First, we select the top trending category from more than 200 categories listed on MutualFunds.com based on the percentage increase in monthly viewership. Then we choose the top three funds with the highest one-year trailing total returns from the top trending category. To ensure a fund’s quality and staying power, we only look at mutual funds with a minimum of $250 million in assets and a track record of at least three years. We also remove mutual funds closed to new investors and not available for investment outside registered accounts such as retirement or 529s.
In this edition, we take a closer look at trending Target Date 2030 Funds for investors.
Target date retirement funds make it easy for anyone to save for retirement using a single fund. These funds seek to maximize capital appreciation in the early years, reduce risk over time, and switch to maximizing income during retirement years. That way, investors don’t need to worry about adjusting their portfolios or paying a financial advisor to change their portfolios over time.
Our breakdown of each fund includes vital aspects, such as one-year performance, performance from inception, fund expenses, investment strategy, and the fund’s management team’s profile, to give you an overview of how these funds hold up against their peers.
Be sure to check out the Target Date 2030 Funds page to learn more.
Trending Funds
The number one fund on this week’s list is the Fidelity Advisor Freedom Blend 2030 Fund (FJAMX). It provided an exceptional trailing one-year total return of 12.88% with a 0.77% expense ratio and 0.95% yield, making it the most expensive and lowest yielding fund on the list.
The fund seeks a high total return until the 2030 target retirement date. After that, the fund’s objective will be to seek high current income and capital appreciation as a secondary objective. It primarily invests in a combination of Fidelity U.S. equity funds, international equity funds, bond funds, and short-term funds, including active and passive funds.
Andrew J. Dierdorf and Brett F. Sumsion, CFA, MBA, have co-managed the fund since August 2018. Mr. Dierdorf has nearly 30 years of industry experience with about $369 billion in assets under management. Meanwhile, Mr. Sumsion has 21 years of industry experience with a similar value of assets under management.
The fund’s portfolio consists of 33% U.S. equities, 30% international equities, and 31% fixed-income investments. These securities blend value and growth opportunities with an average market capitalization of $68 billion, placing it squarely in the large-cap category.
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Source: BarChart.com
2. TIAA-CREF Lifecycle 2030 Advisor Fund (TCHHX)
The TIAA-CREF Lifecycle 2030 Advisor Fund (TCHHX) comes in second place. It generated a one-year trailing return of 12.55% with a 0.5% expense ratio and a 2.44% yield, making it the lowest cost and highest yielding fund on the list.
The fund seeks to maximize risk-adjusted outcomes by investing in a diversified portfolio of equity, fixed income, and direct real estate investments. The fund managers adjust asset allocation to balance market, inflation, and longevity risk, using a diverse mix of asset classes and investment styles to generate alpha and beta.
The fund is managed by John Cunniff, CFA, Hans Erickson, CFA, and Stephen G. Sedmak, CFA, who have an average tenure of more than 11 years. Mr. Cunniff is the primary portfolio manager for target date multi-asset strategies and has 27 years of industry experience.
The fund’s portfolio consists of 40% U.S. equities, 30% fixed income, 21% international equities, and 4% direct real estate investments. The fund’s exposure to direct commercial real estate investments sets it apart from many other target-date retirement funds.
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Source: BarChart.com
3. Wells Fargo Target 2030 Fund (STHRX)
The Wells Fargo Target 2030 Fund (STHRX) rounds out the list. It has a one-year trailing return of 12.01% with a 0.6% expense ratio and 1.56% yield, putting it in the middle of the road.
The fund uses a broad investment universe to provide investors with diversification. In particular, the fund invests in factor-based equity and fixed-income indexes that maximize risk-adjusted returns.
The fund is managed by Kandrap R. Acharya, Petros N. Bocray, and Christian L. Chan, who have been with the fund for over four years. Mr. Chan has the most industry experience at 17 years, serving as Senior Portfolio Manager for Wells Capital Management.
The fund’s portfolio consists of 40% fixed-income securities, 38% U.S. equities, and 22% international equities. Like the first fund on the list, the portfolio is focused on a mix of value and growth opportunities with an average market capitalization of about $48 billion.
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Source: BarChart.com
The Bottom Line
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Note: Data as of November 24, 2021.