Asset Allocation

T. Rowe Price’s Strategic Investing Approach Has Benefited Our Target Date Funds

Discipline has brought long‑term rewards for clients.

Key Points

  • T. Rowe Price examined 11 of our U.S. Retirement Funds (RFs) with at least 10‑year records to quantify the value added by our strategic investing approach.1
  • On average, the 11 funds outperformed their benchmarks in 83% of rolling five‑year periods and in every rolling 10‑year period since inception, net of fees.
  • T. Rowe Price seeks to add value for clients at multiple levels, including glide‑path design, long‑term diversification, and our strategic investing approach.
  • We believe our strategic investing approach―including tactical allocation and active management of the underlying strategies―can enhance retirement outcomes.

Our Approach to Strategic Investing

T. Rowe Price’s target date process seeks to improve outcomes for our target date clients at multiple levels—via glide‑path design, long‑term diversification, tactical asset allocation, and our strategic investing approach. We believe the value added by our target date implementation can meaningfully enhance retirement outcomes for investors.

Bottom‑up fundamental research is at the core of how we manage the underlying strategies in our target date funds. That means that over 430 of our investment professionals go beyond the numbers by visiting senior corporate executives in their offices, touring their companies, and checking reality on the ground with suppliers and customers.2 This enables them to ask the right questions to get a deeper understanding of where a company stands and where they think it could go in the future.

Our target date managers, backed by our committee of asset allocation experts from across multi‑asset, equity, and fixed income, seek to get ahead of change by identifying attractive near‑term asset valuations and using prudent tactical allocation adjustments to take advantage of those potential opportunities.

Experience has been a critical component of our success as well. Our skilled portfolio managers have deep experience—an average of 23 years in the industry and 18 years with T. Rowe Price.3 Significantly, many of our analysts go on to become portfolio managers, which we believe creates a strong foundation on behalf of our clients.

Call 1‑800‑225‑5132 to request a prospectus or summary prospectus; each includes investment objectives, risks, fees, expenses, and other information you should read and consider carefully before investing.

1All funds are subject to market risk, including possible loss of principal. For more information on the T. Rowe Price funds used in this study, please visit troweprice.com/complete-target-date-study.
2
Investment staff as of December 31, 2019. Includes 106 portfolio managers, 26 associate portfolio managers, 172 investment analysts, 42 associate analysts, 15 multi‑asset specialists, 15 specialty analysts, 4 economists, 32 traders, and 22 senior managers.
3As of December 31, 2019.

Additional Disclosures

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Information has been obtained from sources believed to be reliable, but J.P. Morgan does not warrant its completeness or accuracy. The index is used with permission. The Index may not be copied, used, or distributed without J.P. Morgan’s prior written approval. Copyright © 2020, J.P. Morgan Chase & Co. All rights reserved.

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Important Information

The principal value of the Retirement Funds is not guaranteed at any time, including at or after the target date, which is the approximate year an investor plans to retire (assumed to be age 65) and likely stop making new investments in the fund. If an investor plans to retire significantly earlier or later than age 65, the funds may not be an appropriate investment even if the investor is retiring on or near the target date. The fundsʼ allocations among a broad range of underlying T. Rowe Price stock and bond funds will change over time. The funds emphasize potential capital appreciation during the early phases of retirement asset accumulation, balance the need for appreciation with the need for income as retirement approaches, and focus on supporting an income stream over a long‑term postretirement withdrawal horizon. The funds are not designed for a lump‑sum redemption at the target date and do not guarantee a particular level of income. The funds maintain a substantial allocation to equities both prior to and after the target date, which can result in greater volatility over shorter time horizons.

This material is provided for informational purposes only and is not intended to be investment advice or a recommendation to take any particular investment action. The views contained herein are those of the authors as of April 2020 and are subject to change without notice; these views may differ from those of other T. Rowe Price associates.

This information is not intended to reflect a current or past recommendation, investment advice of any kind, or a solicitation of an offer to buy or sell any securities or investment services. The opinions and commentary provided do not take into account the investment objectives or financial situation of any particular investor or class of investor. Investors will need to consider their own circumstances before making an investment decision.

Information contained herein is based upon sources we consider to be reliable; we do not, however, guarantee its accuracy.

Past performance is not a reliable indicator of future performance. All investments are subject to market risk, including the possible loss of principal. All charts and tables are shown for illustrative purposes only.

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