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Vanguard - Target Retirement Funds Overview
Target Retirement

Target Retirement Funds

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The benefits of Vanguard Target Retirement Funds

  • Delivers portfolio efficiency with a 100% index approach.
  • Maximizes diversification and fiduciary comfort; minimizes cost and oversight.
  • Helps mitigate security and sector risk.
  • Driven by stringent, ongoing governance and oversight by tenured investment professionals.
 
  • Minimizes manager risk and capacity constraints, therefore, it's widely chosen as a plan's QDIA.
  • Offers transparency, for greater participant understanding.
  • Provides competitive costs (expense ratios from 0.16% to 0.18%—versus 0.91% industry average.*)

* Morningstar, Analyst Rating for Target Date Series report, as of year-end 2013.

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The Vanguard glide path: Risk control through passive strategies

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Notes:

  • Investments in Target Retirement Funds and target-date funds are subject to the risks of their underlying funds. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative ones based on its target date. An investment in a Target Retirement Fund or a target-date fund is not guaranteed at any time, including on or after the target date.
  • The Morningstar Analyst Rating for Target-Date Series mutual funds is not a credit or risk rating. In February 2013, Vanguard Target Retirement Funds received a Gold rating for 2012. The Morningstar Analyst Rating for Target-Date Series mutual funds reflects a subjective evaluation of quantitative and qualitative factors performed by mutual fund analysts of Morningstar Inc. and represents a summary expression of forward-looking analysis of target-date mutual funds. The Morningstar Analyst Rating is assigned on a five-tier scale running from Gold, Silver, Bronze, Neutral, and Negative. Funds are evaluated on five key pillars: process, price, performance, people, and parent. A Gold rating means that the series has distinguished itself across all five pillars. It expresses an expectation that the funds, in a series as a whole, collectively will outperform their relevant performance benchmarks and/or peer groups within the context of the level of risk taken over the long term. The Silver rating applies to funds with notable advantages across several, but perhaps not all, of the five pillars—strengths that give the analysts a high level of conviction. A Bronze rating applies to funds with advantages that outweigh the disadvantages across the five pillars and with sufficient level of analyst conviction to warrant a positive rating. A Neutral rating is for funds that aren’t likely to deliver standout returns but also aren’t likely to significantly underperform, according to the analysts, and a Negative rating is reserved for funds that have at least one flaw likely to significantly hamper future performance and that are considered by analysts an inferior offering to their peers.

    The Morningstar Analyst Rating for Target-Date Series mutual funds should not be used as the sole basis in evaluating a target-date mutual fund series. This Morningstar Analyst Rating is based on Morningstar’s current expectations about future events; therefore, in no way should the rating be considered as a guarantee of favorable performance. All Morningstar Analyst Ratings involve unknown risks and uncertainties, which may cause Morningstar's expectations not to occur or to differ significantly from what was expected.

    The Morningstar Analyst Rating for the Target-Date Series is distinct from the Analyst Rating for individual mutual funds and mutual fund families. A fund in a target-date series may have analyst ratings for both its series and a particular fund, and in some cases those ratings may not be identical. While target-date series funds are typically evaluated by Morningstar once a year, there is no set time-frame for their evaluation. For additional information about the Morningstar Analyst Rating for Target-Date Series mutual funds, including its methodology, visit corporate.morningstar.com.
  • Vanguard Target Retirement Funds offer the simplicity of an index-oriented, well-diversified portfolio that is strategic and straightforward in its approach. The funds are composed of only three to five underlying funds (primarily index funds) and follow an easy-to-understand asset allocation glide path. Underlying this simplicity is Vanguard's deep investment expertise, knowledge of the capital markets, and insights into participant behavior.
  • All investing is subject to risk, including the possible loss of the money you invest.
  • Bond funds are subject to the risk that an issuer will fail to make payments on time, and that bond prices will decline because of rising interest rates or negative perceptions of an issuer's ability to make payments.
  • Investments in stocks or bonds issued by non-U.S. companies are subject to risks including country/regional risk and currency risk.
  • Diversification does not ensure a profit or protect against a loss.

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Vanguard's approach to target-date funds

Vanguard Target Retirement Funds earn Morningstar gold

 

 

 

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