Subject: File No. S7-12-10
From: Mark S Yamada
Affiliation: President CEO, PUR Investing Inc.

August 4, 2010

Transparency allows investors to make informed decisions and should be encouraged. However target date funds (TDFs), while popular and pervasive, are still in the development phase of their existence so insisting that predetermined asset mix glide paths be disclosed provides an inflexible hurdle for product improvement. One challenge for early generation TDFs is the assumption that volatility relationships between asset classes remains consistent over time. 1998-2001 and 2008-2009 proved that they are not. The risk associated with each asset class changes over time and a case could be made that interconnected capital markets and banking systems has heightened the potential for systemic risk in the future. Requiring TDFs to adhere to a predetermined asset mix glide path would be a disservice to investors. Encouraging an improvement in TDFs is not only a commercial goal but should also be enabled by any regulatory environment or at the very least, not undermined by it.

Perhaps an alternative to posting predetermined asset mixes could be the posting of the risk represented by those stated asset mixes and, perhaps of more value to the investor, a statement about whether a TDF is designed to mature in cash at the target date or something other than cash. This would allow for different risk trajectories and accommodate product innovation while providing better information than is currently readily available.


Mark Yamada
President CEO
PUR Investing Inc.