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A Little About All-in-One Mutual Funds
By JLP | January 6, 2006
Jane Bryant Quinn likes all-in-one mutual funds. For those of you who may not be familiar with them, all-in-one mutual funds are funds that do asset allocation for you. They come in two varieties: Lifecycle funds and Target-Retirement funds. Lifecycle funds invest based on your chosen allocation which could be conservative, moderate and aggressive. Target-Retirement funds invest based on when you want to retire. The closer you get to retirement, the more coservative the funds become.
Retirement plans like 401(k)s are starting to offer Target-Retirement funds. My wife’s 401(k) offers them but we don’t use them.
I plan on covering this topic a little more indepth in the future.
Target Retirement Funds, Life-Cycle Funds, Jane Bryant Quinn
Topics: Mutual Funds, Retirement Planning | 8 Comments »
January 6th, 2006 at 5:56 pm
I was a big fan of these when they became trendy a few years back, but I grew frustrated with the lack of control over the exact allocation I wanted. They are great for novices or people who are not obsessed with their portfolio like me.
January 6th, 2006 at 5:58 pm
I meant:
They are great for novices or people who are not obsessed with their portfolio like I am.
January 6th, 2006 at 6:27 pm
I just shifted all my IRA money into one simple target retirement fund at Vanguard. I love it because it’s simple!
January 6th, 2006 at 9:12 pm
Nice looking site.
Just to let you know, your blogshares link still points to your old site.
Best,
Allan
January 7th, 2006 at 1:18 am
I just switched a lot of our assets to one of Vanguard’s Target Retirement fund. It’s not the exact allocation I would have chosen, but it’s close enough, and I figure that their automatic allocation will perform better than my manual periodic tinkering. I wrote a little about this here:
I’ll probably augment this with Vanguard’s REIT index fund shortly.
January 7th, 2006 at 7:18 am
I only like these funds for those that have all of their retirement assets in one account. We have ours spread over four different accounts, so these lifecycle funds don’t make sense for us because they aren’t available in all accounts.
Also, I’ve found them to be a bit more expensive.
January 7th, 2006 at 10:06 am
New research indicates that asset allocation is not as important as proponents of Modern Portfolio Theory would have us believe. Hence, these lifecyle and target retirment funds are a waste of time.
January 8th, 2006 at 10:47 pm
While the Vanguard Life-Cycle Funds / Target Retirement Funds have no management fee — just the management fees of their component funds — other mutual fund companies do impose management fees for their funds of funds… so you’re paying more fees than you would if you invested directly in the component funds. Just something to look out for.