Targeted Ways to Beat Inflation
Author: Daisy Maxey</br></br>NEW YORK--With inflation fears on the rise, investors may want to make sure their target-date funds' inflation-fighting strategies match their own.</br></br>Managers of these funds, typically funds of funds that are a popular tool for retirement planning, adopt varying strategies for protecting investors from inflation and differ on just how much protection is required.</br></br>"A lot of these firms are still sort of struggling with how to do it," says Josh Charlson, a senior mutual-fund analyst at Morningstar Inc. More are "adding some slice of TIPS," he says, referring to Treasury inflation-protected securities, a government bond designed to provide a return indexed to inflation.</br></br>Target-date funds automatically shift toward more-conservative investments as an investor ages. That gradual shift is known as the glide path. Some use inflation-fighting components only in longer-dated funds. Others use them across the glide path, he said.