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Investors Struggle With Life Cycle Funds
- Article from:
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AP Online
- Article date:
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July 5, 2006
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Copyright informationCopyright 2006 Associated Press/AP Online. This material is published under license from the publisher through YellowBrix, Alexandria, Virginia. All inquiries regarding rights should be directed to YellowBrix. (Hide copyright information)
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NEW YORK - Life cycle funds that are becoming increasingly popular are meant to make retirement planning easy. But that's not how investors have been using them, mutual fund companies say.
The funds are aimed at a specific retirement year. Fidelity Investments' life cycle Freedom Funds for instance, start with a fund for people who retired before 1998, then progress to a fund for people who plan to retire in 2050.
The funds are an aggregation of many other mutual funds, sometimes as many as 25. The idea behind life cycle funds is that investors tend to do a poor job of diversifying and rebalancing their portfolios as they approach retirement, so the fund will do it for you, starting with ...