Investing insights

A look back on 20 years of Vanguard Target Retirement Funds

December 06, 2023

What if TDFs never existed video

Video length: 1:44

A mountain chart depicting the growth in TDF assets under management (AUM), along the y-axis, from 2005 to 2023, along the x-axis, based on data from Vanguard, Morningstar, and company public filings from Vanguard’s top competitors. Of the $3.4 trillion in AUM from participants using a TDF in their defined contribution plan, Vanguard Target Retirement Funds account for $1.19 trillion in AUM.
A line chart with three lines showing that average asset allocation trends have become more age appropriate since 2005. Percentages allocated to equities is shown along the y-axis, and the age of investors is shown along the x-axis. In 2005, the average equity weighting for an investor under 25 was less than 50%. That number was closer to 80% in 2010 and reached almost 90% in 2022.
A box-and-whisker chart displaying the lower dispersion in five-year annualized total returns for professionally managed strategies, when compared with accounts of all Vanguard defined contribution plan participants. Single target-date funds had the least dispersion, with returns ranging between 3.1% and 5.3%. Managed account returns ranged between 3.4% and 7.1%. Single balanced funds ranged between 2.4% and 6.0%. The category for all other participants experienced the greatest amount of dispersion, with returns ranging between 1.2% and 8.8%.
A combination chart with a line depicting a downward slope in Vanguard’s weighted expense ratio, shown on the left y-axis, from 2003 to 2022, shown on the x-axis. The current expense ratio is 0.07%, down from 0.23% in 2003. Bars depict the index-based market share, shown on the right y-axis, of TDF assets from 2003 to 2002. Vanguard held 60% of all index-based TDF assets as of December 31, 2022.
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