Fundsters interested in the ins and outs of target date funds' investments (or in the PR fight they've been in for the past year or so) may want to take a look at a new article in 
Bloomberg. Margaret Collins and Jeff Plungis 
report that six of the nine biggest target date fund families use junk (i.e. high-yield corporate) bonds inside their 2010 funds: 
American Funds, 
Fidelity, 
John Hancock, 
Principal, 
T. Rowe Price and 
TIAA-CREF. (According to 
ING, 
Vanguard and 
Wells Fargo do not use junk bonds in their 2010 or 2015 funds.)
Laura Pavlenko Lutton, editorial director in 
Morningstar's mutual fund research group, tells Bloomberg of the risks of using junk bonds in target date funds, and target date fund disclosure champion Senator 
Herb Kohl (D-Wisconsin) also attacks the practice. 
Hancock's 
Bob Boyda (senior vice president, investment management services), T. Rowe's 
Ned Notzon (chairman of its asset allocation committee) and Fidelity's 
Jonathan Shelon (manager of the 
Freedom Funds) all defend their use of junk bonds, while 
James Lauder (CEO of 
Global Index Advisors and co-portfolio manager of Wells Fargo's target date offerings) defends his avoidance of junk bonds. Several advisors also weigh in. 
 Edited by: 
         Neil Anderson, Managing Editor
       
       
       
    
		
		Stay ahead of the news ... Sign up for our email alerts now
       
       
       Edited by: 
         Neil Anderson, Managing Editor
       
       
       
    
		
		Stay ahead of the news ... Sign up for our email alerts now
		CLICK HERE