Target date funds vs. Balanced funds

Balanced funds invest in both stocks and bonds, typically allocating 50% to 70% in stocks.

Target date funds are ‘age-based’ funds consisting of a portfolio whose asset allocation mix becomes more conservative as the target date (usually retirement) approaches.

  1. Diversification — While balanced funds are typically allocated to U.S. large cap equity and corporate or government bonds, most target date funds offer much more diversification, typically incorporating U.S. small cap, international developed, and emerging market equities, along with a handful of additional fixed income asset classes.



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