Method of evaluating the performance of a family of target date funds

摘要

A method of evaluating the performance of a family of target date funds. A model of the family is constructed using realized rates of return ("returns") for an evaluation period for each of the funds. The returns for each fund are assigned to the periods of the model corresponding to the periods during which the return was realized by the fund. An estimate of the wealth generated by the family may be determined as a function of the returns assigned to the model and a pattern of contributions. A benchmark portfolio may be selected and used to construct a model of the benchmark portfolio having the same number of periods as the model of the family. The model of the benchmark and the pattern of contributions may be used to determine wealth generated by the benchmark portfolio, which may be compared to the estimate of wealth generated by the family.