Target-Date 2035

Target Date 2035 Fund is a target date fund that is structured... Target Date 2035 Fund is a target date fund that is structured to meet a certain investment objective in 2035. How a Target Date 2035 Fund is managed will depend on what kind of target date fund it is. If it’s a “to” fund, the fund will reach its final asset allocation (say, 80% bonds and 20% equities) in 2025, and then stay there as long as it exists. If it’s a “Through” fund, however, the managers will keep actively adjusting the asset allocation past the target date. Another way of saying this is that the so-called Glide Path of the fund continues, as opposed to reaching a terminal state. Eventually, a Target Date 2035 Fund usually merges with an income fund that has a conservative (and steady) stock-bond mix. Target Date 2035 Funds may be appropriate for conservative investors who seek a balanced portfolio of stocks and bonds. While these funds are still far away from their target date, by this point, they will be transitioning to owning fewer equities in favour of bonds to preserve capital. Someone looking to save for a more expensive goal decades into the future will be better off buying a Target Date Fund whose date lines up with their objective (i.e. later than 2035). The ideal investor in one of these funds is someone who has a goal, such as retirement, that lines up with the target date. A downside to Target Date 2035 Funds is that there’s no guaranteed return, unlike, say, an annuity. The return for a particular Fund will come down to the decisions of the managers, as well as the performance of equity and fixed-income markets. In addition, fees on these funds can be high, as they are often considered “funds of funds”. So investors end up paying the fees of the fund itself, plus the fees of the various funds that are owned by the managers. Last Updated: 12/03/2024 View more View less

Target Date 2035 Fund is a target date fund that is structured to meet a certain investment objective in 2035. How a Target Date 2035 Fund is managed will depend on what kind... Target Date 2035 Fund is a target date fund that is structured to meet a certain investment objective in 2035. How a Target Date 2035 Fund is managed will depend on what kind of target date fund it is. If it’s a “to” fund, the fund will reach its final asset allocation (say, 80% bonds and 20% equities) in 2025, and then stay there as long as it exists. If it’s a “Through” fund, however, the managers will keep actively adjusting the asset allocation past the target date. Another way of saying this is that the so-called Glide Path of the fund continues, as opposed to reaching a terminal state. Eventually, a Target Date 2035 Fund usually merges with an income fund that has a conservative (and steady) stock-bond mix. Target Date 2035 Funds may be appropriate for conservative investors who seek a balanced portfolio of stocks and bonds. While these funds are still far away from their target date, by this point, they will be transitioning to owning fewer equities in favour of bonds to preserve capital. Someone looking to save for a more expensive goal decades into the future will be better off buying a Target Date Fund whose date lines up with their objective (i.e. later than 2035). The ideal investor in one of these funds is someone who has a goal, such as retirement, that lines up with the target date. A downside to Target Date 2035 Funds is that there’s no guaranteed return, unlike, say, an annuity. The return for a particular Fund will come down to the decisions of the managers, as well as the performance of equity and fixed-income markets. In addition, fees on these funds can be high, as they are often considered “funds of funds”. So investors end up paying the fees of the fund itself, plus the fees of the various funds that are owned by the managers. Last Updated: 12/03/2024 View more View less