Target Date Fund Overview (pdf)

Target date funds (TDFs) are a popular investment choice for retirement savers. They are professionally managed,cost-effective, diversified among equities and bonds, and rebalanced over time as the fund approaches and passesits target date. ThisQuick Factsexplores some of the data around TDFs and the features that make them so Target Date Fund Assets Surpassed $4.8 Trillion in 2025Billions of dollars, year-end Key TDF Features Are Diversification and RebalancingPercentage of total holdings by underlying investment category, year-end 2025 Glide Path That Adjusts the Portfolio Over Time A key feature of a TDF is its “glide path.” This is the plan that the fund will follow to rebalance its portfolio as itapproaches and passes its specified target date, which is usually included in the fund’s name. For the averagemutual fund TDF, its glide path puts most of its assets (80% or more) in stocks when the fund is far from its target There is, however, no one single glide path. Reflecting different views on how best to accommodate retirementsavers, glide paths vary between fund providers. Some choose glide paths that set early allocations to stocks(e.g., 25 years before the fund’s target retirement date) to nearly 100% of the fund’s assets, while others choosesomewhat lower allocations. Glide paths also differ widely as they reach their target date—72% of mutual fund TDFs Offer Cost-Effective Access to Diversified PortfoliosTDFs are typically funds of funds, meaning they primarily hold other funds in their portfolios …from within the same investment complex(i.e., affiliated funds)…