@article {Carson66, author = {Bill Carson and Sara Shores and Nicholas Nefouse}, title = {Life-Cycle Investing and Smart Beta Strategies}, volume = {5}, number = {2}, pages = {66--82}, year = {2017}, doi = {10.3905/jor.2017.5.2.066}, publisher = {Institutional Investor Journals Umbrella}, abstract = {In traditional life-cycle models, the equity-bond glide path shifts investment allocation from riskier assets to relatively safer assets as investors approach retirement. In this article, we develop a smart beta glide path that seeks to take advantage of broad, persistent patterns within asset classes to identify securities with higher risk-adjusted returns than the market. Within equities, investors can shift from return-enhancing strategies{\textemdash}like value, momentum, size, and quality{\textemdash}to risk-reducing strategies like minimum volatility as they move through the life cycle. Adopting smart beta glide paths may improve Sharpe ratios by up to 20\% over a standard equity-bond glide path.TOPICS: Retirement, analysis of individual factors/risk premia, portfolio construction}, issn = {2326-6899}, URL = {https://jor.pm-research.com/content/5/2/66}, eprint = {https://jor.pm-research.com/content/5/2/66.full.pdf}, journal = {The Journal of Retirement} }