American Funds Target Date
American Funds Target date funds are mutual funds that aim to provide investors with a portfolio that is appropriate for the investor’s time horizon. The funds invest in a mix of stocks, bonds, and other assets that is designed to become more conservative as the Target date approaches.
The asset allocation of the fund changes over time as the Target date approaches. This is done to help protect the investors’ capital and to provide them with a reasonable rate of return.
As the Target date gets closer, the fund’s asset allocation will shift to becoming more conservative. This is because there is less time for the investments to recover from any market declines.
The funds are designed for investors who have a specific goal in mind, such as retirement. The Target date is the year when the investor plans to retire.
For example, if an investor plans to retire in 2030, they would choose a Target date fund with a 2030 Target date.
American Funds Target date funds can be a good choice for investors who want a simple way to invest for their retirement. The funds provide diversification and professional management. The asset allocation of the fund will automatically become more conservative as the Target date approaches, which can help protect investors’ capital.
