Standard & Poors today launched the S&P Target Date Index Series, comprising nine multiasset-class indexes each corresponding to a target retirement date.
S&P said in a news release that the indexes will bring greater transparency and performance measurement to the target-date fund market.
The target-date fund market is growing rapidly because of greater adoption within defined contribution plans and investors desire for one-stop retirement solution shopping, Srikant Dash, head of research and design at S&Ps Index Services, said in the release. However, differing asset class choices and exposures across the universe have created difficulty in benchmarking performance.
The new S&P index series extends traditional indexing to target-date funds by establishing a mathematical way to define the consensus market price for each of the years. The weighting of the indexes is determined by surveying target-date products that are available on the market.
S&P also launched a companion Target Risk Index Series, comprising four multiasset-class indexes corresponding to levels of risk: conservative, moderate, growth and aggressive.