Target-date fund
A fund whose composition changes on a schedule: the closer the year in its name, the smaller the share of equities and the larger the share of bonds and cash instruments.
How to read the number
One decision instead of an annual one: the investor picks a horizon, and the change of weights happens inside the fund along a path announced in advance.
When the metric lies
The path is identical for everyone who shares a year, while their circumstances are not. A change of plans does not change the fund's schedule, and the portfolio stops matching the task before the date arrives.
Also known as: lifecycle fund