Vanguard to launch five new Target Retirement Funds
Existing funds' asset allocations to be modified
Vanguard has filed a registration statement with the U.S. Securities and Exchange Commission (SEC) to add five new funds to its Target Retirement Fund series. In addition, equity allocations for the six existing Target Retirement Funds will be modified.
The new funds will feature target retirement dates at ten-year intervals—2010, 2020, 2030, 2040, and 2050—complementing the dates of the existing funds.
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Changes to existing Target Retirement Funds' asset allocations
In addition to introducing the new funds, Vanguard will change the asset allocations of the existing Target Retirement Funds as follows:
* The funds' equity allocation paths will be modified to provide a somewhat greater exposure to equities over a longer period of time. The result will be an increase of roughly 10 to 20 percentage points per fund, depending on the target retirement date.
* Vanguard Emerging Markets Stock Index Fund will be added to each of the funds (representing roughly 1% to 2.5% of assets), further diversifying their exposure to international markets.
* Vanguard European Stock Index Fund and Pacific Stock Index Fund will be added to Target Retirement 2005 Fund and Target Retirement Income Fund. The funds will have international exposures of roughly 10% and 6%, respectively.
"While the changes in the portfolio construction will result in modestly higher risk profiles for the funds, we believe that shareholders will benefit from broader equity diversification and higher return potential," Mr. Brennan said.
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Personally I think this is a good move - the new funds allow a more targeted Target Retirement choice, and the increased stock/international diversification means I won't have to do as much tweaking around the edges for an asset allocation that I'm comfortable with ...
Existing funds' asset allocations to be modified
Vanguard has filed a registration statement with the U.S. Securities and Exchange Commission (SEC) to add five new funds to its Target Retirement Fund series. In addition, equity allocations for the six existing Target Retirement Funds will be modified.
The new funds will feature target retirement dates at ten-year intervals—2010, 2020, 2030, 2040, and 2050—complementing the dates of the existing funds.
....
Changes to existing Target Retirement Funds' asset allocations
In addition to introducing the new funds, Vanguard will change the asset allocations of the existing Target Retirement Funds as follows:
* The funds' equity allocation paths will be modified to provide a somewhat greater exposure to equities over a longer period of time. The result will be an increase of roughly 10 to 20 percentage points per fund, depending on the target retirement date.
* Vanguard Emerging Markets Stock Index Fund will be added to each of the funds (representing roughly 1% to 2.5% of assets), further diversifying their exposure to international markets.
* Vanguard European Stock Index Fund and Pacific Stock Index Fund will be added to Target Retirement 2005 Fund and Target Retirement Income Fund. The funds will have international exposures of roughly 10% and 6%, respectively.
"While the changes in the portfolio construction will result in modestly higher risk profiles for the funds, we believe that shareholders will benefit from broader equity diversification and higher return potential," Mr. Brennan said.
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Personally I think this is a good move - the new funds allow a more targeted Target Retirement choice, and the increased stock/international diversification means I won't have to do as much tweaking around the edges for an asset allocation that I'm comfortable with ...