what does the B$ community think of target date mutual funds? I'm not a big believer in actively-managed mutual funds, especially with so many cheaper ETFs out there, and I like the automatic asset allocation. but I've also read that it's not the most tax-efficient, e.g. if it has tax-exempt bond holdings and you have the fund in a tax-deferred account. granted, this is probably not much of an issue for e.g. a 2050 fund that has minimal bond holdings, but something to think about.

one reason I'm thinking about this is that I was looking at my 401k and realized I really never did much research into my fund choices. I also didn't realize there was a "fund window" that allowed me to buy a whole bunch of other funds, including a couple target funds. weird thing is, they offer fidelity's target funds, but with a "max front-end sales load" of 5.75% why would anyone pay any load for a fund that essentially tracks the S&P 500? am I crazy or is this ridiculous, even for an actively managed fund?

I could also choose a few vanguard funds, but they don't offer vanguard's target date funds, nor do they offer enough of their individual funds for me to synthetically construct it.

They are basically "set it and forget it" type fund choices for those who don't want to take the time to manage their own funds. You are right, that they are best suited for tax deferred accounts as they are not managed for taxes.

I have recommended these for my two sons in their 401K's and Roths. They have no inclination at this point in their lives to manage their funds, if they did not have payroll deduction, the funds would not even get invested.

You are right - a 5.75% front end sales charge is obscene. Many times, the 401K choices in employer programs are not set up from the perspective of the investor. The fund probably offers the 401K admin for free and they make it up on the fees from the employees. Other than complaining to HR, there is little you can do to change these usually.