According to a study by Ibbotson, a 65 year old investor in a Fidelity target fund would have had about 30% in equities in 2001.
The Vanguard 2005 Target Retirement fund has, we were told, a 47% allocation to equities.
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Owning a retirement target date fund could throw off a balanced approach to your investments.
Believing that if one target date fund is good, thinking that investing in two or more would be better.
Structuring systematic withdrawals from a target date fund can be a straightforward strategy for creating retirement income for some investors.
If someone needs access to quick cash, a target date fund set for a 2025 is not place to stash their savings.
By 2016, 55% of 401(k) participants will have their whole retirement accounts invested in a single target date fund, up from 24% last year.
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That is the most conservative target retirement fund Vanguard offers. (Vanguard does, however, offer an income fund that invests 30% in equities.) Did we hear that right, we asked?
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During the first eight months of this year American Century's Target 2025 Fund returned a scorching 28%, making it one of the best-performing bond funds available to individual investors.
Because a bucket strategy redistributes funds among buckets rather than rebalancing, it shifts the overall portfolio to a traditionally less risky allocation compared to that in a target date fund.
Table 3 shows that a bucket strategy may perform better with a lower cash target, but it also shows that a systematic withdrawal from a target date fund could perform even better.
For example, a 45-49 year old might choose the Target Retirement 2030 Fund which has 79% in equities.
The family has said all the money raised above the initial target will help fund aftercare for Alexander and help other children affected by cancer.
The average 2015 target-date fund allocated roughly 40% to stocks at the end of 2012, down nine percentage points from the end of 2008, according to Lipper.
For savers still playing catch-up, one strategy is to switch to a target-date fund with a later date and greater exposure to riskier assets that can generate bigger returns.
The company suggests investing in its Target Retirement 2030 Fund, which incorporates five different Vanguard funds in a mix designed to become less risky over time, so that it's more stable at the time you reach retirement age.
Investors willing to take additional risk might also consider leaving their current 401(k) savings in a target-date fund, but direct all new contributions into a domestic equity fund or international stock fund to boost returns, says Michael Francis, president of Francis Investment Counsel, a consulting firm specializing in retirement plans.
This fund would target only small community and neighborhood banks, and it would help these institutions increase lending to small businesses.
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The AmSouth Small Cap Growth Fund, with a 5.5% load and 1.6% expense ratio, has beaten the Target Small Capitalization Growth Fund, which is a no-load and charges 1%.
The war chest has become a target for activist hedge fund manager David Einhorn, whose Greenlight Capital owns a slug of Apple shares and has pushed the company to issue preferred shares with a fatter yield than the 2.5% on its common stock.
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Even the trust fund is a target of "gangsters, " he said.
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The fund's target is to have 51% of its portfolio in alternative assets such as private equity, real estate and infrastructure and the rest in public securities, according to CIC officials.
Fund companies that manage target-date funds assume that young people will pick a faraway date where the allocation to equity is always very high.
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The two Wisdom Tree products the WisdomTree U.S. Dividend Growth Fund and the WisdomTree U.S. Small Cap Dividend Growth Fund attempt to target sustainable dividend streams as opposed to firms with temporarily high dividend yields.
Another solution Vanguard and other mutual fund companies offer to retirement plans is target retirement funds.
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The wife of a Sit fund manager used to work for competitor Target.
To determine whether the fund is a worthwhile investment, look at the fund's performance compared to its target index, Lowlicht says.
The fund recently reorganized to pursue this expanded target.
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They planned to spurn large buyout funds, in particular, and instead look to invest with GPs that target a specific sector, geography, deal stage or fund type.
The expectation that an index fund will get EXACTLY the return of the target index sets the stage for an interesting problem: Zero tracking error is achievable, but it comes at a very high price.
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