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Conflicts of Interest in Target-Date Funds Catch SEC’s Eye

Conflicts of Interest in Target-Date Funds Catch SEC’s Eye

Financial Times

Chief among the questions regulators will be asking about target-date funds is whether they deliver good investor outcomes. William Beggs, assistant professor of finance at the University of San Diego School of Business, says that the use of in-house funds as underlying investments can compromise performance, pointing out that target-funds providers who fill their target-date funds with their own investment strategies have little incentive to fire the underlying manager if returns tail off.

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