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

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Defined Contribution Insights

August 2017

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

A target date series is only as good as its underlying funds. This infographic illustrates just how “Great” 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 “Great” funds. Only 38 funds made the grade, and 11 of those were American Funds.
  • The most recognized funds — All 11 of our “Great” 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, FundInvestor, June 2017. Morningstar’s criteria for the Great/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. Great/Fantastic criteria has changed over the years. Visit americanfunds.com/advisor/news/morningstar-fantastic.html for more details.

1Not all 11 funds listed in the “Great 38” are in each target date fund. Underlying funds may change over time.

Image provides an overview of how many American Funds made Morningstar’s “Great” list, explains its rigourous screening process, and our funds’ exceptional track record of Morningstar recognition.


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 or the collective investment trust's Characteristics statement, which can be obtained from a financial professional, Capital or your relationship manager, and should be read carefully before investing. 

Each target date fund is composed of a mix of the American Funds and is subject to the risks and returns of the underlying funds. Underlying funds may be added or removed during the year. Although the target date funds are managed for investors on a projected retirement date time frame, the funds' allocation strategy does not guarantee that investors' retirement goals will be met. The target date is the year in which an investor is assumed to retire and begin taking withdrawals. American Funds investment professionals manage the target date fund's portfolio, moving it from a more growth-oriented strategy to a more income-oriented focus as the fund gets closer to its target date. Investment professionals continue to manage each fund for 30 years after it reaches its target date.