Transamerica Retirement Solutions has announced the results of a year-long analysis on the effectiveness of custom, target-date investment structures for participants in employer-sponsored retirement plans. The analysis focused on participants' personalized rates of investment return versus their investment risk, and examined the actual account performance for more than 1 million plan participants during the course of 2012.
The analysis compared participants using Transamerica's PortfolioXpress automated target date investment service to participants who rely on "do-it-yourself" investment strategies. The study found strong evidence that participants using the PortfolioXpress target date service generally experienced comparable or higher investment returns with less risk compared with participants who invested on their own. Median annual investment returns for PortfolioXpress participants were 14.8%, compared with 10.1% for do-it-yourself participants. In addition, do-it-yourself participants were approximately eight times more likely to experience negative or low annual investment returns (at or below 5%) compared with PortfolioXpress participants.
