The Target Date 2020 Moderate Folio was developed for investors who plan to retire on or around 2020 and can afford to bear average risk.
The Target Date Folios are designed to provide investors with a diversified portfolio through their working and retirement years. Each Folio maintains a strategic balance between expected return and risk. The expected risk of the Target Date Folios decreases as the expected retirement date approaches. The expected risk levels continue to decrease in post-retirement in some cases.
Each Target Date Folio is composed of ETFs in major asset classes such as stocks, bonds, and REITs, with additional asset class exposure that may include sector-specific, country-specific, and commodity asset classes. These allocations are reviewed periodically to maintain an appropriate diversified asset allocation as the target date approaches by increasing the conservative elements of the Folio, thereby decreasing its overall risk level. Each Folio also includes asset classes (again using ETFs) specifically selected to keep up with inflation, including inflation-indexed bonds and commodities.
The specific risk levels for a given Target Date Folio are based on assumptions about an average investor at each of the three model risk levels of Conservative, Moderate and Aggressive. One assumption is that an investor will invest in the specific Target Date Folio during their working years, and not make any contributions to the Folio after retirement. A second assumption is that the investor will draw an annual inflation-adjusted income from the Folio in each year after the expected retirement date. Consequently, the Folios are generally designed as investments to be held not only to the retirement date but also for many years thereafter, as opposed to as an investment to be cashed out on the retirement date.
The choice of the appropriate risk level (Conservative, Moderate, or Aggressive) must be determined by the investor based on his or her specific needs and risk tolerance. The Moderate Folio at a target date is designed for the investor who will remain invested to and then through retirement. The Conservative risk level is designed to be more appropriate for an investor who plans to remain invested through retirement, but who wants to maintain the possibility of liquidating their portfolio and annuitizing it at some point (either at retirement or later). The Aggressive risk level is designed to be more appropriate for an individual who has a high risk tolerance and who intends to remain invested for the long-term. These are only examples, and there are a variety of other reasons why an investor might choose between these three options.
Of course, and importantly, all investments carry risk. Even the Conservative Target Date Folios carry significant investment risk, and the potential for material loss. In addition, during periods of increased volatility, all the Target Date Folios may experience higher than average losses than would be explained by the risk/return characteristics of their allocations.
Last Updated: March 7, 2014
Category: Target Date
Inception Date: December 21, 2007
Date Funded: August 31, 2009*
|Year to Date||2.34%||2.02%|
|Three year (Annualized)||3.9%||15.22%|
|Five Year (Annualized)||14.37%||25.04%|
Past performance is no guarantee of future results.
See how returns are calculated
* Returns reflect model performance from the Inception Date to the Date Funded, and funded performance since the Date Funded, if funded. Your returns may deviate significantly from the values displayed here, due to many factors, including how long after a strategy has been updated that you place orders to update your holdings.
(% of Folio)
|1||BIL||spdr barclays capital 1-3 month t-bill e||10.00%|
|2||DBC||powershares db commodity index tracking||8.00%|
|3||EDV||vanguard extended duration treasury inde||5.00%|
|4||EWZ||ishares msci brazil index fund||2.50%|
|5||FXI||ishares ftse china 25 index fund||2.00%|
|6||PZA||powershares insured national municipal b||18.00%|
|7||QQQ||powershares qqq trust, series 1||8.00%|
|8||TLT||ishares barclays 20+ year treasury bond||10.50%|
|9||VB||vanguard small-cap index fund||18.00%|
|10||VDE||vanguard energy index fund||18.00%|
There are generally between 5 and 12 securities in the Folio.
If the characteristics of the Folio have changed substantially, the securities included may change. Also, corporate actions, such as a merger, or other events may cause changes to the securities held at any time. Your returns may deviate significantly from the values displayed here, due to many factors, including how long after a Folio has been updated that you place orders to update your holdings.