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Target-date investors get more low-cost options

Investors are increasingly cost conscious and providers of target-date mutual funds are responding. They're rolling out a greater number of low-cost options. These inexpensive funds come in two main varieties: those that rely on index funds and others with ETFs added in.

By Mark Jewell | Updated on August 16, 2012

BOSTON (AP) — Investors are increasingly cost conscious and providers of target-date mutual funds are responding. They’re rolling out a greater number of low-cost options. These inexpensive funds come in two main varieties: those that rely on index funds and others with ETFs added in.

Target-date funds have “set-it-and-forget-it” appeal. Professional managers automatically adjust the fund’s portfolio to a more conservative mix as the target retirement year approaches. That makes them appealing to investors who want to build their retirement savings without getting too involved in the process. What’s more, target-date funds are often the default option for workers who don’t specify how to invest contributions to their 401(k) plan.

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