Statically-Allocated Aggressive Funds

All-in-one funds, target-risk & target-date funds, ETF

Diversified Portfolio

Building a diversified portfolio over investment classes and different markets could not be easy for a beginner investor. Here are some ways to achieve this:

1. Use a robo-advisor (a programmatically creating and managing investment portfolio).
2. Build a three-fund portfolio of market-wide mutual funds (or ETFs) covering US Stocks, International Stocks, and Bonds.
3. Use target-date mutual funds.
4. Use statically-allocated mutual funds (or ETFs).

Statically-allocated funds (sometimes called all-in-one or target-risk funds) are available mainly in mutual funds. While less known, companies like BlackRock/iShares, SPDR, and Invesco offer statically-allocated ETFs. The typical expense ratio is a bit high (compared to target mutual funds): 0.20–0.40%).

Target-Date vs. Target-Risk Funds

A target-date mutual fund is accomplished with a target date (a year) by which it is assumed that the investor might require capital. Thus, such a target-date fund becomes more conservative as the target date approaches.