b'06Key Features Target date funds are typically structuredThe built-in glide path offers a convenient as open-end mutual funds or ETFs that mechanism for investors to pursue a automatically adjust their asset allocation specific goal, most commonly retirement over time. goals, by reducing portfolio risk as withdrawals near. The most common structure shifts froma riskier portfolio (higher equity exposure) Target date funds can be adapted totoward a more conservative mix (bonds,meet a wide range of objectives beyond cash equivalents) as the target date retirement, depending on the designapproaches. and target horizon. While alternative structures exist, such as A key drawback is that once the portfolio funds that start conservatively and growbecomes conservative, returns may beriskier, or those that shift exposure betweenlower than what could be achieved withsectors (e.g., energy to technology), thea riskier allocation.risky-to-safe format dominates the market. Additionally, the glide path mayThese funds provide the same generalnot align perfectly with an individual advantages and drawbacks as open-endinvestors preferences or financial funds, including daily liquidity and situation, limiting flexibility.regulatory protections under the 1940 Act.Mayer Brown|Target Date Funds 22'