A Dynamic Asset Allocation Approach for Selecting a 401K QDIA

9 Pages Posted: 20 May 2015 Last revised: 14 Feb 2021

Date Written: May 15, 2014

Abstract

The selection of the asset allocation and target date mutual funds that are used as qualified default investment alternative (QDIA) options for 401k participants are driven today by strategic asset allocation, risk and target retirement start dates. This paper details a dynamic asset allocation approach to be used for selecting a QDIA which uses forward looking return assumptions and the Sharpe Ratio for selection.

Keywords: Asset Allocation, Quantitative, hedge, dynamic asset allocation, QDIA, sharpe, qualified default investment alternative

JEL Classification: COO, CIO, CO, GOO, Gil

Suggested Citation

Grennon, Terry, A Dynamic Asset Allocation Approach for Selecting a 401K QDIA (May 15, 2014). Available at SSRN: https://ssrn.com/abstract=2437462 or http://dx.doi.org/10.2139/ssrn.2437462

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