What is a risk-target fund?Tue Dec 16 17:34:16 GMT 2014
A risk-target fund aims to keep volatility (put simply, the extent to which the fund goes up and down in value) within a certain target range over the medium to long term. In this way the manager hopes to provide a balance between risk and return that an investor is comfortable with, whether they're a cautious or adventurous investor. Risk-target funds generally invest in a broad mix of investments to reduce the risk of investing in one type alone. These funds are popular because they provide investors with a portfolio of investments which could be the main or only fund they need. The funds are regularly rebalanced to maintain the risk/reward balance, which means investors don't have to do anything as long as their risk profile and saving needs stay the same.
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