Lifecycle fund

(redirected from Lifecycle Funds)

Lifecycle Fund

Any mutual fund in a fund family that offers funds with varying levels of risk that are targeted at potential shareholders in different age groups. For example, a fund family may offer three lifecycle funds, one aimed at investors in their 20s and 30s, one at persons in their 40s and 50s, and one for those nearing or in retirement. In this situation, the first fund will carry the most risk because younger investors often seek to make a large return while the third will carry the least risk as investors wish mainly to protect their savings and pensions.

Lifecycle fund.

A lifecycle fund, which is a fund of funds, invests in individual mutual funds that a fund company puts together to help investors meet their objectives without having to select individual funds.

Some companies offer a set of lifecycle funds, each with a different level of risk and return, from conservative to aggressive. In that case, you may choose a lifecycle that's appropriate for reaching your goals within the time frame you've allowed.

The typical pattern is for younger investors to choose a more aggressive lifecycle fund and those nearing retirement to choose a more conservative fund.

With target date funds, which are a type of lifecycle fund, you choose a target retirement year, and the fund manager invests and reallocates your money more and more conservatively as you near retirement.

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Nuveen added direct real estate investments as part of the allocation in its target-date fund series, the TIAA-CREF Lifecycle Funds, according to a recent announcement.
Nuveen, a global investment manager, has added direct real estate investments as part of the allocation in its award-winning target-date fund series, the TIAA-CREF Lifecycle funds, the company said.
As a result, the last 10 years have seen an evolution in products and services such as lifecycle funds, collective investment trusts (CITs) and managed accounts.
The next tier is balanced funds and managed accounts, he says, followed by target-date funds (TDFs) or lifecycle funds.
Employees benefit, said TIAA-CREF's Walsh, because lifecycle funds are professionally managed, take age-based considerations into account, and are periodically rebalanced to move assets from equity investments to fixed-income investments appropriate for retirees.
Now there are other choices: how will the construction of lifecycle funds be affected?
Findings on lifecycle funds, including target-date funds and target-risk funds, show the focus shifting from asset maximization to liability matching.
Also known as lifecycle funds, these funds are designed to offer a diversified portfolio that automatically rebalances to be more focused on income over time.
As with so-called lifestyle or lifecycle funds, distribution funds typically are offered as part of a group.
Qualified default investment alternatives--known as lifecycle funds or pre-mixed funds--are a positive way to simplify portfolio allocation decisions.
A recent survey of more than 200 large employers by Aon Hewitt shows 83% offer either targetdate or lifecycle funds in their 401(k)s, and more than a third of the remaining companies are considering doing so.
To gain access to alternative asset classes in a plan that doesn't provide a direct option for investing in them, he suggests looking at target-date, target-risk or lifecycle funds, some of whose models include alternative asset classes.