Does Your Target Date Series Have “Fantastic” Underlying Funds? | Capital Group

Defined Contribution Insights

November 2019

Does Your Target Date Series Have “Terrific” Underlying Funds?

A target date series is only as good as its underlying funds. This infographic illustrates just how “Terrific” the underlying funds of the American Funds Target Date Retirement Series℠ have been.

  • Rigorously screened — Morningstar applied strict criteria to more than 8,000 funds to create its latest list of “Terrific” funds. Only 43 funds made the grade, and 13 of those were American Funds.
  • The most recognized funds — All 13 of our “Terrific” funds are in our target date series — giving our series more recognized underlying funds than any other.
  • Consistently Exceptional — In all six years of Morningstar’s list, at least half of the underlying equity funds in our target date series have been deemed exceptional.

Source: Morningstar, Fund Spy, "Kinnel: 43 Fantastic Funds," September 2017. Morningstar’s criteria for the Fantastic lists included: cheapest quintile of category, manager investment of more than $1 million in the fund, Morningstar Risk rating below the High level, Morningstar Analyst Rating of Bronze or higher, Parent rating of Positive, and returns above the fund’s benchmark over the manager’s tenure. Fantastic criteria has changed over the years. Visit for more details.

1Not all 13 funds listed in the “Fantastic 43” 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 portfolio is composed of a mix of underlying funds and is subject to the risks and returns of those funds. Underlying funds may be added or removed during the year. Although the target date portfolios 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. 

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.