How target-date managers weight equity along a fund's glide path has had the greatest bearing on performance during the bull market.
Over the past seven years, a 1-percentage point increase in equity exposure has yielded a 6-basis point annualized improvement in performance, according to the findings in Morningstar's 2017 Target-Date Fund Landscape report.
Since 2012, managers have been increasing retirement investors' equity exposure. The industry average equity exposure for a 2020 vintage—held by those knocking on retirement's door—is 51.2 percent, a 5 percent increase over the past five years.
Recommended For You
Actively managed funds do not deviate in their equity risk strategies from passively managed funds, according to Morningstar, though there is some dispersion in how fixed-income is managed between the two.
Of course, overexposure to equities can come back to haunt investors in down markets. Here is a look at how the top five TDF fund managers weight equities in their 2020 vintage funds.
1. Vanguard Target Retirement 2020
Vanguard is top banana in the $880 billion target-date market, with $280 billion held across its funds. The total equity exposure in the 2020 vintage is 56.1 percent, held in two of the firm's proprietary index funds.
The 2020 vintage holds $29.9 billion in assets.
2. Fidelity Freedom 2020
All told, Fidelity manages $193 billion across its target-date lines. The Fidelity Freedom 2020 fund's objective is to seek "high total return" until the retirement date, according to its prospectus.
Using an active strategy, the fund holds 41.3 percent in proprietary domestic equity funds, about 22 percent in proprietary international equity funds, and 7.8 percent in a proprietary emerging market fund—putting the total equity exposure above 71 percent.
The 2020 vintage has about $12.5 billion in assets.
3. T. Rowe Price Retirement 2020
T. Rowe Price manages $148 billion across its target-date series.
The 2020 vintage holds 39.7 percent in domestic equity, and 19.7 in foreign equity, for a total of 59.4 percent. The fund blends proprietary active and passively managed funds.
4. American Funds Target Retirement 2020
American Funds manages $53.6 billion across its target-date series and saw strong in-flows last year.
The 2020 vintage holds 35.1 percent in domestic equities and 15.5 percent in foreign equities, for a total of 50.6 percent, just under the industry average.
The fund currently holds 8.8 percent of its assets in IT companies, the highest equity concentration by industry. All told the 2020 vintage has $9.7 billion in assets.
5. JP Morgan SmartRetirement 2020
JP Morgan manages $44.7 billion in TDF assets. Its 2020 SmartRetirement vintage held $7.1 billion in assets, spread across 27 different mutual funds, as of the end of March.
The 2020 vintage holds 46.4 percent in equity, below the industry average and the lowest equity weighting among the five largest fund providers.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
