At T. Rowe Price, we believe that investment success for multi-asset solutions comes from balancing market, inflation, and longevity risks. This principle is at the core of our target date philosophy—and serves as the foundation for every decision we make to seek the best possible outcomes for our clients.
Three Differentiators to Help Support Lifetime Income
Our Best Thinking, Translated Into Solutions
Collaboration between our portfolio management and global research teams underlies our history of leadership.
- Over 25 years of offering asset allocation solutions to meet client objectives
- Pioneer in offering target date solutions since 2002
- Commitment to dedicated multi-asset research and development
We've Added Value for Our Clients Over Time
Over 95% of our Retirement Funds with a 10-year track record beat their 10-year Lipper average as of 9/30/191
For all 11 Retirement Funds with a 10-year track record, tactical allocation added value in 87% or more of all rolling five-year periods and in 100% of rolling 10-year periods since inception2
T. Rowe Price Retirement Funds recognized with 15 2018 Thomson Reuters Lipper Fund Awards for strong risk-adjusted performance across 3-, 5-, or 10-year periods3
Active portfolio management added excess returns in 100% of rolling 10-year periods since inception for each T. Rowe Price Retirement Fund2
Strong Performance and Risk-Adjusted Outcomes
Our Retirement Funds have regularly outperformed across rolling 3-, 5-, and 10-year periods since inception.4
As of September 30, 2019
Past performance cannot guarantee future results.
Results will vary for other periods, and all funds are subject to market risk.
1 36 of our 40 Retirement Funds (Investor, Advisor, and R Class) had a 10-year track record as of 9/30/19 (includes all share classes). 35 of these 36 funds beat their Lipper average for the 10-year period. 29 of 40, 38 of 39, and 38 of 39 of the Retirement Funds outperformed their Lipper average for the 1-, 3-, and 5-year periods ended 9/30/19, respectively. Calculations are based on cumulative total return. Not all funds outperformed for all periods. (Source for data: Lipper Inc.)
2 We examined the performance of all of our Retirement Funds (RFs) that had at least 10-year track records as of December 31, 2018. To quantify the total value added by T. Rowe Price’s target date implementation, RF returns in each rolling period were compared with combined index benchmarks created by T. Rowe Price that closely mirror the strategic allocations of each RF as it moves along its glide path. To account for the differing inception dates (and thus, longevity) of each RF, these averages were time-weighted—that is, the results are based on the percentage of the total performance periods in each time frame provided by each RF. To provide a summary of the effectiveness of T. Rowe Price’s target date process, we calculated performance averages for all 11 RFs across all 3 levels of our analysis (total value added, tactical allocation, and security selection). To account for the differing longevity of each RF, these averages were time-weighted—the results are based on the percentage of the total performance periods in each time frame provided by each RF. To quantify the value added by T. Rowe Price’s tactical allocation process, RF returns calculated using each fund’s fixed strategic asset allocation were compared with the returns based on actual allocation weights. To quantify the value added by security selection, excess returns—net of fees and other costs—were calculated for the underlying funds in each RF. Returns were calculated relative to each underlying fund’s asset class, sector, or style benchmark. Returns were then aggregated to show the total excess returns for each RF. To quantify the total value added by T. Rowe Price’s target date implementation, RF returns in each rolling period were compared with combined index benchmarks created by T. Rowe Price that closely mirror the strategic allocations of each RF as it moves along its glide path. T. Rowe Price uses combined index benchmarks to measure the relative performance of the firm’s Retirement Funds. These benchmarks are constructed from 4 indexes that reflect the broad asset classes in the underlying RF portfolios: U.S. Equity: The Russell 3000 Index, Non-U.S. Equity: The MSCI All Country World Index ex USA, Fixed Income: The Bloomberg Barclays U.S. Aggregate Bond Index, and Inflation Focused Fixed Income: The Bloomberg Barclays U.S. 1–5 Year Treasury TIPS Index. The combined benchmarks mirror the strategic allocations for each fund, isolating the contributions made by tactical allocation and security selection. This means the weights assigned to different asset classes in the benchmarks will change over time as the funds move along their glide paths. The combined index benchmarks for the 11 funds included in our analysis can be found at troweprice.com/activeworks/targetdate.
3 For Lipper Best Individual Funds, the calculation periods extend over 36, 60, and 120 months. The highest Lipper Leader for Consistent Return (Effective Return) value within each eligible classification determines the fund classification winner over 3, 5, or 10 years as of the period-end and no other time periods. Only one share class (the one with the best Lipper Leader score) is used for each portfolio in determining asset class and overall awards. Only eligible investors may purchase Institutional shares. See a prospectus for eligibility requirements and other available share classes.
4 Figures reflect the aggregate performance of the 11 Retirement Funds (RF) with a 10-year track record (Retirement 2005 through Retirement 2055 Funds).
5 Of the 11 Retirement Funds with a 10-year track record (the Retirement 2005 through 2055 Funds), 10 of 11, 10 of 11, and 10 of 11 funds were in the top quartile for each of the 3-, 5-, and 10-year periods ended September 30, 2019. See page 9 for additional ranking information.
6 T. Rowe Price has created combined index performance benchmarks for its Retirement Funds. These benchmarks are constructed from 4 indexes that reflect the broad asset classes in the underlying RF portfolios: U.S. Equity represented by the Russell 3000 Index, Non-U.S. Equity represented by the MSCI All Country World Index ex USA, Fixed Income represented by the Bloomberg Barclays U.S. Aggregate Bond Index, and Inflation Focused Fixed Income represented by the Bloomberg Barclays 1–5 Year TIPS Index.
7 Sharpe ratio is a measure of excess return per unit of risk. It measures return above or below the risk-free rate (T-bills), per unit of risk taken (portfolio’s standard deviation).
Source for Lipper Data: Lipper Inc.
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 funds’ allocations among a broad range of underlying T. Rowe Price stock and bond funds will (with the exception of the Retirement Balanced Fund) change over time. The funds (other than the Retirement Balanced Fund) 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 lumpsum 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.
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