Target date retirement funds, also called lifestyle funds or simply target funds, are mutual funds that automatically adjust their own asset allocation with a target retirement date in mind. As the years pass, the fund moves from a more aggressive, equity heavy mix to one that is less aggressive and may include more income generation and “safer” investments.
Glide path refers to how that mix of investments intends to change as the years pass. Imagine a chart in which you graphed the asset allocation over time (% in stocks, for example) and you have an idea of what the “glide path” of a fund will be. A steeper glide path means that the fund becomes more conservative faster than one with a shallow glide path. A few years ago, I compared the different asset allocations of target funds for several fund companies and it was obvious that not all funds were equal. IN that example, Fidelity was more aggressive, starting with a higher allocation in stocks and ended with a higher allocation in stocks when compared to TIAA-CREF, Vanguard, and T. Rowe. (These numbers are several years old now and we didn’t get a fund’s specific glide path, we simply used the target years as a proxy for the glide… so this may have changed since then)
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