asset allocation fund


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Asset Allocation Fund

A mutual fund with a portfolio mixing stocks, bonds, and cash equivalents in different types of securities. This is done to diversify the fund and avoid the volatility in any one market. There are three basic types of asset allocation funds. Balanced funds maintain a more-or-less fixed ratio of stocks and bonds. Life-cycle or target date funds start with higher-risk investments, but move toward lower-risk as the investor approaches some pre-determined date, usually retirement. Finally, life-style funds are actively managed according to an investor's or broker's specifications and market conditions.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

asset allocation fund

An investment company that varies the proportion of its portfolio devoted to stocks, bonds, and money market securities in order to reduce the variability of returns and to take better advantage of different segments of the securities markets. An asset allocation fund is designed to save individual investors from being required to alter their investment mix in response to changes in market conditions.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
"The problem with asset allocation funds is that there is too much variety.
Askari Islamic Asset Allocation Fund - Class C###September 04, 2019###72.3504###68.7329
Askari Islamic Asset Allocation Fund - Class C###August 30, 2019###99.2555###94.2927
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The survey records net flows of global asset allocation funds of $3.8 billion at the end of the first quarter, a pace that, if maintained, will fall short of the $23.3 billion recorded 2012.
Asset allocation funds tend to be looser, allowing managers to roam from category to category.