Many people question whether target-date funds use the best glide paths for people nearing retirement.

Matt Brancato doesn't buy it. In his most recent blog, Vanguard's Target Retirement Fund product manager talked about industry research that has shed doubt on target-date funds by pointing out that equities have delivered a higher rate of return than bonds over time. And that given perfect foresight, allocating to asset classes with higher returns is more advantageous than allocating to asset classes with lower returns.

He said that while the arguments against current TDF investment strategies seem valid, they don't take into account the behavior and objectives of most investors. Many investors don't want to take on the headache of market volatility, particularly as they accumulate more assets. Because of this, it is important to consider volatility throughout the investing time horizon and not just at an end point, Brancato said.