Target Date

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

Key Insights

  • 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 96% 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.


To demonstrate that T. Rowe Price’s target date investment process historically has created value for our clients, we conducted a rigorous study of the performance of all of our RFs that had at least 10‑year track records as of December 31, 2022 (Figure 1). These 11 RFs held virtually all (more than 96%) of the RF assets managed by the firm as of that date.2

We examined fund performance at three different levels to quantify the following:

1. The value added by T. Rowe Price’s tactical allocation process. Returns were calculated using each underlying fund's style-specific benchmark.3

2. The value added by security selection. Excess returns—net of fees and other costs—were calculated for the underlying funds in each RF relative to each underlying fund’s style benchmark. These fund‑level returns were then aggregated to show the total excess returns achieved by each RF.

3. The total value added by T. Rowe Price’s implementation. RF returns were compared with a family of target date indexes created by Standard & Poor's, which reflect “consensus” strategic asset allocations and glide paths for the industry as a whole based on an annual survey of reported portfolio holdings.

(Fig. 1) Retirement Funds Included in Our Performance Study
Retirement Funds Included in Our Performance Study

Source: T. Rowe Price.

Note that past performance data throughout this material are not reliable indicators of future performance.

For each level of fund performance, two measures were calculated:

  • Active success rates: The percentage of total rolling periods in which the RF added value at the performance level being measured.
  • Excess returns: The value added by each RF at the performance level being measured. Excess returns were calculated for each rolling period and then averaged across all the periods in each time frame.

T. Rowe Price believes strongly that longer time horizons provide the most meaningful measures of target date implementation, as they smooth out the effects of shorter‑term factors that can produce a distorted picture of relative performance. Accordingly, our analysis focused primarily on performance over rolling 5- and 10‑year periods, rolled monthly.4

To provide a summary of the effectiveness of T. Rowe Price’s target date process, we also calculated performance averages for all 11 RFs across all three 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.

Study Results

By and large, the time‑weighted averages reflect the same results as for the individual Retirement Funds: The total value added by T. Rowe Price’s implementation and the contributions made by tactical asset allocation and security selection were all positive and relatively stable across different time periods (Figures 2 and 3).

(Fig. 2) Time‑Weighted Average Active Success Rates for T. Rowe Price Retirement Funds

Fund Inceptions Through December 31, 2022

Time‑Weighted Average Active Success Rates for T. Rowe Price Retirement Funds
(Fig. 3) Time‑Weighted Average Annualized Value Added (in Basis Points) for T. Rowe Price Retirement Funds

Fund Inceptions Through December 31, 2022

Time‑Weighted Average Annualized Value Added (in Basis Points) for T. Rowe Price Retirement Funds

Sources: Standard & Poor's, Russell, MSCI, Bloomberg Index Services Limited, J.P. Morgan, Credit Suisse (see Additional Disclosures), and T. Rowe Price. Data analysis by T. Rowe Price.

Note that past performance data throughout this material are not reliable indicators of future performance.

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 prior to the pandemic over 530 of our investment professionals went beyond the numbers by visiting senior corporate executives in their offices, touring their companies, and checking reality on the ground with suppliers and customers.5 This enabled them to ask the right questions to get a deeper understanding of where a company stood and where they thought it could go in the future. During the pandemic, these research activities are being conducted virtually.

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 22 years in the industry and 16 years with T. Rowe Price.6 Significantly, many of our analysts go on to become portfolio managers, which we believe creates a strong foundation on behalf of our clients.

Read the Study

Study Highlights


All 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

Two Retirement Funds with relatively distant target dates (2060 and 2065) were excluded from the study because of their relatively short performance track records.

For each vintage, each underlying fund’s actual weight was multiplied by its style‑specific benchmark return to generate positioning inclusive of tactical allocation changes. These positions were then subtracted from each respective underlying fund’s fixed strategic asset allocation weight, multiplied by the style‑specific benchmark return. The result is the difference between actual positioning, including tactical decisions and implementation, versus strategic asset allocation positioning.

Performance results over rolling 1‑ and 3‑year periods for the 11 funds included in our analysis can be found at

Investment staff as of December 31, 2022. Includes 137 portfolio managers, 18 associate portfolio managers, 209 investment analysts, 75 associate analysts, 8 multi‑asset specialists, 41 specialty analysts, 4 economists, 36 traders, and 22 senior managers.

As of December 31, 2022. 

Important Information

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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.

Derivatives may be riskier or more volatile than other types of investments because they are generally more sensitive to changes in market or economic conditions.

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 March 2022 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 concerning investments, investment strategies, or account types, 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. Please consider your 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.

Additional Disclosures

“Bloomberg®,” the Bloomberg U.S. Aggregate Bond Index and the Bloomberg U.S. 1–5 Year Treasury TIPS Index are service marks of Bloomberg Finance L.P. and its affiliates, including Bloomberg Index Services Limited (“BISL”), the administrator of the index (collectively, “Bloomberg”) and have been licensed for use for certain purposes by T. Rowe Price Investment Services, Inc. Bloomberg is not affiliated with T. Rowe Price Investment Services, Inc., and Bloomberg does not approve, endorse, review, or recommend the T. Rowe Price Retirement Funds. Bloomberg does not guarantee the timeliness, accurateness, or completeness of any data or information relating to the T. Rowe Price Retirement Funds.

Copyright © 1997–2022 CREDIT SUISSE GROUP AG and/or its affiliates. All rights reserved.

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 © 2022, J.P. Morgan Chase & Co. All rights reserved.

MSCI and its affiliates and third‑party sources and providers (collectively, “MSCI”) makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed, or produced by MSCI. Historical MSCI data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. None of the MSCI data is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such.

London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). © LSE Group 2022. FTSE Russell is a trading name of certain of the LSE Group companies. Russell® is a trade mark of the relevant LSE Group companies and is used by any other LSE Group company under license. All rights in the FTSE Russell indexes or data vest in the relevant LSE Group company which owns the index or the data. Neither LSE Group nor its licensors accept any liability for any errors or omissions in the indexes or data and no party may rely on any indexes or data contained in this communication. No further distribution of data from the LSE Group is permitted without the relevant LSE Group company’s express written consent. The LSE Group does not promote, sponsor or endorse the content of this communication. 

The S&P 500 Index and the S&P Target Date indexes are products of S&P Dow Jones Indices LLC, a division of S&P Global, or its affiliates (“SPDJI”), and have been licensed for use by T. Rowe Price. Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services LLC, a division of S&P Global (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). T. Rowe Price’s product is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P or their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product nor do they have any liability for any errors, omissions, or interruptions of the S&P 500 Index or the S&P Target Date indexes.


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