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While I Was Gone: Target Funds

While I was out of town last week with my wife, several very interesting issues came into the ETF world; Target Date Funds.

Here's the List with Tickers and Expense Ratios

Fund Ticker Cost
iShares S&P Target Date Retirement Income Fund TGR 0.31%
iShares S&P Target Date 2010 Index Fund TZD 0.31%
iShares S&P Target Date 2015 Index Fund TZE 0.31%
iShares S&P Target Date 2020 Index Fund TZG 0.31%
iShares S&P Target Date 2025 Index Fund TZI 0.30%
iShares S&P Target Date 2030 Index Fund TZO 0.30%
iShares S&P Target Date 2040 Index Fund TZV 0.29%

Also iShares has issued 4 new risk-based ETFs

Fund Ticker Cost
iShares S&P Conservative Allocation Fund AOK 0.31%
iShares S&P Moderate Allocation Fund AOM 0.32%
iShares S&P Growth Allocation Fund AOR 0.33%
iShares S&P Aggressive Allocation Fund AOA 0.34%

How They Work

The underlying indexes of these funds were disigned by S&P to ultize ETFs.  Just like other indexes are composed of stocks or bonds, these indexes are composed of nine iShares ETFs.  The weights among the different funds are determined by surveying the broad target date mutual fund market, and using each funds peer group to set weights among asset classes.

What Happens at the 'Target Date'

Once a fund hits its target date it will have the exact allocation as the Retirement Income Fund and shares of the respective fund will be transfered into the retirement income fund and the target date fund will be discontinued two years after after the target date is reached.

Wiser Wealth Management, Inc. is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.

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