A New Retirement Bond

" [... ] Most retirement investors seek both income and capital preservation, says Lionel Martellini, director of EDHEC Business School and its Risk Institute, but current asset classes and products are giving these investors too little of either. Martellini, along with Nobel laureate Robert C. Merton and Arun Muralidhar, an associate professor of finance at George Washington University, proposes “retirement bonds” that would help investors replicate income and replace part or all of their traditional bond portfolios as a solution. The researchers believe that current retirement products like target-date products, balanced funds and annuities do not fit the actual needs of individuals, and that asset managers should take a more objective or goals-based approach to creating retirement investments. Accordingly, they are attempting to take the best attributes of these vehicles and meld them into a new security. [... ]"