CFA Institute research finds private market allocations improve TDF returns
What happened
Researchers from the CFA Institute published a report titled Private Markets in Retirement Plans. The study found that Target Date Funds (TDFs) can achieve improved net risk-adjusted returns by making small allocations to private markets. The report noted that allocations to private equity and venture capital offer the greatest potential upside, while allocations to private debt, infrastructure, and real estate tend to reduce volatility.
From wealthmanagement.com
Why it matters
This research supports the growing trend of Defined Contribution (DC) plans incorporating private assets. The findings suggest that strategic private market integration can enhance the performance of retirement funds, especially as regulatory efforts, such as a proposed Department of Labor rule, facilitate this shift.
From wealthmanagement.com
Who's involved
- CFA InstituteConducted the research on Target Date Fund performance.
- AllianceBernsteinIncorporates TDF models into its partnership operations.
- Voya FinancialActively utilizes TDFs in partnerships as part of its operational strategy.
- DeloitteUtilizes TDF expertise when estimating private market growth.
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
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The entities involved
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Tdf
Nothing else this week.
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CFA Institute
American professional association
Nothing else this week.
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Voya Financial
rebranded Dutch financial organization
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AllianceBernstein
American asset management firm