Mass. Secretary of State launches sweep of target-date fund offerings

1 min read

By Ross Kerber

BOSTON -Massachusetts Secretary of State William Galvin on Tuesday said his office will investigate broker-dealers offering target-date funds, concerned about changes that created large tax bills for small-dollar investors.

In a press release Galvin said his securities division sent letters seeking information from companies including BlackRock Inc,, T. Rowe Price Group, a unit of Vanguard Group and others.

Representatives for the companies did not immediately comment.

Target-date mutual funds have become an increasing popular vehicle for retirement savings, typically set up to reduced the amount of risk among assets held by investors as they age. U.S. target-date funds held nearly $1.6 trillion as of 2020, up from $1.4 trillion in 2019 and $1.1 trillion in 2018, according to the Investment Company Institute, largely in retirement plans like 401(k)s.

According to the press release Galvin “is particularly concerned by reports of inadequately disclosed fund changes that shifted financial burdens to small-dollar investors, resulting in large tax bills for those who held the funds in non-retirement accounts.”

Galvin was not immediately available for further comment.

(Reporting by Ross Kerber; Editing by David Gregorio)