- In this report
- Overview
- How aggressive is your target fund?
How aggressive is your target fund?
Target-date fund returns are mostly a function of asset allocation—the more they invest in stocks, the more volatile the returns. Since most employers have only one fund family's offerings in their 401(k) plans, it's important to square your risk tolerance with your available choices. Below, the largest target-date families are listed from most aggressive to most conservative.
| Target-date fund family | Stock allocation | 1-year return | ||||||
|---|---|---|---|---|---|---|---|---|
| Year 2040 | 2030 | 2020 | 2010 | Year 2040 | 2030 | 2020 | 2010 | |
| Alliance Bernstein | 93% | 89% | 79% | 65% | -30% | -29% | -26% | -22% |
| Oppenheimer Transition | 87 | 83 | 81 | 63 | -30 | -32 | -33 | -33 |
| T. Rowe Price Retirement | 87 | 84 | 73 | 58 | -24 | -23 | -19 | -14 |
| American Funds | 80 | 78 | 71 | 57 | -23 | -22 | -20 | -17 |
| John Hancock Lifecycle | 91 | 90 | 76 | 55 | -28 | -27 | -23 | -18 |
| Vanguard Target Retirement | 89 | 84 | 69 | 52 | -23 | -22 | -17 | -12 |
| Fidelity Freedom | 80 | 76 | 64 | 50 | -27 | -25 | -21 | -15 |
| Principal LifeTime | 82 | 75 | 66 | 53 | -28 | -26 | -24 | -21 |
| American Century Livestrong | 79 | 72 | 60 | 58* | -23 | -20 | -15 | -14* |
| Schwab Target | 67 | 60 | 55 | 45 | -20 | -18 | -17 | -15 |
| AIM Independence | 83 | 71 | 50 | 28 | -22 | -20 | -17 | -12 |
Source: Morningstar, as of June 30, 2009. * 2015 target date.
This article appeared in Consumer Reports Money Adviser.
Posted: August 2009 — Consumer Reports Money Adviser issue: September 2009
