what are zacks lifecycle indices 
zacks lifecycle indices are a series of indexes developed by zacks investment research inc that provide a benchmark for the lifecycle allocation of various target date funds with a different index for each target date understanding zacks lifecycle indiceszacks lifecycle indices provide comparative benchmarks for lifecycle or target date funds that have become popular with investors saving for retirement especially those without the knowledge or interest to be actively involved in the management of their investments as the target date approaches the asset allocation or glide path gradually becomes more conservative zacks a provider of proprietary research on securities and packaged investments launched its lifecycle indexes in 2007 it uses proprietary selection rules to identify stocks and bonds with risk return profiles consistent with general market benchmarks at launch the five zacks indices consisted of different combinations of u s stocks international developed markets stocks and u s bonds for funds with target dates of at retirement as well as 2010 2020 2030 and 2040 example the zacks 2040 lifecyle indexthe zacks 2040 lifecycle index ticker tdaxfo is designed for investors expecting to retire in 2040 according to zack s website the objective of the index is to select a diversified group of stocks bonds and complementary securities with the potential to outperform on a risk adjusted basis general market benchmarks 1 the index constituent selection methodology utilizes multi factor proprietary selection rules to determine the optimal mix of domestic stocks international stocks and fixed income securities in the overall allocation and to identify those securities that offer the greatest potential from a risk return perspective the approach is specifically designed to enhance investment applications and investability the index is adjusted annually or as required to assure timely stock selections motivation for zacks lifecycle indiceszacks created the lifecycle indexes to provide more in depth details on the risk and return characteristics of target date funds or tdfs educating shareholders in these funds about the high level of equity exposure and thus risk of principal loss at the target date was one of the primary motivations for the series most target date funds define their target as either to or through the probable retirement age of a fund shareholder either investing through that date or to that date as zacks explained in its launch most tdf glidepaths target actuarial life expectancies in other words most of these funds assume the shareholder will remain invested and need some combination of growth and conservation of capital during retirement and keep a portion of their allocation in higher risk equities zacks believed this setup created undue risk for investors with short term capital needs such as funding a college education or paying for medical expenses where losing a large portion of principal was unacceptable a tdf investing to a target date meanwhile would permanently shift to a conservative capital preservation based allocation at retirement consisting mostly of bonds and cash with the goal of generating income while protecting principal critics of these tdfs suggest that retirees expected to be in retirement for 20 to 30 years or more need the capital appreciation provided by equity exposure to prevent them from outliving their retirement savings another consideration is the differing glide paths followed by each provider of target date funds the fidelity freedom 2030 fund is expected to hold 53 equities 40 bonds and 7 cash at retirement in 2030 a more aggressive allocation than the t rowe price target 2030 fund which would hold 42 5 equities and 57 5 bonds 