Considerations for evaluating hybrid annuity TDFs
Given the increased attention on target-date funds (TDFs) and retirement income sufficiency, a new investment product has emerged that combines TDFs with annuities. Our analysis shows that hybrid annuity TDFs can provide investment merit, especially for participants who prioritize longevity risk mitigation. Beyond investment merit, there are usability, acceptability, implementation, and feasibility considerations.
"Hybrid annuity target-date funds: Assessing investment merit and suitability for participants"
Performance of key Vanguard index funds
Fund name(Inception date) |
Q3 2023
|
Q4 2023
|
Q1 2024
|
Q2 2024
|
1 year
|
|
|---|---|---|---|---|---|---|
Vanguard Total Bond Market Index Fund (09/18/1995) |
-3.08% | 6.69% | -0.79% |
0.18% | 2.77% | |
Vanguard Total International Bond Index Fund (05/31/2013) |
-1.50% | 6.54% | 0.10% | -0.58% | 4.43% | |
Vanguard Total Stock Market Index Fund (07/07/1997) |
-3.30% | 12.17% | 10.00% | 3.25% | 23.20% | |
Vanguard Total International Stock Index Fund (11/29/2010) |
-4.01% | 9.98% | 4.32% | 0.80% | 11% | |
Vanguard Short-Term Inflation-Protected Securities Index Fund (10/17/2012) |
0.43% | 2.55% | 0.85% | 1.43% | 5.35% |
Source of performance figures: Vanguard, Institutional share class, as of June 30, 2024.
The performance data shown represent past performance, which is not a guarantee of future results. Investment returns and principal value will fluctuate, so investors' shares, when sold, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data cited. For performance data current to the most recent month-end, visit our website at institutional.vanguard.com. Standard performance of the funds can be located in the Quarterly Review Appendix.
Investments in 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 target-date funds is not guaranteed at any time, including on or after the target date.
For more information about Vanguard funds, visit vanguard.com to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing.
All investing is subject to risk, including the possible loss of the money you invest.