LLQP Segregated Funds & Annuities · Component 2.1 · 30% of the exam
A 'target-date' or lifecycle segregated fund:
- AKeeps the same asset mix throughout, since the target date only sets when the guarantee applies
- BGuarantees the value at the target date, in the same way as a segregated fund maturity guarantee
- CIs a money market fund that begins paying out income on the target date
- Shifts automatically from growth toward conservative assets as the target date approaches
Correct answer: D) Shifts automatically from growth toward conservative assets as the target date approaches
Glide-path funds suit clients who want automatic de-risking. They may be paired with a maturity guarantee at the target date.
Why the other options are wrong
- AThe mix changes over time by design.
- BThe date is a target, not a guarantee, unless a separate guarantee applies.
- CIt holds a diversified, changing mix.
Exam tip
Target-date fund: automatic glide path to the target year.
Common mistake
Assuming the target date means the value is guaranteed then.
What this tests
CISRO competency component 2.1 — Analyze the available products that meet the client's needs — which is weighted at 30% of the Segregated Funds & Annuities module. Written against the published curriculum.
More from component 2
- A segregated fund's 'guaranteed amount' after a partial withdrawal under proportional reduction is:
- A distinctive estate advantage of a segregated fund over a non-registered mutual fund held jointly with a child is:
- Segregated fund guarantees are most valuable relative to their cost when:
- A segregated fund's annual statement reports:
- Compared with a segregated fund, an exchange-traded fund (ETF) generally offers:
- A segregated fund's 'automatic death benefit reset' feature:
Practice the whole Segregated Funds & Annuities module
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