Subject: File No. S7-12-10
From: Anup K Basu, Ph.D.
Affiliation: Senior Lecturer of Finance, Queensland University of Technology

May 13, 2014

With target date or lifecycle funds being accorded QDIA status, an important debate has been occurring on the design of the glide path of these funds. I have published several studies (refrenced below) in this area in well-known academic and practioner journals. Our findings clearly suggest that target date funds, which uses a glide path based solely based on age, may not be the most appropriate investment choice for many investors. Any advertsement of target date funds should certainly incorporate a statement to this effect.

Published Studies (Copies can be provided on Request)
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1 Basu, A., E. Chen, and A. Clements, 2014, Are Lifecycle Funds Appropriate as Default Options in Participant Directed Plans? Economics Letters, 124(1), 51-54.

2 Basu, A., Doran, B., and M. Drew, 2013, Are Target Date Funds the Easy Bake Option?, Journal of Financial Services Marketing, 18, 199-206.

3 Basu, A., A. Byrne, and M. Drew, 2011, Dynamic Lifecycle Strategies for Target Date Retirement Funds, 2011, Journal of Portfolio Management, 37(2), 83-96.

4 Basu, A. and M. Drew, 2009, Portfolio Size Effect in Retirement Accounts: What Does It Imply for Lifecycle Asset Allocation Funds, Journal of Portfolio Management, 35(3), 61-72.