Economics Mutual Funds Questions
A target-date fund is a type of mutual fund that is designed to automatically adjust its asset allocation over time based on the investor's target retirement date. The fund starts with a more aggressive allocation of stocks and gradually shifts towards a more conservative allocation of bonds and cash as the target date approaches. This type of fund is commonly used for retirement savings as it provides a convenient and simplified investment option for individuals who want a diversified portfolio that automatically adjusts based on their time horizon.