AMERICAN FUNDS TARGET DATE RETIREMENT SERIES®

I can

rely on a series that has had strength in all seasons.

The American Funds Target Date Retirement Series has weathered recent volatility better than its peers, continuing a history of  strong results and downside resilience.


Our Series on average outpaced its largest peers in down markets over the past 10 years. Collectively, the group represents 86% of the target date mutual fund market.*

Average excess return vs. Morningstar category averages

(Average over U.S. equity down markets of 10% or more over the last 10 years, as of June 30, 2020) (Class R-6 shares)


Source: Capital Group, based on Morningstar data.

*Market share data as of September 30, 2020.

View exhibit methodology and underlying data

Source: Capital Group, based on Morningstar data.

*Market share data as of September 30, 2020.

View exhibit methodology and underlying data

Source: Capital Group, based Morningstar data.

*Market share data as of September 30, 2020.

View exhibit methodology and underlying data

Source: Capital Group, based on Morningstar data.

*Market share data as of September 30, 2020.

View exhibit methodology and underlying data

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A record of higher returns, with less volatility

Our Series focuses on both building and preserving wealth ― resulting in a record of frequently capturing more upside with less downside relative to both its peers and the market.

10-year capture ratios vs. S&P Target Date Indexes

(as of December 31, 2019)

This is a multi-bar chart comparing the 10-year up and down capture ratios of the American Funds Target Date Retirement Series vs. the relevant Morningstar peer average. It shows that the American Funds Target Date Retirement Series has often outpaced both the market (as represented by the S&P Target Date Index) and its peers during periods of market strength. Yet it has also demonstrated less downside exposure vs. the market and its peers (save for the 2030 vintage, which had a smaller downcapture ratio than the market but slightly more than its peers).
Source: Capital Group, based on data from Morningstar.

A history of strong results

Our Series has also outpaced its peers over the long haul.


What sets us apart:

Active management at every step

A distinctive glide path

The Series changes both the mix and the types of equities and bonds held over time to pursue greater wealth with a degree of downside protection.

Bonds that can protect

Our fixed income strategies seek to provide diversification early in the glide path before shifting to a focus on income and preservation.

Equity that has excelled

The Series’ underlying equity-focused strategies have generated strong lifetime results in both up and down markets.

Manager flexibility

The selective use of flexible global and multi-asset underlying funds empower managers to adapt as opportunities and risks evolve.

A distinctive glide path

The Series changes both the mix and the types of equities and bonds held over time to pursue greater wealth with a degree of downside protection.

Equity that has excelled

The Series’ underlying equity-focused strategies have generated strong lifetime results in both up and down markets.

Bonds that can protect

Our fixed income strategies seek to provide diversification early in the glide path before shifting to a focus on income and preservation.

Manager flexibility

The selective use of flexible global and multi-asset underlying funds empower managers to adapt as opportunities and risks evolve.


Making a difference

Our Target Date Solutions Committee brings a diversity of experience and draws on the fundamental research and quantitative resources of the global Capital Group team.

The numbers speak for themselves

200+

years collective experience


Deep industry knowledge helps the Committee navigate difficult market environments.

100%

manager ownership


Each member of the Target Date Solutions Committee has personal ownership in the Series.

25

years average tenure


Capital Group focuses on the long term and seeks to retain the very best investment talent.

Data as of December 31, 2019.

Additional resources

Volatility resources

Learn more about our Series' Q2 results and the sources of its downside resilience.

The Capital Advantage®

Discover how Capital Group's approach to active management has helped it build and preserve participant wealth.

We help investors succeed

Learn more about Capital Group, its history of strong results, and how it puts participant needs first.

Explore our series

Compare us to the competition

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.

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.

Although the target date funds are managed for investors on a projected retirement date time frame, the 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. Investment professionals manage the portfolio, moving it from a more growth-oriented strategy to a more income-oriented focus as the target date gets closer. Investment professionals continue to manage each portfolio for approximately 30 years after it reaches its target date.

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.


Important investment disclosures

Figures shown are past results for Class R–6 shares and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely. View fund expense ratios and returns. Fund results shown are at net asset value with all distributions reinvested. For current information and month–end results, visit americanfundsretirement.com.

Class R-6 shares were first offered on May 1, 2009. Class R-6 share results prior to the date of first sale are hypothetical based on Class A share results without a sales charge, adjusted for typical estimated expenses. Please see each fund's prospectus for more information on specific expenses. We offer a range of share classes designed to meet the needs of retirement plan sponsors and participants. The different share classes incorporate varying levels of advisor compensation and service provider payments. Because Class R-6 shares do not include any recordkeeping payments, expenses are lower and results are higher. Other share classes that include recordkeeping costs have higher expenses and lower results than Class R-6. Investment allocations for funds of funds may not achieve fund objectives. There are expenses associated with the underlying funds in addition to fund-of-funds expenses. The funds’ risks are directly related to the risks of the underlying funds, as described herein.

Investing outside the United States involves risks, such as currency fluctuations, periods of illiquidity and price volatility, as more fully described in the prospectus. These risks may be heightened in connection with investments in developing countries. Small-company stocks entail additional risks, and they can fluctuate in price more than larger company stocks. The return of principal for bond funds and for funds with significant underlying bond holdings is not guaranteed. Fund shares are subject to the same interest rate, inflation and credit risks associated with the underlying bond holdings. Investments in mortgage-related securities involve additional risks, such as prepayment risk, as more fully described in the prospectus. Higher yielding, higher risk bonds can fluctuate in price more than investment-grade bonds, so investors should maintain a long-term perspective. While not directly correlated to changes in interest rates, the values of inflation-linked bonds generally fluctuate in response to changes in real interest rates and may experience greater losses than other debt securities with similar durations. Fund shares of U.S. Government Securities Fund are not guaranteed by the U.S. government. Investment results assume all distributions are reinvested and reflect applicable fees and expenses. When applicable, investment results reflect expense reimbursements, without which results would have been lower. Please see capitalgroup.com for more information.

Exhibit methodology and underlying data

Average excess return vs. Morningstar category averages: Returns are based on the funds’ average annual total returns (Class R-6 shares or equivalent lowest cost mutual fund share class at net asset value) within the applicable Morningstar categories. The Morningstar returns do not reflect the effects of sales charges, account fees or taxes. Investment results assume all distributions are reinvested and reflect applicable fees and expenses.

While American Funds Class R-6 shares do not include fees for advisor compensation and service provider payments, the share classes represented in the Morningstar category have varying fee structures and can include these and other fees and charges resulting in higher expenses and lower results. The categories include both active and passive target date funds, as well as those that are managed both ”to” and ”through” retirement. Approximately one-third of the funds within the 2000–2010 category have a target date of 2005. All target date funds began on February 1, 2007, except for the 2055 fund, which began on February 1, 2010, and the 2060 fund, which began on March 27, 2015.

Bear market is defined as a cumulative decline of S&P 500 Index of 20% or more from peak to trough; correction is defined as a cumulative decline of S&P 500 Index of 10% to 20% from peak to trough. Each vintage within the American Funds Target Date Retirement Series and peer series was compared to existing funds in the same Morningstar category. Each Morningstar category includes all share classes. Most recent bear market is presumptive from last S&P 500 high on February 19, 2020 through most recent market low on March 23, 2020. S&P 500 has not fallen below its March 23, 2020 low or recovered above its February 19, 2020 high as of June 30, 2020. Largest peers represent series with largest mutual fund assets under management as of December 31, 2019 and inception date prior to April 23, 2010. Missing datapoints reflect lack of peer funds in the Morningstar category with an existing American Funds Target Date Retirement Series fund. Peer funds in categories that do not feature an existing American Funds Target Date Retirement Series fund were excluded.

Underlying data information (Vintages)
Data used in the analysis is an average across seven individual bear market and correction periods. Figures shown represent the minimum, average, and maximum values for each vintage among the six peers.

Underlying data information (Downturns)
Data used in the analysis is an average across the individual funds in each peer series that correspond to an existing American Funds Target Date Retirement Series fund. Figures shown represent the minimum, average, and maximum values for each downturn among the six peers.

Capture ratios: Analysis is based on the funds’ average annual total returns (Class R-6 shares at net asset value) within the applicable Morningstar categories. The Morningstar category data does not reflect the effects of sales charges, account fees or taxes. Past results are not predictive of results in future periods. The Morningstar category average includes all share classes for the funds in the category. Investment results assume all distributions are reinvested and reflect applicable fees and expenses.

 

While American Funds Class R-6 shares do not include fees for advisor compensation and service provider payments, the share classes represented in the Morningstar category have varying fee structures and can include these and other fees and charges resulting in higher expenses and lower results. The categories include both active and passive target date funds, as well as those that are managed both ”to” and ”through” retirement. Approximately one-third of the funds within the 2000–2010 category have a target date of 2005. All target date funds began on February 1, 2007, except for the 2055 fund, which began on February 1, 2010, and the 2060 fund, which began on March 27, 2015.

 

The list of each fund’s Morningstar category can be found in the ”Morningstar categories” section below. The 2060 and 2055 funds are not shown because they lack a 10-year history. Up (down) capture ratio is the ratio of a fund’s return during periods when the index was up (down), divided by the return of the index during those periods. For example, an up capture ratio greater than 100 indicates the fund produced a higher return than the index during periods when the index was up. Conversely, during periods when the index was down, a down capture ratio greater than 100 indicates the fund produced a lower return than the index. Because the Morningstar category averages include funds managed both "through" and "to" retirement, we use the broad S&P Target Date Index in this exhibit. The American Funds Target Date Retirement Series is managed “through" retirement.

Morningstar categories
 

American Funds Target Date 2010

Morningstar Target Date 2000–2010

American Funds Target Date 2015

Morningstar Target Date 2015

American Funds Target Date 2020

Morningstar Target Date 2020

American Funds Target Date 2025

Morningstar Target Date 2025

American Funds Target Date 2030

Morningstar Target Date 2030

American Funds Target Date 2035

Morningstar Target Date 2035

American Funds Target Date 2040

Morningstar Target Date 2040

American Funds Target Date 2045

Morningstar Target Date 2045

American Funds Target Date 2050

Morningstar Target Date 2050

American Funds Target Date 2055

Morningstar Target Date 2055

American Funds Target Date 2060

Morningstar Target Date 2060+

A history of strong results:

 

Returns: All funds began on February 1, 2007, except for the 2055 fund, which began on February 1, 2010, and the 2060 fund, which began on March 27, 2015. Rankings are based on the funds’ average annual total returns (Class R-6 shares at net asset value) within the applicable Morningstar categories. The rankings do not reflect the effects of sales charges, account fees or taxes. Past results are not predictive of results in future periods. Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The Morningstar category average includes all share classes for the funds in the category. While American Funds R-6 shares do not include fees for advisor compensation and service provider payments, the share classes represented in the Morningstar category have varying fee structures and can include these and other fees and charges resulting in higher expenses.

 

For a list of each fund's Morningstar category, please see the "Morningstar categories" section. The category includes both active and passive target date funds, as well as those that are managed both "to" and "through“ retirement. Approximately one-third of the funds within the 2000-2010 category have a target date of 2005.

 

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. When applicable, investment results reflect expense reimbursements, without which results would have been lower.

 

Sharpe ratio: Sharpe ratio rankings calculated by Capital Group based on data obtained from Morningstar. Except for 10-year periods, all figures were calculated by Morningstar. 10-year Sharpe ratio was calculated by Capital Group based on data obtained from Morningstar. Sharpe ratio is calculated by using standard deviation and excess return to determine reward per unit of risk. The higher the Sharpe ratio, the better the portfolio’s historical risk-adjusted performance.

 

All funds began on February 1, 2007, except for the 2055 fund, which began on February 1, 2010, and the 2060 fund, which began on March 27, 2015. Rankings are based on the funds’ average annual total returns and volatility (Class R-6 shares at net asset value) within the applicable Morningstar categories. The rankings do not reflect the effects of sales charges, account fees or taxes. Past results are not predictive of results in future periods. Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The Morningstar category average includes all share classes for the funds in the category. While American Funds R-6 shares do not include fees for advisor compensation and service provider payments, the share classes represented in the Morningstar category have varying fee structures and can include these and other fees and charges resulting in higher expenses.

 

For a list of each fund's Morningstar category, please see the "Morningstar categories" section. The category includes both active and passive target date funds, as well as those that are managed both "to" and "through“ retirement. Approximately one-third of the funds within the 2000-2010 category have a target date of 2005.

 

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. When applicable, investment results reflect expense reimbursements, without which results would have been lower.


Index definitions

 

The S&P 500 Index is a market capitalization-weighted index based on the results of approximately 500 widely held common stocks. This index is unmanaged, and its results include reinvested dividends and/or distributions but do not reflect the effect of sales charges, commissions, account fees, expense or U.S. federal income taxes.

 

The S&P Target Date® Series comprises 11 multi-asset class indices, each corresponding to a particular target retirement date. Each index provides varying levels of exposure to equities and fixed income. Each target date allocation is created and retired according to a pre-determined schedule related to the respective target date.


Source attribution

 

The S&P 500® and S&P Target Date® Series are products of S&P Dow Jones Indices LLC and/or its affiliates and have been licensed for use by Capital Group. Copyright © 2020 S&P Dow Jones Indices LLC, a division of S&P Global, and/or its affiliates. All rights reserved. Redistribution or reproduction in whole or in part is prohibited without written permission of S&P Dow Jones Indices LLC.

 

Morningstar data © 2020 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

 

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