Fund that adjusts its allocation over time toward a target year, usually so risk falls as retirement or another goal approaches.
A target-date fund is a fund that automatically adjusts its asset allocation as it moves toward a specified target year, most often retirement.
The main selling point is simplicity. Investors get a prebuilt allocation strategy that becomes more conservative over time instead of having to manually rebalance the portfolio.
Target-date funds usually start with more equity exposure when the target date is far away. As the date gets closer, the fund shifts toward bonds, cash, or other lower-volatility holdings.
That planned evolution is often described as the fund’s glide path.
Target-date funds are widely used in retirement plans because they reduce day-to-day allocation decisions for investors. The tradeoff is that the glide path is standardized, so it may not fit every investor’s goals, tax situation, or risk tolerance.