U.S. Allocation

U.S. Allocation funds are mutual funds or ETFs that own a diversified... U.S. Allocation funds are mutual funds or ETFs that own a diversified portfolio of U.S. assets. These funds typically own a mix of equities, fixed-income, and cash, and can also own, depending on their mandate, commodities (such as gold), as well as derivatives. These funds tend to be actively managed, with professional managers using both quantitative and qualitative approaches to best determine the ideal basket of assets at any one time. Depending on the particular U.S. Allocation fund, it may have a higher weighting towards equities vs. bonds. A fund that owns 80% of equities will have more of a Growth characteristic, while a 60-40 fund will have more of a Balanced flavour. These funds can help retirees meet their goals. These funds tend to be managed with the assumption that a diversified portfolio more weighted towards equities will produce the best risk-adjusted returns over the long term. It’s important to note, however, that in the short term, these funds can experience significant volatility (especially Growth-focused ones) due to their majority allocation to equities. As such, these funds are not appropriate for very conservative investors. Last Updated: 12/23/2024 View more View less

U.S. Allocation funds are mutual funds or ETFs that own a diversified portfolio of U.S. assets. These funds typically own a mix of equities, fixed-income, and cash, and can also own, depending on... U.S. Allocation funds are mutual funds or ETFs that own a diversified portfolio of U.S. assets. These funds typically own a mix of equities, fixed-income, and cash, and can also own, depending on their mandate, commodities (such as gold), as well as derivatives. These funds tend to be actively managed, with professional managers using both quantitative and qualitative approaches to best determine the ideal basket of assets at any one time. Depending on the particular U.S. Allocation fund, it may have a higher weighting towards equities vs. bonds. A fund that owns 80% of equities will have more of a Growth characteristic, while a 60-40 fund will have more of a Balanced flavour. These funds can help retirees meet their goals. These funds tend to be managed with the assumption that a diversified portfolio more weighted towards equities will produce the best risk-adjusted returns over the long term. It’s important to note, however, that in the short term, these funds can experience significant volatility (especially Growth-focused ones) due to their majority allocation to equities. As such, these funds are not appropriate for very conservative investors. Last Updated: 12/23/2024 View more View less