Managed accounts have their place for some 401(k) investors, but no one should expect them to eclipse the role target-date funds play as the primary qualified default investment alternative in defined contribution plans, according to recent analysis by Cerulli Associates.
The conclusion comes as more critics of TDFs have emerged over the past two years.
Some have argued, too, TDFs' many glide paths carry too much equity risk as retirement nears. Others say they lack the ability to tailor specific strategies for investors that may have different levels of risk tolerance, or needed returns.
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