Portfolio
What is Target-Date Fund (TDF)?
A Target-Date Fund automatically shifts its asset allocation from aggressive (mostly stocks) to conservative (more bonds) as it approaches a target retirement year, a one-decision retirement portfolio dominant in US 401(k) plans.
Formula
Glide path: Equity allocation declines roughly 1–2 percentage points per year as the target date approaches.
How to Interpret
TDFs (Vanguard Target Retirement, Fidelity Freedom, BlackRock LifePath) are the default investment in most US 401(k) plans. You pick the year closest to age 65 (e.g. Vanguard Target Retirement 2055) and the fund handles rebalancing forever. Indian equivalents are 'Solution-Oriented' retirement funds (HDFC Retirement Fund, ICICI Retirement Fund), but TDF dominance is a US phenomenon.
Typical Ranges
US TDFs: expense ratios 0.08–0.40%. Suitable as a single-fund 401(k) or IRA holding. Avoid TDFs with expense ratios above 0.75%.