📉One-size-fits-all structure of target date funds doesn't cater to individual investment needs.
🔒Lack of diversification outside of the fund family restricts investment options.
🌐Broad investment approach can pose risk and limit potential return.
💰Higher fee structure due to multiple layers of fees.
🔀Target date funds don't consider an individual's other investments.
Are target date funds suitable for everyone?
—No, target date funds have a one-size-fits-all structure that may not align with individual investment needs and risk tolerance.
What are the advantages of target date funds?
—Target date funds act as surrogate financial planners, automate the rebalancing process, have low minimum investment requirements, and are professionally managed.
Do target date funds offer diversification?
—Target date funds diversify within their fund family, but may lack diversification outside of it.
How do target date funds adjust risk?
—Target date funds adjust risk by rebalancing the portfolio as an individual gets closer to retirement, moving from equity to fixed income investments.
What should I consider before investing in target date funds?
—Before investing in target date funds, consider your risk tolerance, other investments, and the fee structure to determine if it aligns with your financial goals.
00:00This video discusses why some people bash target date funds.
00:09Target date funds have a one-size-fits-all structure that doesn't cater to individual investment needs.
00:38They lack diversification outside of their fund family and can be too broad in their investments.
01:31The fee structure can be higher due to multiple layers of fees.
02:00Target date funds don't consider an individual's other investments.
