Move your mouse over any age on the chart below to view financial figures.

Managing the fund’s glide path up to and through retirement. The glide path is how the asset allocation or investment strategy of a target date fund evolves over time. Typically, the equity allocation declines as the fund approaches the target date. Younger investors in funds with distant target dates will have more equities than older investors with nearby target dates. However, most target maturity funds will often blindly decrease equity exposure based on traditional assumptions about risk and return, failing to account for the investor’s true liabilities.

The construction of the Longevity Funds glide path is based on a dynamic asset allocation approach adjusting for the appreciation of investments up to retirement and the preservation phase after retirement.

Proprietary Algorithm…Innovative Ideas
First, using our proprietary asset class blending algorithm, we adjust our focus from capital appreciation to capital preservation along the glide path. Second, to account for ever-rising health care and other costs, we use a Consumer Price Index developed especially for seniors, called the Elder CPI.

Appreciation versus Preservation…Balanced Management
Payden/Wilshire Funds sustain a delicate balance between capital appreciation and capital preservation – up to and through retirement. Using Dynamic Life Expectancy tables helps adjust that delicate balance of appreciation and preservation. Research has clearly proven the wisdom of this strategy.

Defining Risks beyond the Target Date…Independent Thinking
Funds that descend too quickly into fixed-income create a potential funding shortfall in retirement. Such an approach discounts the impact of the investor’s triad of foes – inflation risk, longevity risk and liquidity risk. For a complete description of these triad of foes, link to our Retirement Risks section.