InsightfulValue
← Home

Target
Target

-4.9%

Retail / Retail discount department stores and hypermarkets


Risks
1. Overdiversification: Since a target date fund typically allocates its assets among a wide range of asset classes, it can become over diversified, leading to an inefficient portfolio.

2. Underperformance: Target date funds are often managed according to a specific asset allocation according to age, but this can lead to underperformance in certain markets or when specific investments perform better than others in the portfolio.

3. Expense Ratios: As target date funds are usually actively managed, the expense ratio can be higher than those of passively managed funds for the same asset class.

4. Risk Tolerance: Since many target date funds are designed with a specific age in mind, investors may have different levels of risk tolerance, meaning some may take on too much risk with a target date fund while others may take on too little.

5. Manager Selection: The success of a target date fund can depend heavily on the skill of the fund manager. If the fund manager isn't performing up to standards, it may result in underperformance.

© 2024 - 2025 InsightfulValue.com. All rights reserved. Legal