Lifestyle funds are designed to simplify an investor’s selection of a diversified, risk-appropriate portfolio. Individual funds target different levels of risk tolerance, ranging from conservative to aggressive. What’s more, lifestyle funds are managed, monitored and regularly rebalanced by an experienced portfolio management team to maintain a consistent risk/return profile in the face of changing market conditions. Investors value the lifestyle funds’ ability to offer instant diversification across a broad range of asset classes.
To some, the concept of owning one fund that comes complete with a prepackaged, diversified portfolio — under experienced management — may sound unique. But this approach isn’t uncommon and may suit those investors without the time or knowledge to create a diversified, risk-appropriate portfolio on their own. In other words, this fund choice may appeal to the ‘life-style’ of certain investors.
Investors select the lifestyle fund — which targets a particular level of risk — that most closely matches their own goals and risk profile. For example, you may select a fund to help you achieve an intermediate goal, such as funding a college education, or one that supports the long-range purpose of providing retirement income. What’s more, your lifestyle fund can operate as the major holding in your portfolio or complement existing products. Each fund option (generally, major fund families offer four or five options) comes with a targeted asset allocation.
In general, these funds range from income funds, which invest 20% of their assets in equities (stocks) and 80% in fixed income (bonds), to highly aggressive growth funds with a 100% equities allocation.
Of course, investors should regularly reassess their own risk tolerance to ensure the fund they’ve selected matches their current risk profile. In the event one particular lifestyle fund is no longer compatible with their risk profile, they can move into a different lifestyle fund.
Diversification cannot eliminate the risk of investment losses. As with all mutual funds, the principal value in a Lifestyle Fund is not guaranteed. The fund is subject to risks associated with the types of securities held by each of its underlying funds.
You should consider the investment objectives, risks, charges and expenses carefully before investing. Visit www.tiaa-cref.org/prospectuses for a current prospectus that contains this and other information. Please read the prospectus carefully before investing.
In addition to the fees and expenses associated with Lifestyle Funds, there is exposure to fees and expenses associated with the under lying investment options.
TIAA-CREF Individual & Institutional Services, LLC, and Teachers Personal Investors Services, Inc., members FINRA, distribute securities products.
Investment, insurance and annuity products are not FDIC insured, are not bank guaranteed, are not deposits, are not insured by any federal government agency, are not a condition to any banking service or activity, and may lose value.
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