Vanguard has launched a diversified fund Vanguard Target Retirement 2055 Fund for young investors that expands the company's target-date fund series to 12 offerings.

The fund is aimed at investors of 18 to 22 years old who plan to retire and leave the workforce in or within a few years of 2055.

Initial allocation of the fund is approximately 90% stocks and 10% bonds. The fund will gradually shift to bonds over time to an expected allocation of 50% stocks/50% bonds upon reaching its target date and will attain an expected final allocation of 30% stocks/70% bonds seven years after the target date.

The expense ratio of the 2055 fund is expected to be 0.19%, compared to the average expense ratio of 1.17% for a target-date fund in the fund’s peer group.

Vanguard chairman and CEO Bill McNabb said that over the past few years, the stock market has dropped 57%, rallied 86%, and subsequently declined 8%, leading to the potential for an entire generation to become wary of investing.

“We must encourage younger investors to participate in the financial markets at an early age, save at aggressive levels, keep an eye on investment costs, and maintain a long-term focus. Target-date funds may be an ideal vehicle for many of these investors to help position their retirement savings for the long run,” McNabb said.