# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Target-Date Funds

What Is a Target-Date Fund?

A target-date fund is made up of other funds. The underlying funds offer diversified exposure to a mix of asset classes such as stocks (large caps as well as small/mid-caps), foreign stocks, bonds, foreign bonds, and maybe a small portion of cashlike securities. They are designed to be held throughout a person's lifetime, and the asset mix shifts dynamically, becoming less risky over a person's working career and into retirement. These funds achieve this by rebalancing portfolios over time to become less focused on growth (lowering their allocation to stocks) and more focused on preservation (raising their allocation to bonds) as the fund approaches and passes the target date. (The year in the fund's name corresponds approximately to the investor's retirement date.)

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