Target Risk & Target Date Mutual Funds

Seeking the best mutual fund for you? Consider a fund-of-funds

Whether you're new to investing or have a change to your current goal, a fund-of-fund option may provide the answer you need. Most mutual funds spread your money across securities in one category. A fund-of-fund investment goes beyond that and uses a mix of several funds to spread money across multiple asset categories.

Asset Allocation: Diversification Suited to You

This strategy, called diversification, gives you a better chance of weathering market ups and downs than one focused on a single asset category. Having a mix of investment types is a good place to start, but it's important to go one step further and determine how much of each type of investment. That's your asset allocation. You want to choose an allocation that aligns with your investing profile—an evaluation that considers your comfort with risk and how long you have to invest, among other factors.

Find the Fund of Funds that May Be Right for You

There are two types of fund-of-funds options, target-risk and target-date funds. Both types offer instant diversification and professional management.


Target-Risk Funds

  • Offered on a spectrum, generally from very conservative to very aggressive. You choose the option that matches your comfort with risk.
  • Managed to maintain the risk level indicated. Over time, the managers adjust the allocation percentages to bring them back in alignment.


Target-Date Funds

  • Aligns with a target date—approximately when you'll retire or start withdrawing your money. These are sometimes called a lifecycle fund.
  • Dials down risk automatically to be more conservative as the target date approaches by reducing your exposure to stocks and increasing your exposure to bonds and cash

Regardless of whether you choose our target-risk or target-date option, you may benefit from portfolios that are managed by experts, broadly diversified and conveniently packaged.

One Choice Portfolios®

Signature target-date and target-risk asset allocation fund-of-funds from American Century Investments®

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A One Choice Target Date Portfolio's target date is the approximate year when investors plan to retire or start withdrawing their money. The principal value of the investment is not guaranteed at any time, including at the target date.

Each target-date One Choice Target Date Portfolio seeks the highest total return consistent with American Century Investments' proprietary asset mix. Over time, the asset mix and weightings are adjusted to be more conservative. In general, as the target year approaches, the portfolio's allocation becomes more conservative by decreasing the allocation to stocks and increasing the allocation to bonds and cash equivalents.

This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.

Diversification does not assure a profit nor does it protect against loss of principal.