Target fund - FAQs

WealthBuilder Target funds provide a simple solution if you need to invest for a specific goal such as university fees, mortgage repayment, or additional retirement benefits. They may also suit you if you need a 'core' long-term investment in addition to existing shares and funds or prefer a fund that is actively managed on your behalf.

This is a fund of funds that invests across the Fidelity range. The portfolio manager aims to manage the funds so the risk reduces over time and helps protect gains made in the early years.

The fund manager addresses three types of risk:

• asset class risk - by combining assets that have different levels of volatility, and whose performance is not closely related
• fund selection risk - by screening the underlying funds, the manager and analysts continually evaluate the best performers
• event risk - the manager chooses when to adjust the funds in the portfolio to make the most of market opportunities
  

No. If your circumstances change you can take a lump sum when you need it, but remember these funds are managed to realise their greatest potential at the target date. You can also switch into other investments or an income fund.

If you die before the target date, target funds are treated the same way as any other investment held with us. If the funds are held in an ISA, your investments and any income or growth stop being tax-efficient (as this is personal to the account holder).

 

The value of the investments in your ISA is added to your estate and may be liable to Inheritance Tax. Whether the fund is sold or the account holder's name changed is usually confirmed after probate is complete.

 

If the fund is held outside an ISA, the funds can either be sold or reregistered in another name (according to the probate details). The new applicant(s) will need to complete a new application form.

No. Although the funds are actively managed towards their target date, we do not guarantee how much you will get back. These funds aim to reduce the levels of risk as the target date approaches but will be subject to market conditions when you choose to sell them. Our illustrator tool can provide a guide for you. 

This is how the portfolio manager believes risk and volatility should be managed. If investors switch their assets as the date they are saving for approaches, it could be too much, too late.

 

Target Funds are actively managed to lock in gains made in the early years. They use the portfolio manager's skills to select the right funds at the right time so that the asset split evolves towards the target date.