Monday, January 3, 2011

Life Cycle Fund

A Life Cycle Fund is a fund or investment product that alters its style and/or asset allocations based on the investor's age. For example at a you age the product may have a 100% equities exposure, which may reduce to as little as 10% upon the investor reaching retirement age, with 90% of assets in more conservative and income generating assets - consistent with the use of the product as a retirement planning instrument. The benefit of this sort of product is the automatic or systematic nature of it, which if paired with a systematic investment plan, could effectively automate the entire retirement savings and wealth management needs for many investors.

Synonyms: Target Date Fund, Life stages fund, Automatic investment plan, Smart fund

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