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Zacks Lifecycle Indexes

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Zacks Lifecycle Indexes are benchmarks developed by US-based financial services company Zacks Investment Research and provide a gauge to measure the relative performance of target date funds (TDFs). TDFs are pooled investments designed to provide long-term savings goals for retirement and other financial objectives. Zacks Lifecycle Indexes track the performance of TDFs compared to benchmarks composed of domestic equity and bond holdings, providing investors an indication of which TDFs are performing most favorably.

The Zacks Lifecycle Indexes have several indexes, each with a corresponding date - the terminal date of a TDF - typically in 10-year increments. As an example, the first index in the series, Zacks Lifecycle 2010, would contain investments and strategies specifically designed for people planning to retire in the year 2010. As the terminal dates get further apart - 2020, 2030, and so on - the allocations within the index continue to become more conservative as the retirement date gets closer. The indexes provide investors with a basis for comparison when evaluating different TDFs, allowing them to gauge the projected performance of multiple funds over time.

It should be noted that while Zacks Lifecycle Indexes can provide a useful benchmark when comparing TDFs, investors should proceed with caution and supplement their investments with strategies through the use of individual stocks and bonds. The Zacks Lifecycle Indexes are not meant to be a stand-alone investment vehicle, but rather a comparative tool for evaluating TDFs. Additionally, the indexes are regularly rebalanced and may not accurately reflect or apply to a specific fund’s performance over the long-term.

Overall, Zacks Lifecycle Indexes can provide investors with a useful comparative tool to measure the relative performance of many target-date funds. By comparing funds with their corresponding Zacks Lifecycle Index, investors can make educated decisions on which funds will provide them with the most suitable retirement vehicle for their individual financial goals.

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