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Personal finance. A target date fund (TDF), also known as a lifecycle fund, dynamic-risk fund, or age-based fund, is a collective investment scheme, often a mutual fund or a collective trust fund, designed to provide a simple investment solution through a portfolio whose asset allocation mix becomes more conservative as the target date (usually ...
How a target date fund invests Typically a target date fund is a “fund of funds” – meaning its portfolio is made up of both stock funds and bond funds selected by the manager.
Target-date funds focus on retirement savings with a straightforward approach that offers less personalization than robo-advisors.
1. Target-Date Funds Target-date funds are relatively low-cost, professionally managed investment vehicles designed to align with an individual’s expected retirement date.
Five are individual funds (one dealing with government bonds and the other four tracking specific market indices) while the other ten are target date funds (referred to as "Lifecycle" or "L" Funds) designed to professionally change the allocation mix of investments among the individual funds during various stages of the employee's federal ...
The average 2010 target fund, for instance, lost 22% in 2008 while the average target-date funds for 2036 through 2040 lost 39%, according to Morningstar.
Index fund. An index fund (also index tracker) is a mutual fund or exchange-traded fund (ETF) designed to follow certain preset rules so that it can replicate the performance ("track") of a specified basket of underlying investments. [1] While index providers often emphasize that they are for-profit organizations, index providers have the ...
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