What is a characteristic of static-allocation funds?

Static-allocation funds are designed to maintain a defined asset allocation over time. This characteristic means that the proportions of various asset classes, such as stocks, bonds, and cash, remain consistent unless manually adjusted by the fund manager or the investor. The intent behind this strategy is to provide a predictable and stable investment approach that aligns with an investor's long-term goals and risk tolerance.

In contrast to options that suggest changes in allocation or a focus on cash at retirement, a static-allocation fund remains steadfast in its original asset mix, making it an important tool for investors seeking stability over active management of their investments. The approach allows investors to benefit from various asset classes without the complexities that come with frequent rebalancing or adjustments based on market conditions.