Retirement income funds are designed for retirees who want professional management of their portfolios and portfolio distributions without the expense of an investment adviser.
All of the funds within this category as defined by Lipper have been around less than five years. Information under the “Fund overview” tab shows the funds’ one and three-year performance compared to that of the Standard & Poor’s 500 index and the category average. Under the “Fund details” tab are the current targeted distribution rates (hover your mouse over the column at right) and each fund’s general asset allocation. The asset allocation indicates how aggressive or conservative the fund will be, which in turn will impact the performance of the fund relative to the S&P 500. For instance, a higher allocation to bonds over stocks will typically result in less volatility, but lower returns over time.
Lipper divides the category into two subsets. Nonperpetuity funds pay distributions for a finite, stated amount of time. They will have paid investors all of their principal and earnings by the time the fund is shuttered. Perpetuity funds, on the other hand, will attempt to preserve capital for as long as possible while making payments forever or until the capital is depleted.
Source: Lipper, a Thomson Reuters company.
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