Track, Field & Target Funds:
3 Themes Ring True

Track, Field and Target Funds: Three Themes Ring True

Athletes across the globe have recently gathered to demonstrate their sporting expertise. To show our spirit, we’ve identified a few parallels between the time-honored games and the fundamentals of a popular investment choice—target funds.

1. Diverse skills and strengths

Like the lead and anchor in a relay, different investment types play a specific role. In your portfolio, stocks, bonds and money markets can react differently under various market conditions. Target funds spread your money across these types, potentially lowering your overall risk during market volatility.

2. Expert teamwork

Competitive sports bring together top notch teams and coaches focused on excellence in their sport. Often companies use a team-based approach to asset allocation management. This approach provides continuity in management as well as a team of experienced investment professionals focused on your success.

3. Goal oriented

Like a runner who knows the time to beat, investors should have a clear goal in mind when building a portfolio. Many companies offer two options that let you define your investing objective – by target risk or target date.

Ready, set, invest: Which course is right for you?

Target-risk and target-date funds generally offer instant diversification and professional management. To aim for your investing goals, choose the type that’s right for you.

Target-Risk Funds

Target-Date Funds

Matches your comfort with risk Aligns with a target date—approximately when you’ll retire or start withdrawing your money
Managed to maintain targeted risk levels Dials down risk to be more conservative as the target date approaches by reducing your exposure to stocks and increasing your exposure to bonds and cash
You decide when to change your risk level Automatically adjusts to reduce risk level

 

Target-date portfolios: Each target-date portfolio seeks the highest total return consistent with its asset mix. Even with this measured approach, it’s important to note the principal value of your investment is not guaranteed at any time, including the target date.

With either option, you’ll benefit from portfolios that are managed by experts, broadly diversified and conveniently packaged. Set your sights on your investing goal.