Eight American Funds among Morningstar's "Thrilling 34."

Graphic shows that out of 8,000 funds surveyed, only 34 passed Morningstar tests to be considered "Thrilling," with 8 from American Funds.

Of 8,000 funds, only 34 were deemed "Thrilling" by Morningstar — and 8 of those are American Funds.*

Funds were vetted with 8 tests assessing returns, expenses, risk, analyst ratings and more. Less than half of 1% made the final cut.
 

More "thrills" than any other target date series

Of the four largest target date series, American Funds offers the most "Thrilling" funds as underlying strategies in its target date vintages.

Graph shows American Funds' target date series has 8 Morningstar "Thrilling" funds. T. Rowe Price's has 2, and Fidelity’s and Vanguard's have 0.

In evaluating target date funds, investors should consider how the various features of each fund, including the underlying funds, investment results, expenses and glide path construction, apply to their personal situation.

Passive funds are not managed to generate returns that exceed their benchmarks, so target date funds that have only passive underlying investments likely will not have funds on the Morningstar “Thrilling” list.

Source: Morningstar, as defined by mutual fund assets under management as of December 31, 2019.

"Thrilling" underlying strategies are in each American Funds Target Date Retirement Series® vintage.

Graph shows AMCAP Fund, The Growth Fund of America and New Perspective Fund are in every American Funds Target Date Retirement Series vintage except the 2010 fund; Capital World Growth and Income Fund, American Balanced Fund and American Funds Global Balanced Fund are in every vintage (2010 through 2060); and The Income Fund of America and Capital Income Builder are in every vintage except the 2050, 2055 and 2060 funds.

As of December 31, 2019

RESOURCES

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*Source: Morningstar, "Fund Spy: The Thrilling 34," by Russel Kinnel, December 2019. Morningstar’s screening took into consideration expense ratios, manager ownership, returns over manager’s tenure, and Morningstar Risk, Analyst and Parent ratings. The universe was limited to share classes accessible to individual investors with a minimum investment no greater than $50,000 and did not include funds of funds. Class A shares were evaluated for American Funds. American Funds Target Date Retirement Series invests in Class R-6 shares of the underlying American Funds. Not all eight American Funds strategies are in each target date fund. Underlying funds may change over time. The list's criteria have changed over the years. Visit www.morningstar.com for more details.

†Not all eight funds listed in the “The Thrilling 34” list are in each target date fund. Underlying funds may change over time.

Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.

Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.

Each target date fund is composed of a mix of American Funds and is subject to the risks and returns of the underlying funds. Underlying funds may be added or removed during the year. Although the target date funds are managed for investors on a projected retirement date time frame, the funds’ allocation strategy does not guarantee that investors’ retirement goals will be met. The target date is the year that corresponds roughly to the year in which an investor is assumed to retire and begin taking withdrawals. American Funds investment professionals manage the target date fund’s portfolio, moving it from a more growth-oriented strategy to a more income-oriented focus as the fund gets closer to its target date. Investment professionals continue to manage each fund for approximately 30 years after it reaches its target date.

This content, developed by Capital Group, home of American Funds, should not be used as a primary basis for investment decisions and is not intended to serve as impartial investment or fiduciary advice.

Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and should not be considered advice, an endorsement or a recommendation.

All Capital Group trademarks mentioned are owned by The Capital Group Companies, Inc., an affiliated company or fund. All other company and product names mentioned are the property of their respective companies.