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Here’s How Target-Date Funds Have Taken Over Wall Street

TedTed
edited May 2018 in Fund Discussions
FYI: Over the past decade, target-date mutual funds have gotten bigger, cheaper and phenomenally popular.

The style of funds, which automatically become more conservative as they near a preset year — typically by reducing their exposure to equities in favor of bonds — have taken over Wall Street, emerging as one of the most popular choices for investors to use in their retirement accounts. Target-date funds are seen as ideal retirement holdings, as they are designed to be held for extremely long periods of time, and because they rebalance their holdings as the holder ages without the investor having to make timing decisions.
Regards,
Ted
https://www.marketwatch.com/story/heres-how-target-date-funds-have-taken-over-wall-street-2018-05-08/print

Comments

  • Derf
    Talk about getting tracked ! Try the link above & see if you get a CD,etc. rate in your area.
    Derf
  • AnnaAnna
    Nope, no CD adds. I got high yield savings accounts Internet type banks. Guess I have location tuned off right now. Maybe I'll turn it on and try to get a local CD summary.

    On topic - I have my husband's rollover in a Target 2015 and it has gotten too conservative. I have been thinking of switching to a 2025 or later target date if I keep it invested in one. Bonds stinking? Who woulda thought?
  • MikeMMikeM
    @Anna, if you happen to be dealing with TRP target date funds, they offer 2 options, but to me don't explain them well. They have for instance a 2020 "Target Date" fund that does change allocation as you get older. But they also have a "Retirement" fund that holds at it's allocation.

    Example:
    TRRBX 2020 retirement fund 37/20/40 US stock/Int stock/bonds
    TRRUX 2020 target date fund 28/15/52 US stock/Int stock/bonds
  • AnnaAnna
    MikeM said:

    @Anna, if you happen to be dealing with TRP target date funds, they offer 2 options, but to me don't explain them well. They have for instance a 2020 "Target Date" fund that does change allocation as you get older. But they also have a "Retirement" fund that holds at it's allocation.

    Example:
    TRRBX 2020 retirement fund 37/20/40 US stock/Int stock/bonds
    TRRUX 2020 target date fund 28/15/52 US stock/Int stock/bonds

    Right now he's at Vanguard. I'll look to see if they have comparable offers. Thanks.

  • Kaspa
    Derf said:

    Talk about getting tracked ! Try the link above & see if you get a CD,etc. rate in your area.
    Derf

    If in doubt, open any links, do any general browsing in incognito mode. This is especially useful if you are doing some research to support purchases, travel, etc. Airlines have dynamic pricing and many times prices will adapt if you continue to make the same searches. It won't stop your ISP from knowing your searches, but it will at least reduce exposure to many other tracking sites.

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