What characterizes life-style funds?

Life-style funds are characterized by their active management based on market conditions. These funds are designed to adjust their asset allocations over time, typically becoming more conservative as the target date approaches, such as retirement. This dynamic approach allows life-style funds to manage risk while aiming to provide growth potential in accordance with an investor's changing needs and timelines.

The essence of life-style funds lies in their ability to adapt investment strategies in response to market trends and the investor's life stage, rather than remaining static or limited to a specific type of investment like bonds or cash. Through regular adjustments based on economic indicators and market performance, these funds seek to balance risk and return effectively over time, catering to the long-term goals of the investor.