Final answer:
Target date funds are a type of mutual fund that changes its asset allocation over time, starting with mainly investing in stocks and gradually shifting towards bonds as the target date approaches.
Step-by-step explanation:
Target date funds are a type of mutual fund that change their asset allocation over time as the target date approaches. They start by mainly investing in stocks to potentially maximize growth in the early years. As the target date gets closer, the fund gradually shifts its investment towards bonds to reduce risk and preserve capital. This strategy is designed to align with the investor's time horizon and risk tolerance.