Skip to Content
Fund Spy

American Funds Target Date Retirement Series

This is a stalwart target-date series.

The following is our latest Fund Analyst Report for American Funds Target Date Retirement series. Morningstar Premium Members have access to full analyst reports such as this for more than 1,000 of the largest and best mutual funds. Not a Premium Member? Gain full access to our analyst reports and advanced tools immediately when you try Morningstar Premium free for 14 days.

American Funds Target Date Retirement series features a star-studded cast of underlying funds, and Capital Group's commitment to boosting its asset-allocation resources gives us confidence the series can continue to deliver for shareholders over the long term. It continues to earn a Morningstar Analyst Rating of Silver for its cheapest share classes and Bronze or Neutral ratings for its more expensive options. 

The series' underlying funds are arguably the most impressive among target-date strategies. About 85% of assets are in underlying funds that are rated Gold or Silver. Although the Gold-rated funds are mostly equity funds, the fixed-income funds do an excellent job protecting against equity market drawdowns and serve their role in this series well. In the first quarter of 2020, for example, American Funds Bond Fund of America gained 3.44%, edging past its benchmark Bloomberg Barclays U.S. Aggregate Bond Index during a period when shareholders could use all the protection they could get. Many fixed-income funds try to outperform their benchmarks by overweighting credit, which leads to worse performance during equity market stress, but thankfully that is not the case here. 

The bond funds' resilience is particularly important because the glide path typically holds more equities than most peers, though the series also benefits from large cash stakes and a bias toward high-quality firms during downturns. Over the long term, this has contributed to the series' stellar results. The average 10-year category rank of its R6 share classes was third as of Dec. 31, 2020, the highest of any target-date series. 

In January 2020, Capital Group revamped the team providing oversight of the series, and Michelle Black, formerly of the firm's private wealth group, was named as chair. Four additional hires were made to further round out the team, and fixed-income portfolio manager Shannon Ward was added to the committee. The added allocation resources have led to more-robust modeling and top-down analysis. Although it hasn't led to any significant changes, it's a strong foundation for future research efforts.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.