Inflation assets by themselves can be a “wildly uncomfortable portfolio at times,” but investors should buy them when they’re cheap, as is currently the case, Arnott said.
Another problem with target-date funds is that, as a group, they are overpriced, he said, averaging 114 basis points in fees exclusive of the lower-cost Vanguard products.
“Forget the one-stop shopping,” he said, and look for more inflation diversifiers and tactical strategies that are sensibly priced.
“There are a lot of [investment] opportunies out there,” Arnott said, “but not the assets that target-date funds are in now.”