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What is the sliding path?

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Date10/27/2020 1:49:49 PM
PriceUSD 100.00
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Hover path refers to a formula that specifies the asset allocation mix of the target date fund, based on the number of years until the target date. The sliding path creates an asset allocation that usually becomes more conservative (i.e. includes more fixed-income assets and fewer stocks) as the fund approaches the target date.
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How does the glide track work
Each family of target date funds has a different sliding path, which determines how the asset mix will change as the target date approaches. Some of them have a steeper trajectory, and have become significantly more conservative a few years before the target date. Others take a more incremental approach.
The mix of assets on the target date could also be very different. Some target date funds assume that the investor wants a high degree of security and liquidity because he may use the funds to purchase an annuity.
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