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Thursday, January 25, 2007

Target-Date Funds Becoming Popular

Recently read an article about the growing popularity of
Target-Date Funds. The funds provide a simple solution as all you need to do is to select the appropriate retirement year. Based on the retirement year, the fund automatically does the asset allocation, with the shift towards more conservative investments happening as one gets closer to the retirement year.

As per the article, besides their performance, another thing to watch is their expenses as some of these funds definately have high expenses. The articles mentions about a Morningstar analyst who thinks expenses of 1% or less are good benchmark.

I have been following some of these funds but so far, haven't invested in them. However, their simplicity is definitely appealing to me as well as the fact that I don't have to worry about what stocks/bonds etc to pick and how much to put in each area, etc.

posted by Ruby @ 5:59 AM

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