Target date funds explained
What are target date funds?
Also known as retirement date funds, target date funds provide an ‘autopilot’ approach to investing for goals with specific target dates. As your withdrawal date gets closer, it’s sensible to take less risk, so your investments are automatically rebalanced and reallocated along the way, to save you from doing it.
Why invest in target date funds?
- Invest on ‘autopilot’ for goals with specific withdrawal dates.
- Tap into the expertise of fund managers.
- Reduce risk through diversification.
- Lower the cost of building a diverse portfolio.
Different goals, such as retirement or children’s university fees, have different timescales, so it makes sense to choose an appropriate fund for each goal. It’s also easy to switch funds if the date of a goal changes. Similar to any other fund, you can top up or sell at any time.
How to invest in target date funds
Open an account and pay in some money. You’ll then be ready to buy and sell target date funds online (or over the phone for no extra charge) with us.