This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

The Top-Rated Life-Cycle Funds

Whether you are looking to retire in the next five years or 35 years, it is important to monitor your investment mix to be sure you are not taking too much or too little risk.

Early in your work life, it is easier to tolerate the volatility of the stock market in the search for the higher returns you need to build a solid base for your retirement nest egg.

The amount of risk you take should lessen as your portfolio grows and you get closer to retirement, however. Each year as you rebalance your portfolio, the allocation between bonds, stocks and other investments should be adjusted. Generally, the percentage of bonds should increase as the percentage of stocks decreases.

If you would rather spend time making money in your chosen profession than researching and managing a diverse portfolio of investments, the mutual fund industry has just the product for you.

Several fund companies have created a series of funds that target specific years in which the investor is expected to retire and begin making significant withdrawals.

Instead of directly holding individual stocks, these funds hold a range of mutual funds or index tracking portfolios. The minute-to-minute trading of stocks and bonds is left to the underlying fund managers, allowing the lifestyle funds to monitor and adjust the allocation between their holdings. The portfolio mix is systematically rebalanced on a set schedule to get more and more conservative over time.

There are target retirement date funds as far out as 2050 for 20-somethings in their first job who plan to retire in their 60s. Below are comparisons of the year-to-date performance for funds tracked by TheStreet.com Ratings that target retirement dates of 2010, 2020, 2030 and 2040.


Life Cycle Funds Ranked by Year-To-Date Performance
Ticker Fund Rating YTD Return thru 11/27
2010 Funds
TRRAX T. Rowe Price Retirement 2010 Fd B- 10.36%
PENAX Principal Inv LifeTime 2010 A D+ 9.59%
STLBX Barclays Gbl Inv LifePath 2010 Fd I C 8.82%
SATAX State Farm LifePath 2010 LegA C 8.45%
FFFCX Fidelity Freedom 2010 Fd C 7.87%
STNRX Wells Fargo Avtg DJ Tgt 2010 A D+ 7.37%
2020 Funds
TRRBX T. Rowe Price Retirement 2020 Fd B 11.64%
PTBSX Principal Inv LifeTime 2020 Sel B- 11.35%
STLCX Barclays Gbl Inv LifePath 2020 Fd I C+ 10.87%
SAWAX State Farm LifePath 2020 LegA C+ 10.47%
STTRX Wells Fargo Avtg DJ Tgt 2020 A C- 9.69%
FFFDX Fidelity Freedom 2020 Fd C 9.40%
2030 Funds
TRRCX T. Rowe Price Retirement 2030 Fd B 12.74%
STLDX Barclays Gbl Inv LifePath 2030 Fd I B- 12.36%
SAYAX State Farm LifePath 2030 LegA C+ 11.94%
PTCSX Principal Inv LifeTime 2030 Sel B 11.90%
STHRX Wells Fargo Avtg DJ Tgt 2030 A C- 10.40%
FFFEX Fidelity Freedom 2030 Fd C 10.20%
2040 Funds
STLEX Barclays Gbl Inv LifePath 2040 Fd I B 13.66%
SAUAX State Farm LifePath 2040 LegA B 13.19%
TRRDX T. Rowe Price Retirement 2040 Fd B 12.79%
PTDSX Principal Inv LifeTime 2040 Sel B 11.92%
STFRX Wells Fargo Avtg DJ Tgt 2040 A C 11.58%
FFFFX Fidelity Freedom 2040 Fd C+ 10.62%
Source: TheStreet.com Ratings

T. Rowe Price (TROW) topped three of the four lists. Its (TRRAX) T.Rowe Price Retirement 2010 fund has averaged total annual returns of 10.8% over the three years ending Oct. 31. The fund's strategy calls for allocating 66% of assets to stocks and 34% to bonds, with the current allocation of the underlying funds adding up to 29.5% domestic bonds, 51.5% domestic stocks, 12.0% foreign stocks and 6.5% cash as of Sept. 30, 2006.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $128.54 0.00%
FB $80.90 0.00%
GOOG $573.37 0.00%
TSLA $202.44 0.00%
YHOO $43.99 0.00%

Markets

DOW 18,096.90 -106.47 -0.58%
S&P 500 2,098.53 -9.25 -0.44%
NASDAQ 4,967.1410 -12.76 -0.26%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs