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Meaning / Definition of

Psychological Contract

Categories: Business and Management, Personnel Management,

usually expressed as 'the Psychological Contract', this is the understanding between employee(s) and employer as to their mutual expectations arising from the employment relationship. The expectations involve a complex balance of inputs and rewards, including contractually clear elements such as hours and pay, and extend to implications and assumptions about security, loyalty, and other highly subjective factors. The Psychological Contract is a two-way notional agreement between employee and employer, typically analysed from the employee perspective. Psychological Contract theory potentially extends to relationships between suppliers and customers, and between the state and its people.

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Definition / Meaning of

Target Date Fund

Categories: Finance,

A target date fund is a fund of funds that allows you to link your investment portfolio to a particular time horizon, typically your expected retirement date. In fact, a target date fund characteristically has a date in its name, such as a 2015 Fund or a 2030 Fund. A target fund aiming at a date in the somewhat distant future tends to have a fairly aggressive asset allocation, with a focus on growth. As the target date approaches, the fund is designed to become more conservative to preserve the assets that have accumulated and eventually to provide income. Each fund company formulates its own approach to risk, so that the allocation of one 2025 Fund may be noticeably different from the allocation of a 2025 Fund from a different company. You can find model portfolios and statements of investment strategy in the fund's prospectus. Each mutual fund company that offers target date funds tends to offer a series, with dates five or ten years apart. Most companies populate their funds of funds with individual funds from their fund family, though some companies add mutual funds or exchange traded funds from other investment companies.Like other funds of funds, the fees you pay for a target date fund may be higher than you would pay to own each of the individual funds separately. However, these fees pay for an additional level of professional oversight.

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