allocate among stocks, bonds, and cash on a monthly basis to hit predefined relative risk levels. According to the announcement, over the life of each index, its relative risk ranges from 90% of the risk of the global equity market at its most aggressive point, to 20% of the global equity markets risk at its most conservative point—when the index reaches its target.