American Funds Trgt Date Ret 2050 AAALTX

Fund Research and Analysis

by John Coumarianos

American Funds Target Date Retirement 2050 is a fine one-fund solution for retirement savings.

Of the 38 funds in the target-date 2050-plus category, this one's 81% exposure to stocks is among the lowest in the category. Lest that seem tame, however, more than one third of that exposure is to foreign stocks. Read more

Kudos

One of the cheapest broker-sold target-date funds around.

American boasts expertise across a range of investing disciplines, and a huge analyst staff.

Modest costs. Read more

Risks

Owns every one of American's equity funds, resulting in overlap and potentially diluting returns.

Some of the underlying holdings are quite portly, and inflows here could lead to asset bloat issues.

Minimal exposure to small- and mid-cap stocks. Read more

Strategy

Like other target-date funds, this fund shifts its assets into bonds and cash from equities over time. It owns all 15 of American's equity funds (which often hold double-digit cash stakes), as well as a few of the shop's bond funds. Read more

Management

American's target-date funds are overseen by five of its more experienced portfolio managers. The team boasts an average of 21 years' experience with American Funds' advisor, Capital Research & Management. Read more

Inside Scoop

This is one of nine target-date funds introduced by American Funds. It owns all of the firm's equity offerings, as well as a smattering of its bond funds. Like its rivals, this fund gets more conservative as it approaches its target date. Read more

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