RT Journal Article
SR Electronic
T1 Assessing Shortfall Risk in Life-Cycle Investment Funds
JF The Journal of Wealth Management
FD Institutional Investor Journals
SP 15
OP 19
DO 10.3905/jwm.2008.706261
VO 11
IS 1
A1 Nigel D. Lewis
YR 2008
UL https://pm-research.com/content/11/1/15.abstract
AB The author assesses the shortfall risk of life-cycle investment funds. Since products offered by competing providers have differing risk-return characteristics, he uses a probabilistic measure of shortfall risk. The results indicate that risk-averse investors should not necessarily choose life-cycle investment funds with the lowest allocation to equities. A low rate of saving and/or a high minimally acceptable level of retirement income can make aggressive life-cycle equity allocation optimal. The approach outlined in this article will prove useful to financial planers, investors, portfolio managers, and policy makers in assessing the risk and return characteristics of competing life-cycle investment products.TOPICS: Retirement, portfolio construction, risk management