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Exam CIFC Topic 1 Question 67 Discussion

Actual exam question for IFSE Institute's CIFC exam
Question #: 67
Topic #: 1
Which of the following best describes how a target date fund works?

Suggested Answer: A Vote an answer

Explanation
This is because a target date fund is designed to reduce the risk and volatility of the portfolio as the investor gets closer to their retirement or other savings goal. Equities tend to have higher returns but also higher risk than fixed income, so a target date fund gradually reduces the exposure to equities and increases the exposure to fixed income over time. This way, the investor can benefit from the growth potential of equities in the early years and preserve their capital with the stability of fixed income in the later years.

by Carr at Sep 27, 2024, 09:04 AM

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