Retirement Plan Services Choose the right provider for your defi ned contribution plans
Compete with confi dence. Which solution is right for your clients?
Retirement plan solutions from Capital Group, home of American Funds, are designed to serve a broad range of clients and offer the advantages of large-plan pricing to small- and mid-size employer-sponsored retirement plans. These solutions are available in a variety of share classes to accommodate both fee-based practice models, including those taking advantage of a recapture account, as well as commission-based models.
Call us at (800) 421-9900 PLAN SIZE for help in determining $0 $750,000 $1.5 million $10+ million which solution would RecordkeeperDirect best fi t a specifi c plan. PlanPremier
RecordkeeperDirect® PlanPremier® • Designed especially for • Designed especially for larger plans smaller plans • Robust yet low-cost plan services • Simple to operate and maintain • Hundreds of mutual funds from • Low-cost recordkeeping more than 40 investment managers,* and investments including American Funds
PAGE • Customized plan administration by • Two versions: a third-party administrator (TPA) — PlanPremier–TPA — customized 3 Save your clients money plan administration by a TPA — PlanPremier–Bundled — plan 5 Build a stronger plan menu administration by Capital Group 7 Trust a proven leader
How can we help you? Capital Group is dedicated to helping you reach your full potential and win This content, developed by Capital Group, more retirement plan business. home of American Funds, should not be used as a primary basis for investment Visit americanfunds.com or call (800) 421-9900. decisions and is not intended to serve as impartial investment or fi duciary advice.
* As of 12/31/2018. Available investment options will vary by retirement plan solution and share class. Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value. 2 Save your clients money
Our strategic approach to plan pricing is designed to be low-cost and transparent and to provide better overall value.
A closer look at RecordkeeperDirect pricing Step 1 u Determine the annual recordkeeping fees, based on plan assets and share class. Step 2 u Choose a share class depending on what level of compensation is necessary to meet the plan’s service requirements.
Compensation is included in the expense ratio Recordkeeping fees1 based on plan assets TPA compensation [Base fee (below) + $20 per participant] Average based on plan assets Share expense Advisor class Up to $250K $250K–$500K $500K–$1M $1M–$2M $2M+ ratio2,3 compensation Up to $1M $1M+ R-2 $750 $500 1.47% 0.75% 0.12% 0.05% No base or per-participant fee R-3 750 $500 1.02 0.50 0.05
R-4 1,000 750 $500 0.72 0.25 0.02
R-5E 750 500 0.52 0.00 0.00
R-6 1,750 0.38 0.00 0.00
A closer look at PlanPremier pricing With a fixed-dollar approach to plan pricing, plan assets — depending on the share class — generate a plan credit that can offset plan expenses. Over time, net plan expenses, as a percentage of assets, will decrease as assets grow.
Step 1 u Determine the annual recordkeeping fees based on the number of plan participants. Step 2 u Choose a share class depending on (1) how the plan sponsor wishes to pay for the recordkeeping fees (with or without expense ratio revenue generated by plan credits) and (2) what level of compensation is necessary to meet the plan’s service requirements.
Plan credit and compensation are included in the expense ratio Approximate Recordkeeping fees plan credit TPA Base fee (varies by fund) compensation Average Participants with PlanPremier- PlanPremier- Per Share expense PlanPremier- PlanPremier- Advisor PlanPremier– account balances TPA Bundled + participant class ratio2,4 TPA Bundled compensation TPA 1–25 $2,200 or $5,400 + $100 R-2 1.49% 0.40% 0.45% 0.65% 0.05%
26–300 2,200or 5,400 + 60 R-2E 1.18 0.25 0.30 0.50 0.05
301–500 3,700or 6,900 + 55 R-3 1.06 0.25 0.30 0.35 0.05
501–1,000 6,200or 9,650 + 50 R-4 0.73 0.05 0.10 0.25 0.05
1,001 or more 8,200or 11,650 + 48 R-5E 0.50 0.15 0.15 0.00 0.00
R-5 0.43 0.05 0.05 0.00 0.00
R-6 0.37 0.00 0.00 0.00 0.00
3 Save your clients money (continued)
For pricing on a specifi c PlanPremier–TPA — sample illustration plan opportunity, call us at (800) 421-9900. u Plan assets: $2.5 million u Estimated annual contributions: $150,000 Use a customized plan cost u Participants with account balances: 50 comparison report to help win or retain a plan. PlanPremier plan credits can offset plan expenses
American Funds American Funds PlanPremier–TPA (R-3) PlanPremier–TPA (R-6) Annual plan administration expenses With PlanPremier-TPA, TPAs 1 charge administration fees for Recordkeeping Fees $5,200 $5,200 plan duties including keeping a Administration Fees 1 $1,750 $1,750 plan in compliance. [Note: The Trustee / Custodial Fees $0 $0 $1,750 cited is only an example.] GROSS Plan Administration Expenses 2 $6,950 $6,950 2 Gross plan administration expenses reflect the total Plan Credit / Expense Offset ($6,625)† 3 ($0)† recordkeeping, administration NET Plan Administration Expenses $325 $6,950 and trustee/custodial fees, before any plan credit, if applicable, is applied. +
3 The ($6,625) figure in this example represents a plan Annual investment expenses credit that comes from revenue Average Expense Ratio 1.06% 4 0.37% 5 in certain share classes, such Other Fees 0.00% 0.00% as R-3. This enables net plan expenses, as a percent of assets, Total Investment Expenses 1.06% 0.37% to decrease as plan assets grow. $28,090 $9,805 4 With R-3, advisor compensation (35 bps) is included in the investment expense ratio. +
The R-6 average expense ratio is 5 Annual advisor fee lower than R-3, in this example, because it doesn’t include Advisor Fee — 0.35% 6 any recordkeeping revenue or — $9,275 advisor compensation.
6 Fee-based advisor compensation = is determined by the fi nancial professional and paid separately. First-year plan cost 7 1.07% 0.98% 7 The fi rst-year plan cost shows $28,415 $26,030 the ‘all-in’ cost of the plan, which enables sponsors to more easily † compare different share classes Credit rates may vary depending on a plan’s investment options. and/or options for paying plan expenses.
4 Build a stronger plan menu
Investment returns are critical to any plan participant’s long-term success. With Capital Group, you can start with a target date retirement series “most recommended” by advisors5 and then build a diversifi ed investment menu by choosing from among hundreds of funds from well-respected managers.6
Quality matters when selecting investments for a plan With PlanPremier, you can access hundreds of investments from more than 40 well-respected investment managers,6 including:
8 American Funds were selected for Morningstar’s “Terrifi c 28”
Eight American Funds have been cited for excellence in the Morningstar® FundInvestorSM “Terrific 28” list.
Morningstar’s annual review of more than 8,000 mutual funds identifies a select group of funds based on key investment criteria, which include cheapest quintile of category, manager investment of more than $1 million in the fund, Morningstar Risk rating below the High level, Morningstar Analyst Rating of Bronze or higher, parent rating of Positive and returns above the fund’s benchmark over the manager’s tenure.
Source: Morningstar, “Fund Spy: 28 Terrifi c Funds,” September 2018.
5 Build a stronger plan menu (continued)
Benefit from a target date series “most recommended” by advisors5 The American By 2023, about 82% of 401(k) • We continue to manage our glide Funds Target Date contributions are expected to flow into path 30 years past retirement. Retirement Series and target date funds.8 And since so much is riding on each plan’s target date funds, • Our funds have meaningful equity other highly regarded the series chosen for the plan matters. exposure throughout retirement. American Funds are • We emphasize dividends to provide also available on many Distinguish yourself by choosing the American Funds Target Date Retirement equity exposure while managing other DC platforms.7 Series®, which leverages a distinct volatility. approach designed to promote better Better still: Even though the American retirement investment outcomes. Funds Target Date Retirement Series The target date series has a unique is available on many other providers’ glide path (below) designed to address platforms, it may be less expensive in a both market risk and longevity risk. Capital Group retirement plan solution.
Accumulation Transition Distribution Glide path objective 100% Glide path objective Mix of capital appreciation 90 Capital preservation and income generation and income generation 80 Assets Fixed income funds Assets U.S. and 70 U.S. and international international equity credit, government and 60 Growth-and- securitized bonds 50 income funds
40 Equity-income/ Glide path objective 30 Balanced funds Primarily income generation, Glide path objective 20 but also capital appreciation Capital appreciation Growth funds and preservation 10 Assets Assets U.S. and 0 U.S. and international equity international equity 45 40 35 30 25 20 15 10 5 Retirement +5 +10 +15 +20 +25 +30 and fixed income funds Age 20 Age 50 Age 65 Age 95
Although target date funds are managed for investors on a projected retirement date time frame, a fund’s allocation strategy does not guarantee that an investor’s retirement goals will be met. American Funds investment professionals manage the target date fund’s portfolio, moving it from a more growth-oriented strategy to a more income-oriented focus as the fund gets closer to its target date. The target date is the year in which an investor is assumed to retire and begin taking withdrawals.
The target allocations shown are effective as of January 1, 2019, and are subject to the Portfolio Oversight Committee’s discretion. The funds’ investment adviser anticipates that the funds will invest their assets within a range that deviates no more than 10% above or below these allocations. Underlying funds may be added or removed during the year. Changes in the equity allocation within the underlying equity-income and balanced funds may affect the overall equity exposure in the target date funds. For quarterly updates of fund allocations, visit americanfunds.com.
6 Trust a proven leader
The true test of any long-term retirement plan solution is the level of service and support the provider offers to you, as the plan advisor, your plan sponsor clients and their plan’s participants.
Advisor benefits: Personalized sales support PlanPremier®-Bundled
Capital Group has focused on providing superior Retirement plan proposal long-term results for American Funds® since 1931. • An experienced sales team, • A comprehensive advisor website comprising specialists who’ve makes it easier to offer more value- A brighter future is in taken the time to understand added services to your clients. your hands. your business needs, can help you win and retain more plans. • Highly effective webinars, videos and literature can help you enroll employees and educate plan participants.
Customized retirement plan proposals for use at point-of-sale Plan sponsor benefits: Reliable ongoing service • A robust plan sponsor website • A knowledgeable in-house support provides access to participant service team addresses and resolves fee disclosure and the ability issues quickly. to approve distributions. • Extensive plan data and analysis is available through a customized report, which is updated quarterly and available online.
Participant benefits: Help improve participant outcomes • An engaging suite of materials • Comprehensive online educational encourages employees to enroll resources to guide participants and stay invested in the plan. through every stage of retirement planning and investing.
Freedom of choice with fiduciary services If plan sponsors want help selecting and monitoring investments, they can use their choice of any fiduciary services provider. In addition to others, we facilitate access to ERISA 3(21) or 3(38) services from an independent third party, Wilshire Associates Incorporated (Wilshire®).9
ERISA 3(21): nondiscretionary investment advisor ERISA 3(38): discretionary investment manager Wilshire screens, monitors and recommends Wilshire screens, selects and monitors plan investment options for a plan’s lineup, but it’s up investments and makes any necessary changes to the plan sponsor to either select investment in the plan’s investment menu. options from a Select List or approve Wilshire’s recommended Fund Menu. u Annual cost: 0.05% of assets u Annual cost: 0.02% of assets
7 Make Capital Group your MVP
Which firm have you chosen as your Most Valued Provider for defined contribution plans? Capital Group, which provides plan services to more than 400,000 businesses,10 was selected most often by retirement plan advisors as being reliable and easy to do business with.5
Save your clients money Build a stronger plan menu Trust a proven leader Our fixed-dollar approach to plan Start with a target date series We’ve earned high marks for pricing is designed to be low-cost “most recommended” by advisors.5 advisor support and plan sponsor and transparent and to provide Then build a diversified menu with service5 — all of which can help better overall value. access to an expansive choice of make your job easier and your hundreds of mutual funds from 40+ practice more effective. respected investment managers6, including American Funds.
The American Funds Target Date Retirement How can we help you? Series and other highly regarded American Funds We’re dedicated to helping you reach your full are also available on many other potential and win more retirement plan business. DC platforms.7 Visit americanfunds.com or call (800) 421-9900.
1 There is a one-time annual RecordkeeperDirect plan installation fee of $500 for startup plans; waived for R-2 only if plan assets reach $100,000 or more as of the plan’s first billing date. No charge for takeover plans. The $20 per-participant fee will be deducted from participant accounts. 2 Average expense ratios shown are provided only as examples. The actual average expense ratio depends on the investments selected for the plan and participant allocations. Expense ratios reflect applicable fee waivers and expense reimbursements, without which expenses would be higher. 3 The average expense ratio shown for each RecordkeeperDirect share class is for all funded investments and is weighted, based on average daily net assets in the program as of 12/31/2018. Accordingly, more weight is given to funds with more assets. Actual expense ratios, as reported in each fund’s prospectus available at the time of publication, range from 1.36% to 1.97% for R-2; 0.91% to 1.53% for R-3; 0.61% to 1.23% for R-4; 0.40% to 1.02% for R-5E; and 0.25% to 0.87% for R-6. 4 The average expense ratio shown for each PlanPremier share class is for all funded investments and is weighted, based on average daily net assets in the program as of 12/31/2018. Accordingly, more weight is given to funds with more assets. Actual expense ratios, as reported in each fund’s prospectus available at the time of publication, range from 0.99% to 4.30% for R-2; 0.50% to 2.35% for R-2E; 0.64% to 3.57% for R-3; 0.35% to 3.55% for R-4; 0.02% to 1.93% for R-5E; 0.02% to 2.29% for R-5; and 0.02% to 3.07% for R-6. 5 Market Strategies International, Cogent Wealth Reports, Retirement Plan Advisor TrendsTM, September 2018. Methodology: There were 521 respondents to a web survey conducted from August 8 to 15, 2018. The respondents consisted of financial advisors managing defined contribution plans. Learn more about Cogent Wealth Reports at http://landing.marketstrategies.com/retirement-plan-advisor-trends-2018. 6 As of 12/31/2018. Fund availability may vary by solution and share class. 7 Check with your home office for details. 8 Source: Cerulli Associates, The Cerulli Report — U.S. Defined Contribution Distribution 2018. 9 Wilshire’s recommendations are subject to any generally applicable limitation on the investment options available, including limitations imposed by the plan’s recordkeeper or financial professional. Plans that elect target-date mapping at plan conversion may only choose coverage under the 3(21) Select List. Wilshire® is a registered service mark of Wilshire Associates Incorporated, Santa Monica, California. All other trade names, trademarks and/ or service marks are the property of their respective holders. Wilshire is not an affiliate of any member company of American Funds. Wilshire is solely responsible for the program material and its investment recommendations. The complete terms and limitations of Wilshire’s 3(21) Investment Adviser and 3(38) Investment Manager programs may be found in the applicable agreement between the plan sponsor and Wilshire. 10 401(k), SEP and SIMPLE plans as of 12/31/2018. Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing. All Capital Group trademarks mentioned are owned by The Capital Group Companies, Inc., an affiliated company or fund. All other company and product names mentioned are the property of their respective companies. Securities offered through American Funds Distributions, Inc. Lit. No. RPGEBR-132-0519P Litho in USA CGD/SCG/10260-S74352 © 2019 Capital Group. All rights reserved. Printed on recycled paper. December 08, 2017
A comparison of estimated retirement plan costs for: QRS Company 401K Retirement Plan
PREPARED BY Pat Advisor
Leading Financial Firm 3 Success Lane Suite 17 Los Angeles, CA 90071
(555) 555-1717 [email protected]
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value. Retirement Plan Cost Comparison SAMPLE Page 1 of 7 A guide to understanding Retirement plan fees and expenses
As a retirement plan fiduciary, one of your responsibilities is to ensure that expenses paid by the plan are reasonable. To determine what is reasonable, you must Total Plan Cost first understand retirement plan costs. This illustration provides a high-level view of plan fees and expenses, and explains how each fits into the total plan cost. Plan Administration Expenses + Investment Expenses Remember that plan cost is just one factor to consider when making decisions about plan providers, investment Recordkeeping Administration Investment Management Advisor Compensation managers, investment options and financial professionals. Paid to the plan's Paid to the plan's third- Paid to the investment Paid to the plan's financial recordkeeper for tracking party administrator for manager for managing professional's firm for participant accounts, services such as plan individual securities within distribution and for producing quarterly design, creation of plan each investment option employee-related services statements and providing documents, compliance such as enrollment web and phone access testing and Form 5500 guidance and ongoing preparation education
Other Related Fees Recordkeeper and TPA Paid to a variety of Payments providers for legal, Paid to the plan's administrative, marketing recordkeepers and/or the and/or transfer-agent third-party administrator services, depending on the arrangement
Recordkeeping Credit / Expense Offset Certain plans, share or unit classes or investments may credit a portion of the investment expenses back to the plan to reduce or offset plan administration expenses
Retirement Plan Cost Comparison SAMPLE Page 2 of 7 Estimated first-year plan cost
Current Plan Assets Estimated Annual Contributions Number of Eligible Employees Number of Participants $2,500,000 $150,000 50 50 CURRENT PROVIDER
Current 401k Provider PlanPremier® – TPA R-3 PlanPremier® – TPA R-6
Annual Plan Administration Expenses
Recordkeeping Fees $0 $5,200 $5,200 Administration Fees $1,750 $1,750 $1,750 Trustee / Custodial Fees $0 $0 $0 — — — Independent Fiduciary Services — — —
GROSS Plan Administration Expenses $1,750 $6,950 $6,950 Plan Credit / Expense Offset ($0) ($6,625)* ($0)* NET Plan Administration Expenses $1,750 $325 $6,950 Annual Investment Expenses
Average Expense Ratio 1.06% 1.06% 0.37% Other Fees 0.45% 0.00% 0.00%
1.51% 1.06% 0.37% Total Investment Expenses $40,015 $28,090 $9,805
Annual Advisor Fee (Fee-based share/unit classes)
Advisor Fee 0.00% — 0.35% $0 — $9,275 1.58% 1.07% 0.98% First-Year Plan Cost (Excludes one-time fees) $41,765 $28,415 $26,030
Footnotes and important legal information appear on page 7. Retirement Plan Cost Comparison SAMPLE Page 3 of 7 Estimated first-year plan cost
Current Plan Assets Estimated Annual Contributions Number of Eligible Employees Number of Participants $2,500,000 $150,000 50 50 CURRENT PROVIDER
Current 401k Provider PlanPremier® – TPA R-3 PlanPremier® – TPA R-6
For Reference: One-Time Plan Document Fee (Excluded from first-year plan cost) N/A $0 $0 Annual Advisor Compensation (Commissionable share/unit classes and included in expense ratios) Share/Unit Class Rate - 0.35% - - $9,275 - Adjusted Fee-Based Rate - 0.35% - - $9,275 - Incremental Plan Credit (Included in plan credit / expense offset) - 0.00% - - $0** -
Footnotes and important legal information appear on page 7. Retirement Plan Cost Comparison SAMPLE Page 4 of 7 Estimated cumulative plan costs over 10 years
This chart projects estimated cumulative plan costs of different 5 years 10 years providers over 10 years. Keep in mind that this chart is for illustrative purposes only. It is not intended to predict future Current 401k Provider — current provider $279,932 $726,596 costs precisely or to provide advice. PlanPremier® – TPA R-6 165,735 418,243 PlanPremier® – TPA R-3 181,836 460,164 Important notes about the chart: Dollars in thousands •A hypothetical annual return of 8% is applied to plan assets. $800 This growth rate is for illustrative purposes only and does not represent the actual results of any specific investments.
•The plan's estimated annual contributions of $150,000 are 700 added to plan assets each year. Distributions are not taken into account. 600 •Plan costs are subtracted from plan assets each year. Plan costs are calculated after annual contributions and the hypothetical growth rate have been applied at the end of each year. 500
•If entered as a percentage of assets, annual plan costs and credits change as assets change over time. If entered as a 400 dollar amount, costs and credits do not change from year to year.
•The numbers of employees and participants remain constant. 300 •One-time plan fees are not included.
200
100
0 1 2 3 4 5 6 7 8 9 10 Years
Footnotes and important legal information appear on page 7. Retirement Plan Cost Comparison SAMPLE Page 5 of 7 Important legal information
This report was generated by a tool created by American Funds Distributors®, Inc., which receives fees for distributing and servicing the American Funds mutual funds, in collaboration with Morningstar, Inc. The content herein is not intended to serve as impartial investment or fiduciary advice.
* For PlanPremier, credit rates may vary depending on a plan's assets are 100k or more as of the last date in the plan's underlying funds. investment options. recordkeeping quarter. The investment advisor is currently reimbursing a portion of ** For PlanPremier and RecordkeeperDirect-Multifund, Wilshire 3(21) fiduciary service: Optional mapping services are other expenses for all share classes of American Funds reducing the compensation rate through recapture for share available for a one-time fee of $100. Corporate Bond Fund, American Funds Emerging Markets classes R-2 through R-4 and unit classes 1 through 6 will create Bond Fund, American Funds Strategic Bond Fund and The plan costs in this report are based on information entered an Incremental Plan Credit. For this illustration, this amount will American Funds 2060 Target Date Retirement Fund; Class R- or provided by the financial professional. If actual fees, increase your plan credit. In practice, the recaptured share/unit 2E shares of American Funds Developing World Growth and expenses and other figures vary, plan costs may be affected. class compensation will be directed to an unallocated plan Income Fund, American Mutual Fund, Capital Income Builder, Plan contracts contain actual fee and expense rates and account where it can be used to pay the plan's advisor, American Funds Global Balanced Fund (GBAL), American structures. Service provider fees are subject to change after reasonable plan administration expenses, or allocated to Funds Inflation Linked Bond Fund, American Funds Mortgage expiration of the period guaranteed by the plan’s contract. participant accounts. Fund and Short-Term Bond Fund of America; Class R-5E To simplify the report, some fees are estimated, and other fees shares of AMCAP Fund, The New Economy Fund, New *** For RecordkeeperDirect-American Funds, reducing the are not included, such as loan, distribution, termination and Perspective Fund, New World Fund, SMALLCAP World Fund, compensation rate through recapture for share classes R-2 self-directed brokerage account fees. In addition, certain asset American Funds Developing World Growth and Income Fund, through R-4 will create an Incremental Plan Credit. In practice, breakpoints and privately negotiated rates may not be American Mutual Fund, Capital World Growth and Income the recaptured share class compensation that includes any included. Some figures have been rounded for display Fund, Capital Income Builder, GBAL, American Funds Inflation incremental plan credit will be directed to an unallocated plan purposes. Linked Bond Fund, The Bond Fund of America, Capital World account where it can be used to pay the plan's advisor, Bond Fund and American Funds Portfolio Series funds; and a reasonable plan administration expenses, or allocated to Plan costs are calculated after estimated annual contributions portion of fees and expenses of American Funds U.S. participant accounts. are applied. Distributions are not taken into account. Government Money Market Fund (MMF). Net expense ratios Investment expenses and plan credits/expense offsets are † The expense ratio for each group annuity investment option reflect the reimbursements, without which the expense ratios applied to all plan assets in calculating costs. If any plan assets is the sum of the group annuity program charge and the would have been higher. These reimbursements will be in are held in investments such as company stock or a self- operating expense of the underlying mutual fund. The effect through at least April 7, 2018 (May 1, 2018 for AMCAP). directed brokerage account, actual investment costs may vary. operating expenses of the underlying mutual funds are for The advisor may elect at its discretion to extend, modify or The plan credit/expense offset may vary by share or unit class, institutional share classes. terminate the reimbursement at that time. Please see the plan assets or investments. fund’s most recent prospectus for details. For MMF, please see ‡ Plan assets were allocated equally among the investments in Net expense ratios reflect any applicable waivers and/or the Financial Highlights table in the fund’s most recent the lineup as an estimate. Actual average expense ratios are reimbursements to the underlying mutual funds. Gross prospectus. based on the plan assets in each investment. expense ratios do not. Some investments may be subject to minimum and/or RecordkeeperDirect Per-Participant Fee. The per-participant maximum investment requirements, and some investments fee, if any, will be deducted quarterly from each participant Net expense ratios are used to calculate total investment may be closed to new investors. account with a balance on the date of deduction. expenses for investment lineups. Net expense ratios reflect any applicable fee waivers and expense reimbursements, without Please see each investment option’s most recent prospectus The R-5 share class will not be available for new which expense ratios would have been higher. Expense ratios for more information. RecordkeeperDirect plans after January 1, 2018. are as of each fund's prospectus. The expense ratio for Corporate Bond Fund is estimated. Please see each fund's ©2017 American Funds Distributors, Inc. and Morningstar, RecordkeeperDirect-Multifund is closed to new plans as of prospectus for details. Inc. The investment information contained herein: (1) is February 1, 2017. proprietary to Morningstar and/or its content providers; (2) Expense ratios for American Funds target date and portfolio RecordkeeperDirect R-2 Plans: Start-up fee is waived if plan may not be copied or distributed; and (3) is not warranted to series funds include the weighted average expenses of the
Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing. For an investment offered through a group annuity, some of this information may differ and can be obtained from a financial professional. Retirement Plan Cost Comparison SAMPLE Page 6 of 7 Important legal information
be accurate, complete or timely. Neither Morningstar, its content providers nor American Funds are responsible for any damages or losses arising from any use of this information.
Note: Investment options within Recordkeeper Direct (Multi- fund) are offered through a group annuity issued by Great- West Life & Annuity Insurance Company, or, in New York, by Great-West Life & Annuity Insurance Company of New York. © 2017 American Funds Distributors, Inc. CGD/AFD/10157-S64311 Lit. No. RPPTBR-003-1217P Printed in USA Retirement Plan Cost Comparison SAMPLE Page 7 of 7 What others say about our retirement plan capabilities
Choose a 401(k) provider you can trust See what others have to say about us
A highly recommended target date provider Award-winning investments
Our target date series has "Thrilling" We’ve won multiple Lipper Fund awards underlying strategies. for 11 consecutive years. Eight of the underlying equity strategies in American In 2019, we were honored with 14 Lipper Fund awards. Funds Target Date Retirement Series were recognized Lipper Fund Award from Refi nitiv. © 2019 Refi nitiv. All rights reserved. on Morningstar’s "The Thrilling 34" list — more than Based on Refi nitiv’s defi nition of consistently strong risk-adjusted any other target date series. returns compared with peers. The 2019 Lipper Fund Awards from Refi nitiv were awarded on March 7, 2019, and were based on Class R-6 Source: Morningstar, “Fund Spy: The Thrilling 34” by Russel Kinnel, shares for 3- and 5-year periods ended November 30, 2018. Used by December 2019. Morningstar’s screening took into consideration permission and protected by the Copyright Laws of the United States. expense ratios, manager ownership, returns over manager’s tenure, The printing, copying, redistribution or retransmission of this and Morningstar Risk, Analyst and Parent ratings. The universe was content without express written permission is prohibited. See limited to share classes accessible to individual investors with a www.lipperfundawards.com for additional information. minimum investment no greater than $50,000 and did not include funds of funds. Class A shares were evaluated for American Funds. American Funds Target Date Retirement Series invests in Class R-6 shares of the underlying American Funds. Not all eight American Funds strategies are in each target date fund. Underlying funds More than 50% of advisors use may change over time. our funds. More than half of all defi ned contribution advisors include our funds in the core offerings of the plans We're the most recommended target they currently manage. date fund provider by plan advisors. Cogent Syndicated, Retirement Plan Advisor TrendsTM, October American Funds was the #1 choice of retirement plan 2019. Methodology: There were 534 respondents to a web survey conducted August 15 to August 23, 2019. The respondents consisted advisors as the most recommended target date fund of fi nancial advisors managing defi ned contribution plans. Learn provider, according to a recent Cogent report. more at escalent.co.
Cogent Syndicated, Retirement Plan Advisor TrendsTM, October 2019. Methodology: There were 534 respondents to a web survey conducted August 15 to August 23, 2019. The respondents consisted of fi nancial American Funds’ multimanager advisors managing defi ned contribution plans. Learn more at escalent.co. “ approach has long served its equity investors well — and should continue American Funds Target Date “ to do so, thanks to parent Capital Retirement series remains a strong Group's strong, results-oriented choice thanks to its impressive investing culture.” underlying funds and low fees.” Morningstar, What Makes American Funds’ Equity Lineup Morningstar, Morningstar Target-Date Fund Series Report, Golden, September 2019. December 2018.
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value. “ American Funds’ emphasis is always on long-term results, which is the name of the game in retirement.”
Kiplinger, 5 Best American Funds for Retirees, May 2019.
A trusted record keeper
Our brand is well regarded. We’re a leading 401(k) provider.
✔ A company I trust Assets under management ✔ Reliable #1 #2 #4 ✔ Experienced investment team Plans under Plans under Plans under $1M $5M $10M ✔ High degree of integrity and honesty PLANSPONSOR 2019 Defi ned Contribution Recordkeeping Survey© ✔ Best-in-class portfolio and risk 2019 Institutional Shareholder Services. management practices In a survey of 534 retirement plan advisors, American Funds was chosen most often in “Best for Flexibility … The great these categories and others. thing about a 401K plan from Cogent Syndicated, Retirement Plan Advisor TrendsTM, October 2019. Methodology: There were 534 respondents to a web survey [Capital Group] is that it can be conducted August 15 to August 23, 2019. The respondents consisted of fi nancial advisors managing defi ned contribution tailored to fi t almost any type plans. Learn more at escalent.co. of business, from start-ups to mergers to well-established entities.” We’re one of the most preferred The Balance, The 8 Best 401K Providers of 2019, November 2019. fund families. We ranked second highest among retirement [Capital Group] is focused on plan advisors when they considered many of the “ factors that go into selecting investments and providing the best experience recordkeepers. for plan sponsors as well as PLANADVISER, 2019 PLANADVISER Retirement Plan Adviser Survey, investment brokers who work October 2019. with small businesses ... [Capital Group] provides outstanding Companies stay with us longer. customer support and help on Our retirement plan turnover is lower than other an ongoing basis.” retirement plan providers. Chamber of Commerce, American Funds 401(k) Review —2019. 3.7% Capital Group vs. 5.7% Industry average
BrightScope and Capital Group as of November 2019. Industry average based on available data for 41,265 defi ned contribution plans. The Capital Advantage® Since 1931, Capital Group, home of American Funds, has helped investors pursue long-term investment success. Our consistent approach — in combination with The Capital SystemSM — has resulted in superior outcomes.
Aligned with The Capital System American Funds’ investor success superior outcomes
We base our decisions on a The Capital System combines Equity funds have beaten their long-term perspective, which individual accountability with Lipper peer indexes in 89% of we believe aligns our goals with teamwork. Funds using The Capital 10-year periods and 95% of the interests of our clients. Our System are divided into portions 20-year periods.2 Fixed income portfolio managers average that are managed independently funds have helped investors achieve 27 years of investment experience, by investment professionals with diversification through attention to including 22 years at our company, diverse backgrounds, ages and correlation between bonds and reflecting a career commitment investment approaches. An equities.3 Fund management fees to our long-term approach.¹ extensive global research effort have been among the lowest in is the backbone of our system. the industry.4
1 Portfolio manager experience as of December 31, 2018. 2 Based on Class R-6 share results for rolling periods through December 31, 2018. Periods covered are the shorter of the fund’s lifetime or since the comparable Lipper index inception date (except Capital Income Builder and SMALLCAP World Fund, for which the Lipper average was used). Expenses differ for each share class, so results will vary. 3 Based on Class R-6 share results, as of December 31, 2018. Eight of our nine American Funds fixed income funds available in Class R-6 shares and that have been in existence for the three-year period showed a three-year correlation below 0.2. Standard & Poor’s 500 Composite Index was used as an equity market proxy. Correlation based on monthly total returns. Correlation is a statistical measure of how two securities move in relation to each other. A correlation ranges from -1 to 1. A positive correlation close to 1 implies that as one security moves, either up or down, the other security will move in “lockstep,” in the same direction. A negative correlation close to -1 indicates that the securities have moved in the opposite direction. 4 On average, our management fees were in the lowest quintile 70% of the time, based on the 20-year period ended December 31, 2018, versus comparable Lipper categories, excluding funds of funds. Class R-6 shares were first offered on May 1, 2009. Class R-6 share results prior to the date of the first sale are hypothetical based on Class A share results without a sales charge, adjusted for typical estimated expenses. Results for certain funds with an inception date after May 1, 2009, also include hypothetical returns because those funds’ Class R-6 shares sold after the funds’ date of first offering. Please see americanfunds.com for more information on specific expense adjustments and the actual dates of first sale. Past results are not predictive of future results. Investing for short periods makes losses more likely. American Funds offers a range of share classes designed to meet the needs of retirement plan sponsors and participants. The different share classes incorporate varying levels of advisor compensation and service provider payments. Because Class R-6 shares do not include any recordkeeping payments, expenses are lower and results are higher. Other share classes that include recordkeeping costs have higher expenses and lower results.
Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing. This content, developed by Capital Group, home of American Funds, should not be used as a primary basis for investment decisions and is not intended to serve as impartial investment or fiduciary advice. Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and should not be considered advice, an endorsement or a recommendation. All Capital Group trademarks mentioned are owned by The Capital Group Companies, Inc., an affiliated company or fund. All other company and product names mentioned are the property of their respective companies. American Funds Distributors, Inc., member FINRA.
Lit. No. RPGEFL-272-0120P Litho in USA CGD/CIP/8183-S72760 © 2020 Capital Group. All rights reserved. Printed on recycled paper DC Focus Funds
American Funds: Strong building blocks for DC menus
Unless otherwise noted, all fi gures Defined contribution (DC) menus have become too big and complex. shown are past results as of December 31, 2020. Results are for Class R-6 Simplifying the menu can boost participant outcomes while shares and are not predictive of results in future periods. Current creating efficiencies for both plan sponsors and advisors. and future results may be lower or higher than those shown. Prices and Capital Group offers nine DC Focus Funds that together can returns will vary, so investors may lose form a versatile core lineup covering the major asset classes. money. Investing for short periods makes losses more likely. Returns shown at net asset value (NAV) have These funds have provided broad diversification, historically all distributions reinvested. Class R strong results and moderate volatility — at low cost. shares do not require an up-front or deferred sales charge. For current information and month-end results, visit americanfundsretirement.com.
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value. Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a fi nancial professional and should be read carefully before investing. This content, developed by Capital Group, home of American Funds, should not be used as a primary basis for investment decisions and is not intended to serve as impartial investment or fi duciary advice. Nine investment options that can help enhance and simplify the core menu
QDIA: U.S. equity: International equity: U.S. fixed income: Foundational* Streamline Broaden Anchor
Seek qualified default Seek strategies that can Seek strategies that provide Seek a core or core-plus investment alternatives span style and market flexible exposure to bond strategy pursuing a (QDIAs) that pair prudent cap in pursuit of better developed and emerging balance of diversification, asset allocation with outcomes markets, with moderate income and preservation strong security selection volatility versus peers
• American Funds Target • AMCAP Fund® • EuroPacific • The Bond Fund Date Retirement Series® • The Growth Fund Growth Fund® of America® • American of America® • New Perspective Fund® • American Funds SM Balanced Fund® • Washington Mutual Strategic Bond Fund Investors FundSM
Strong results with lower volatility Results for 30 years ended December 31, 2020
12
11 Fund Index
The Growth Fund of America 10 New Perspective AMCAP Fund Fund
9 Washington Mutual American Balanced Fund Investors Fund
EuroPacific 8 Standard & Poor’s 500 Growth Fund
60%/40% S&P 500/Bloomberg Barclays U.S. Aggregate 7
MSCI All Country World Average rolling 10-year annualized return (%) annualized return 10-year rolling Average 6 Bloomberg Barclays U.S. Aggregate The Bond Fund of America MSCI All Country World ex USA 5
4 0 2 4 6 8 10 12 14 16 18 30-year standard deviation (%) Source: Capital Group. Past results are not predictive of results in future periods. The market indexes are unmanaged and, therefore, have no expenses. Investors cannot invest directly in an index. There have been times when the funds have lagged the index. Annualized standard deviation (based on monthly returns) is a common measure of absolute volatility that tells how returns over time have varied from the mean. A lower number signifies lower volatility. American Funds Strategic Bond Fund is not shown because it lacks a 30-year history. *Plan sponsors should consult a financial professional before selecting an investment option other than a target date series as a QDIA. 2222 Each of the nine DC Focus Funds brings a distinct strength to the core menu
Morningstar category Investment approach Role in a DC menu QDIA American Funds Target Date Each fund is managed for An age-based solution for Target Date approximately 30 years after it the do-it-for-me participant Retirement Series* reaches its target date. Depending on the proximity to their target dates, the funds seek to achieve the following objectives to varying degrees: growth, income and conservation of capital.
American U.S. Allocation — 50% to Growth-oriented and dividend- A risk-based solution for the Balanced Fund 70% Equity paying equities paired with do-it-for-me participant investment-grade bonds
U.S. equity AMCAP Fund Large Growth U.S. companies across market- Domestic growth with large- cap spectrum with solid and mid-cap exposure growth history and potential
The Growth Fund Large Growth Flexible approach to growth, All-weather capital of America including cyclical companies, appreciation strategy turnaround situations and limited international holdings
Washington Mutual Large Blend Uses an eligibility criteria to seek Dividend-income Investors Fund companies with strong balance oriented strategy sheets and consistent dividends
International equity EuroPacific Foreign Large Growth Taps into growth opportunities Core international strategy Growth Fund in non-U.S. developed and emerging markets
New World Large Stock A global strategy focused A go-anywhere Perspective Fund on multinational firms with global strategy strong growth prospects
Fixed income The Bond Fund Intermediate Core Bond Active management seeking Anchor of fixed of America multiple sources of excess return income allocation
American Funds Intermediate Active management focusing Anchor of fixed income Strategic Bond Fund Core-Plus Bond on interest rate positioning with allocation with higher an opportunistic approach to return potential credit sectors
*Plan sponsors should consult a financial professional before selecting an investment option other than a target date series as a QDIA. 3 U.S. equity: Streamline
Simplify choice and expand opportunities for success
DC menus average 10 U.S. equity funds† – too many, in our view. Rather than seeking to “check” each U.S. equity style box, menus should offer a few U.S. equity funds that can span market cap and style in pursuit of the best opportunities. Our three U.S. equity DC Focus Funds do just that. Each has a distinct investment approach and a different risk-return profile.
Avoid checking every style box Offer funds with style flexibility Deep- Core- Core Core- High- Deep- Core- Core Core- High- value value growth growth Deep-Valuevalue Core-Valuevalue Core Core-Growthgrowth High-Growthgrowth AMCAP Fund® Giant The Growth Fund of America® Washington Mutual Investors FundSM Large Fund 1 Fund 2 Fund 3 Mid Fund 4 Fund 5 Fund 6
Fund 7 Fund 8 Fund 9 Small Micro Micro Small Mid Large Giant Small Mid Large Micro Micro Small Mid Large Giant Small Mid Large Micro
Sources: Capital Group, Morningstar. The above chart, by Capital Group, Washington Mutual The Growth Fund AMCAP is hypothetical and for illustration purposes only. The chart at right, from Investors Fund of America Fund Morningstar, shows Morningstar Ownership ZonesTM for each fund as of December 31, 2020. The shaded area represents 75% of the fund’s assets.
Washington Mutual Investors Fund Percentage of rolling periods in which: Average excess return when: Income focus has provided downside resilience Fund outpaced index Fund outpaced peers Fund outpaced index 3.50% Average rolling 10-year downside capture ratio for 30 years ended December 31, 2020 (%) Fund trailed index -0.59% 78% 81% 101 93 Fund outpaced peers 3.60% 76 546 out of 702 567 out of 702 Fund trailed peers N/A Rolling 10-year periods
Average excess return Washington Mutual Morningstar Large Morningstar Large vs. vs. Investors Fund Value Average Blend Average Index Peers (peers) In leading periods 2.09% 2.37% Yield (%) 1.98 1.86 1.11 In lagging periods –0.66% –3.81% Sources: Morningstar, Capital Group. WMIF yield is 30-day SEC yield as of December 31, 2020. Source: Capital Group. Rolling 10-year Capture ratio reflects the annualized product of fund versus index returns for all months in which the periods from first month-end after fund index had a positive return (upside capture) or negative return (downside capture). In October 2018, inception date through December 31, WMIF was placed in the Large Blend category. Previously, the fund had been classified as Large 2020. The prospectus benchmark is the Value for a number of years. S&P 500 Index. †Source: The BrightScope/ICI Defined Contribution Plan Profile: A Close Look at 401(k) Plans, 2016; BrightScope and Investment Company Institute, June 2019. 4 U.S. equity: Streamline
The Growth Fund of America U.S. growth with style flexibility
The fund’s flexible approach has helped it build an impressive track record. Percentage of rolling periods in which: Average excess return when: Results for 30 years ended 12/31/20 11 Fund outpaced index Fund outpaced peers Fund outpaced index 3.13% 30-year As of Avg. rolling standard 10 Fund trailed index –0.71% December 31, 2020 return deviation 79% 99% 9 The Growth Fund 10.25% 15.93% of America 8 351 out of 446 444 out of 446 Fund outpaced peers 3.24% S&P 500 7.94 14.57 7 Fund trailed peers Return (%) Return –0.02% Russell 1000 7.36 16.51 Rolling 10-year monthly periods Growth Index 6 Morningstar Large 6.68 16.29 5 Average excess return Growth Average vs. vs. Index Peers (peers) 4 12 15 18 21 In leading periods 3.06% 3.09% Standard deviation (%) In lagging periods –0.65% –0.02%
Source: Capital Group, based on data from Source: Capital Group, based on data from Morningstar. Returns are the annualized average Morningstar. Rolling 10-year periods from return of rolling monthly 10-year returns over the 30-year period ended December 31, 2020. first month-end after fund inception date The prospectus benchmark is the S&P 500 Index. through December 31, 2020.
AMCAP Fund U.S. growth with market cap flexibility
The fund has provided mid-cap exposure with less volatility than peers (as measured by standard deviation). Percentage of rolling periods in which: Average excess return when: Fund outpaced index Fund outpaced peers Standard deviation for 10 years ended December 31, 2020 (%) Fund outpaced index 3.13%
15.05 Fund trailed index –0.71% 13.36 13.54 74% 92%
388 out of 524 481 out of 524 Fund outpaced peers 3.24% Fund trailed peers –0.02% Rolling 10-year monthly periods Average excess return vs. vs. Index Peers Average excess return AMCAP Fund Morningstar Large S&P 500 Index In leading periods 2.09% 2.37% vs. vs. Growth Average Index Peers In lagging periods –0.66% –3.81% (peers) In leading periods 3.19% 2.65% Avg. market capitalization In lagging periods –1.26% –0.60% ($ in billions) 97.4 282.6 176.7 Source: Capital Group, based on data from Source: Capital Group, based on data from Morningstar. Average market capitalization, Morningstar. Rolling 10-year periods from calculated by Morningstar, as of December 31, 2020, represents the geometric mean of the first month-end after fund inception date market capitalization for all the stocks in a portfolio. The prospectus benchmark is the S&P through December 31, 2020. 500 Index.
5 International equity: Broaden
Seek broad exposures with lower risk
EuroPacific Growth Fund invests in non-U.S. developed and emerging markets. New Perspective Fund is a global strategy. Both strategies have delivered impressive results in multiple market environments.
EuroPacific Growth Fund Percentage of rolling periods in which: Average excess return when: A diversified approach to international growth Fund outpaced index Fund outpaced peers Fund outpaced index 3.23% The fund has had strong results in both growth- and value-led markets. Fund trailed index –0.31% Average calendar-year excess return over non-U.S. stock market (%, 1985–2020) 97% 98%
Years when growth led Years when value led Fund outpaced peers 3.19% (15 years) (20 years) 312 out of 321 313 out of 321 Fund trailed peers –0.51% 3.17 Rolling 10-year periods 368 Average excess return 216 1.39 vs. vs. Index Peers EUPAC 139 EUPAC –0.16 In leading periods 3.42% 3.49% Peer average In lagging periods –0.59% –0.08% –3.17 Source: Capital Group. Rolling 10-year periods from first month-end after fund Peer inception date through December 31, 2020. average Source: Capital Group, based on data from Morningstar. The Morningstar peer category from EUPAC inception until September 2014 was Foreign Large Blend, and Foreign Large Growth thereafter. To ensure no survivorship bias, the returns were calculated on a daily basis to capture all funds in the average. Years when value led were those in which the MSCI EAFE Value Index’s cumulative return exceeded the MSCI EAFE Growth Index’s cumulative return. Years when growth led were those in which the MSCI EAFE Growth Index outpaced the MSCI EAFE Value Index. Excess return is relative to the EUPAC Historical Benchmarks Index (MSCI All Country World Index ex USA, April 2007–present; MSCI EAFE Index, fund inception–March 2007). For rolling periods, index is the MSCI All Country World (ACWI) ex USA since its inception on January 1, 1988, and MSCI EAFE before 1988. Peers represented by the Morningstar Foreign Large Growth category average.
New Perspective Fund Percentage of rolling periods in which: Average excess return when: A core global strategy Fund outpaced index Fund outpaced peers Fund outpaced index 3.25% The fund has had strong results in both U.S.-led and non-U.S.-led markets. Fund trailed index –0.31% Average calendar-year excess return over the global stock market (%, 1974–2020) 97% 94% Years when U.S. stocks led Years when Fund outpaced peers 3.20% (25 years) international stocks led 440 out of 454 427 out of 454 Fund trailed peers –0.50% (22 years) 5.22 Rolling 10-year periods 368 Average excess return 92 vs. vs. Index Peers 2.29 1.86 In leading periods 3.22% 3.20% 216 In lagging periods –0.31% –0.50%
NPF Peer 139 NPF Source: Capital Group. Rolling 10-year average –0.45 periods from first month-end after fund Peer inception date through December 31, 2020. average
Source: Capital Group, based on data from Morningstar. Years when U.S. stocks led were those in which the S&P 500’s cumulative return exceeded the MSCI EAFE Index’s cumulative return. Years when international stocks led were those in which the MSCI EAFE Index’s cumulative return exceeded the S&P 500’s cumulative return. The fund’s Morningstar peer category is World Large Stock. Excess return is measured against the MSCI World Index. The fund’s inception date is March 13, 1973.
6 U.S. fixed income: Anchor
A True Core approach to DC fixed income The Bond Fund of America (core) and American Funds Strategic Bond Fund (core-plus) seek to prudently manage risk while providing a mix of capital preservation, diversification, income and inflation protection.
The Bond Fund of America and American Funds Strategic Bond Fund A history of strong results with moderate volatility versus peers. Percentage of rolling periods in which The Bond Fund of America:
Three-year annualized return and standard deviation (%) Outpaced index Outpaced peers
10.0
9.0 SBF 67% 86%
8.0
7.0 BFA 294 out of 440 379 out of 440
6.0 U.S. Agg Index Rolling 10-year periods
5.0 Core Category Core Plus Average excess return Average Category Average 4.0 vs. vs. Index Peers 3.0 In leading periods 0.67% 1.08% 2.0 In lagging periods –0.64% –0.37%
1.0 Source: Capital Group. Rolling 10-year periods from first month-end after fund Higher return 0.0 inception date through December 31, 3.0 3.5 4.0 4.5 5.0 2020. Peer category is Morningstar Higher risk (volatility) Intermediate Core Bond.
Sources: Capital Group, Morningstar. Data as of December 31, 2020. U.S. Agg Index represents the Bloomberg Barclays U.S. Aggregate Index. BFA represents The Bond Fund of America, whose Morningstar peer category is Intermediate Core Bond. SBF represents American Funds Strategic Bond Fund, whose Morningstar peer category is Intermediate Core-Plus Bond.
Results (%) as of December 31, 2020 (Class R-6) Average annual returns Gross/net 30-day Fund name Inception date Lifetime 10 years 5 years 1 year expense ratio SEC yield AMCAP Fund® 5/1/67 12.13% 14.02% 15.26% 21.79% 0.34%/0.34% 0.43% EuroPacific Growth Fund® 4/16/84 11.30 8.15 12.47 25.27 0.46/0.46 0.52 The Growth Fund of America® 12/1/73 14.42 15.66 18.97 38.28 0.30/0.30 0.33 New Perspective Fund® 3/13/73 13.02 13.04 16.85 33.81 0.42/0.42 0.57 Washington Mutual Investors FundSM 7/31/52 12.13 12.51 12.68 8.08 0.27/0.27 1.98 American Balanced Fund® 7/26/75 10.96 10.27 10.36 11.22 0.26/0.26 1.49 The Bond Fund of America® 5/28/74 7.82 4.37 5.21 11.11 0.23/0.23 1.01 American Funds Strategic Bond FundSM 3/18/16 6.70 – – 18.49 0.45/0.42 1.42 American Funds 2010 Target Date Retirement Fund® 2/1/07 5.45 6.99 7.55 9.25 0.30/0.30 2.33 American Funds 2015 Target Date Retirement Fund® 2/1/07 5.77 7.49 8.01 9.96 0.30/0.30 2.39 American Funds 2020 Target Date Retirement Fund® 2/1/07 6.11 8.14 8.57 10.99 0.31/0.31 2.26 American Funds 2025 Target Date Retirement Fund® 2/1/07 6.89 9.25 9.87 13.67 0.33/0.33 1.80 American Funds 2030 Target Date Retirement Fund® 2/1/07 7.55 10.08 11.06 15.16 0.35/0.35 1.65 American Funds 2035 Target Date Retirement Fund® 2/1/07 8.03 10.77 12.44 17.55 0.37/0.37 1.48 American Funds 2040 Target Date Retirement Fund® 2/1/07 8.26 11.09 12.99 18.77 0.38/0.38 1.41 American Funds 2045 Target Date Retirement Fund® 2/1/07 8.34 11.21 13.22 19.21 0.39/0.39 1.35 American Funds 2050 Target Date Retirement Fund® 2/1/07 8.39 11.29 13.36 19.42 0.39/0.39 1.28 American Funds 2055 Target Date Retirement Fund® 2/1/10 11.79 11.27 13.35 19.39 0.39/0.39 1.27 American Funds 2060 Target Date Retirement Fund® 3/27/15 11.17 – 13.35 19.44 0.40/0.40 1.26 American Funds 2065 Target Date Retirement FundSM 3/27/20 47.06 – – – 0.45/0.40 1.13 For American Funds 2065 Target Date Retirement Fund and American Funds Strategic Bond Fund, the investment adviser is currently reimbursing a portion of other expenses through at least January 31, 2021, and October 30, 2021, respectively. Without this reimbursement, the results would have been lower 7 and net expense ratios higher. The investment adviser may elect at its discretion to extend, modify or terminate the reimbursements at that time. Past results are not predictive of results in future periods. Investing outside the United States involves risks, such as currency fluctuations, periods of illiquidity and price volatility, as more fully described in the prospectus. These risks may be heightened in connection with investments in developing countries. The return of principal for bond funds and for funds with significant underlying bond holdings is not guaranteed. Fund shares are subject to the same interest rate, inflation and credit risks associated with the underlying bond holdings. Lower rated bonds are subject to greater fluctuations in value and risk of loss of income and principal than higher rated bonds. Higher yielding, higher risk bonds can fluctuate in price more than investment- grade bonds, so investors should maintain a long-term perspective. The use of derivatives involves a variety of risks, which may be different from, or greater than, the risks associated with investing in traditional cash securities, such as stocks and bonds. American Funds Strategic Bond Fund may engage in frequent and active trading of its portfolio securities, which may involve correspondingly greater transaction costs, adversely affecting the fund’s results. Although the target date portfolios are managed for investors on a projected retirement date time frame, the allocation strategy does not guarantee that investors’ retirement goals will be met. Investment professionals manage the portfolio, moving it from a more growth-oriented strategy to a more income-oriented focus as the target date gets closer. The target date is the year that corresponds roughly to the year in which an investor is assumed to retire and begin taking withdrawals. Investment professionals continue to manage each fund for approximately 30 years after it reaches its target date. We offer a range of share classes designed to meet the needs of retirement plan sponsors and participants. The different share classes incorporate varying levels of advisor compensation and service provider payments. Because Class R-6 shares do not include any recordkeeping payments, expenses are lower and results are higher. Other share classes that include recordkeeping costs have higher expenses and lower results than Class R-6. Class R-6 shares were first offered on May 1, 2009. Class R-6 share results prior to the date of first sale are hypothetical based on the results of the original share class of the fund without a sales charge, adjusted for typical estimated expenses. Please see the fund’s prospectus for more information on specific expenses. Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The expense ratio is as of the fund’s prospectus available at the time of publication. When applicable, investment results reflect fee waivers and/or expense reimbursements, without which the results would have been lower. Please see capitalgroup.com for more information. If used after March 31, 2021, this brochure must be accompanied by a current American Funds quarterly statistical update. All Capital Group trademarks mentioned are owned by The Capital Group Companies, Inc., an affiliated company or fund. All other company and product names mentioned are the property of their respective companies. Bloomberg® is a trademark of Bloomberg Finance L.P. (collectively with its affiliates, “Bloomberg”). Barclays® is a trademark of Barclays Bank Plc (collectively with its affiliates, “Barclays”), used under license. Neither Bloomberg nor Barclays approves or endorses this material, guarantees the accuracy or completeness of any information herein and, to the maximum extent allowed by law, neither shall have any liability or responsibility for injury or damages arising in connection therewith. Morningstar data ©2020 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. MSCI has not approved, reviewed or produced this report, makes no express or implied warranties or representations and is not liable whatsoever for any data in the report. You may not redistribute the MSCI data or use it as a basis for other indices or investment products. The S&P 500 Composite Index (“Index”) is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by Capital Group. Copyright © 2020 S&P Dow Jones Indices LLC, a division of S&P Global, and/or its affiliates. All rights reserved. Redistribution or reproduction in whole or in part is prohibited without written permission of S&P Dow Jones Indices LLC. Frank Russell Company (“Russell”) is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes and/or Russell ratings or underlying data and no party may rely on any Russell Indexes and/or Russell ratings and/or underlying data contained in this communication. No further distribution of Russell Data is permitted without Russell’s express written consent. Russell does not promote, sponsor or endorse the content of this communication. Index definitions: Bloomberg Barclays U.S. Aggregate Index represents the U.S. investment-grade fixed-rate bond market and consists of U.S. Treasury and government related bonds, corporate securities and asset-backed securities. MSCI All Country World Index is a free float-adjusted, market capitalization-weighted index that is designed to measure results of more than 40 developed and developing country markets. Results reflect dividends gross of withholding taxes through December 31, 2000, and dividends net of withholding taxes thereafter. MSCI All Country World Index ex USA is a free float-adjusted, market capitalization-weighted index that is designed to measure results of more than 40 developed and emerging equity markets, excluding the United States. Results reflect dividends gross of withholding taxes through December 31, 2000, and dividends net of withholding taxes thereafter. MSCI World Index is a free float-adjusted, market capitalization weighted index that is designed to measure results of more than 20 developed equity markets. Results reflect dividends net of withholding taxes. MSCI EAFE (Europe, Australasia, Far East) Index is a free float-adjusted, market capitalization-weighted index that is designed to measure developed equity market results, excluding the United States and Canada. Results reflect dividends net of withholding taxes. Standard & Poor’s 500 Composite Index is a market capitalization-weighted index based on the average weighted results of approximately 500 widely held U.S. common stocks. The Russell 1000 Index represents the 1000 largest U.S.-traded public corporations. The Growth Index includes those companies with growth characteristics. Morningstar category definitions: The Morningstar U.S. Large categories represent the averages of the stocks in the top 70% of the capitalization of the U.S., foreign or global equity market that are defined as large cap. The Large Growth category is based on fast growth (high growth rates for earnings, sales, book value, and cash flow) and high valuations (high price ratios and low dividend yields). Large Blend funds invest in a portfolio of large-cap stocks in which neither growth nor value predominates. The World Large Stock category portfolios have few geographical limitations. It is common for these portfolios to invest the majority of their assets in the U.S., Europe, and Japan, with the remainder divided among the globe’s smaller markets. These portfolios typically have 20%–60% of assets in U.S. stocks. The Foreign Large Growth category represents an average of funds that seek capital appreciation by investing in large international stocks that are growth-oriented. Large-cap foreign stocks have market capitalizations greater than $5 billion. Growth is defined based on high price/book and price/cash-flow ratios, relative to the MSCI EAFE Index. The U.S. Allocation 50%–70% Equity category includes funds that typically seek to provide both income and capital appreciation by investing in multiple asset classes, including stocks, bonds, and cash. These portfolios are dominated by domestic holdings and have equity exposures between 50% and 70%. The Intermediate Core Bond category includes portfolios that invest primarily in investment-grade U.S. fixed-income issues including government, corporate, and securitized debt, and hold less than 5% in below-investment-grade exposures. Their durations (a measure of interest-rate sensitivity) typically range between 75% and 125% of the three- year average of the effective duration of the Morningstar Core Bond Index. The Intermediate Core-Plus Bond category includes portfolios that invest primarily in investment-grade U.S. fixed-income issues including government, corporate, and securitized debt, but generally have greater flexibility than core offerings to hold non-core sectors such as corporate high yield, bank loan, emerging-markets debt, and non-U.S. currency exposures. Their durations typically range between 75% and 125% of the three-year average of the effective duration of the Morningstar Core Bond Index. All Capital Group trademarks mentioned are owned by The Capital Group Companies, Inc., an affiliated company or fund. All other company and product names mentioned are the property of their respective companies. American Funds Distributors, Inc., member FINRA.
Lit. No. RPR6BR-004-0121P Printed in USA CGD/TM/10421-S82364 © 2021 Capital Group. All rights reserved. April 20, 2021
Target Date Fund Comparison
Prepared by: Thu Vu Directors/Officers/Employees Phone: 2136154305
This report is not complete unless all pages, as noted below, are included. Please read the information in Important American Funds Disclosures.
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
If CITs are included: For financial professionals only. Not for use with the public. Target Date ProView - Overview
Manager & Fund Profile
American Funds Target Date Fidelity Freedom K6 T. Rowe Price Retirement I Vanguard Target Retirement Retirement R6 Inv Series-Level Data
Vehicle Type Mutual Fund Mutual Fund Mutual Fund Mutual Fund
Target Date AUM $201,437.07M $221,637.19M $174,168.29M $614,483.02M
Series Inception Date 02/01/07 10/17/96 09/30/02 10/27/03
Max Sales Charge ------
To vs. Through Through Through Through Through
% Active 100.00% 91.61% 86.18% 0.00%
Avg. Manager Tenure 4.1 yrs 8.5 yrs 6.7 yrs 8.1 yrs
Firm-Level Data
Firm AUM $2.58T $3.68T $1.02T $7.56T As of 03/31/21 As of 03/31/21 As of 03/31/21 As of 03/31/21 (updated monthly) (updated monthly) (updated monthly) (updated monthly)
For Capital Group portfolio managers, the years of experience may include those spent with affiliates. The portfolio managers shown are as publicly disclosed.
Expenses, Returns & Volatility Snapshot 1, 2, 3
Figures shown are past results and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely. For current information and month-end results, visit americanfundsretirement.com. Results shown are at net asset value. If the maximum sales charge had been deducted, results would have been lower. 5-Year Net/Gross Expense Ratio 5-Year Total Return 5-Year Annualized Returns Percentile Rank Standard Deviation 2055 2035 2020 2055 2035 2020 2055 2035 2020 2055 2035 2020
American Funds Target Date Retirement 0.39 0.37 0.31 14.18 13.08 8.62 01 01 55 12.71 11.44 6.84 R6
Fidelity Freedom K6 0.50 0.49 0.43 13.93 13.44 10.01 04 01 05 13.70 12.78 8.45
T. Rowe Price Retirement I 0.52 0.50 0.42 14.02 12.99 10.25 04 04 01 13.65 12.42 9.38
Vanguard Target Retirement Inv 0.15 0.14 0.13 12.92 11.57 8.92 42 41 34 13.34 11.30 7.79
Mutual Fund Category Average 0.73 0.72 0.65 12.69 11.30 8.35 N/A N/A N/A 13.66 11.53 7.70
Source: Morningstar. Returns as of 03/31/21 (updated monthly). Non-American Funds may include waivers and/or expense reimbursements, without which results would have been lower and expenses higher. Please refer to each fund's prospectus for details. Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The expense ratios are as of each fund's prospectus available at the time of publication and include the weighted average expenses of the underlying funds. The expense ratio for the American Funds 2065 Target Date Retirement Fund is estimated. The investment adviser is currently reimbursing a portion of the other expenses for the American Funds 2065 Target Date Retirement Fund. This reimbursement will be in effect through at least January 31, 2021. The adviser may elect at its discretion to extend, modify or terminate the reimbursement at that time. When applicable, investment results reflect expense reimbursements, without which results would have been lower. For more information on the American Funds fee waivers and expense reimbursements, visit capitalgroup.com. See the Appendix for descriptions of Morningstar's ranking methodology.
Read Principal Risks (see disclosure for definitions) in the Appendix. Page 1 Target Date ProView - Returns
Returns: Rankings By Vintage A series' total return percentile rank shows its place among its peers, while its consistent results over time can demonstrate effective strategy and investment management.
American Funds Target Date Fidelity Freedom K6 T. Rowe Price Retirement I Vanguard Target Retirement Inv Retirement R6 5-Year Total Return Percentile Rank The Morningstar comparison universe consists of mutual funds within the respective Morningstar target date categories. In this setting, only mutual funds are shown in the charts. The categories include both active and passive target date series, as well as those that are managed both "to" and "through" retirement. Approximately one-third of the series within the 2000-2010 category have a target date of 2005. Rankings are based on the funds' average annual total returns within the applicable Morningstar categories. The Morningstar rankings do not reflect the effects of sales charges, account fees or taxes. Past results are not predictive of results in future periods. When applicable, investment results reflect fee waivers and/or expense reimbursements, without which results would have been lower. Please see capitalgroup.com for more information.
Years to Retirement 45 40 35 30 25 20 15 10 5 Retirement -5 -10 -15 -20
1st Quartile
2nd Quartile
3rd Quartile
4th Quartile 5-Year Total Return Percentile Rank
Accumulation Transition Distribution
Vintage 2065 2060 2055 2050 2045 2040 2035 2030 2025 2020 2015 2010 2005 -- RI
Number of Ranked Funds 109 109 145 149 148 149 148 149 151 109 74 76 76 N/A 116 Source: Morningstar. Rankings are based on the funds' average annual total returns as of 03/31/21 (updated monthly). The Morningstar rankings do not reflect the effects of sales charges, account fees or taxes. Investment results assume all distributions are reinvested and reflect applicable fees and expenses. When applicable, investment results reflect fee waivers and/or expense reimbursements, without which results would have been lower. Non-American Funds may include waivers and/or expense reimbursements, without which results would have been lower. Please refer to each fund's prospectus for details. For more information on American Funds fee waivers and expense reimbursements, visit capitalgroup.com.
Read Principal Risks (see disclosure for definitions) in the Appendix. Page 2 Target Date ProView - Returns
Returns: Rankings By Vintage A series' total return percentile rank shows its place among its peers, while its consistent results over time can demonstrate effective strategy and investment management.
5-Year Total Return Percentile Rank 1, 2 The Morningstar comparison universe consists of mutual funds within the respective Morningstar target date categories. In this setting, only mutual funds are shown in the charts. The categories include both active and passive target date series, as well as those that are managed both "to" and "through" retirement. Approximately one-third of the series within the 2000-2010 category have a target date of 2005. Rankings are based on the funds' average annual total returns within the applicable Morningstar categories. The Morningstar rankings do not reflect the effects of sales charges, account fees or taxes. Past results are not predictive of results in future periods. When applicable, investment results reflect fee waivers and/or expense reimbursements, without which results would have been lower. Please see capitalgroup.com for more information.
Accumulation Phase Transition Phase Distribution Phase 2065 2060 2055 2050 2045 2040 2035 2030 2025 2020 2015 2010 2005 Ret. Inc. --
5-Year Total Return Percentile Rank Avg. Annual Total Returns % American Funds Target Date Retirement R6 -- 1 1 1 1 1 1 12 24 55 41 37 N/A N/A N/A Returns N/A 14.15 14.18 14.19 14.02 13.75 13.08 11.46 10.00 8.62 7.95 7.40 N/A N/A N/A Fidelity Freedom K6 -- 7 4 4 1 1 1 2 3 5 6 10 72 69 N/A Returns N/A 13.91 13.93 13.97 13.95 13.93 13.44 12.08 10.76 10.01 9.09 7.96 6.80 5.79 N/A T. Rowe Price Retirement I -- 4 4 3 1 5 4 1 1 1 1 1 10 N/A N/A Returns N/A 14.06 14.02 14.03 14.02 13.69 12.99 12.21 11.26 10.25 9.30 8.51 7.92 N/A N/A Vanguard Target Retirement Inv -- 57 42 40 31 38 41 35 27 34 75 N/A N/A 46 N/A Returns N/A 12.91 12.92 12.93 12.89 12.36 11.57 10.77 9.95 8.92 7.45 N/A N/A 6.38 N/A
Source: Morningstar. Rankings are based on the funds' average annual total returns as of 03/31/21 (updated monthly). The Morningstar rankings do not reflect the effects of sales charges, account fees or taxes. Investment results assume all distributions are reinvested and reflect applicable fees and expenses. When applicable, investment results reflect fee waivers and/or expense reimbursements, without which results would have been lower. Non-American Funds may include waivers and/or expense reimbursements, without which results would have been lower. Please refer to each fund's prospectus for details. For more information on American Funds fee waivers and expense reimbursements, visit capitalgroup.com.
Read Principal Risks (see disclosure for definitions) in the Appendix. Page 3 Target Date ProView - Expenses
Expenses: Net Expense Ratio The net expense ratios for each target date series show how fees vary.
American Funds Target Date Fidelity Freedom K6 T. Rowe Price Retirement I Vanguard Target Retirement Mutual Funds Category Retirement R6 Inv Average
Net Expense Ratio 3
Years to Retirement 45 40 35 30 25 20 15 10 5 Retirement -5 -10 -15 0.8
0.6
0.4
0.2 Net Expense Ratio (%)
0.0 Accumulation Transition Distribution
Vintage 2065 2060 2055 2050 2045 2040 2035 2030 2025 2020 2015 2010 2005 RI RI
Source: Morningstar. Net expense ratios as of each fund's most recent prospectus. Non-American Funds may include waivers and/or expense reimbursements, without which expenses would have been higher. Please refer to each fund's prospectus for details. The expense ratios are as of each fund's prospectus available at the time of publication and include the weighted average expenses of the underlying funds. The expense ratio for the American Funds 2065 Target Date Retirement Fund is estimated. The investment adviser is currently reimbursing a portion of the other expenses for the American Funds 2065 Target Date Retirement Fund. This reimbursement will be in effect through at least January 31, 2021. The adviser may elect at its discretion to extend, modify or terminate the reimbursement at that time. For more information on American Funds fee waivers and expense reimbursements, visit capitalgroup.com.
Net Expense Ratio (%) 3
Accumulation Phase Transition Phase Distribution Phase 2065 2060 2055 2050 2045 2040 2035 2030 2025 2020 2015 2010 2005 Ret. Inc. --
American Funds Target Date Retirement R6 0.40 0.40 0.39 0.39 0.39 0.38 0.37 0.35 0.33 0.31 0.30 0.30 N/A N/A N/A Fidelity Freedom K6 0.50 0.50 0.50 0.50 0.50 0.50 0.49 0.47 0.45 0.43 0.41 0.39 0.37 N/A 0.37 T. Rowe Price Retirement I 0.52 0.52 0.52 0.52 0.51 0.51 0.50 0.49 0.46 0.42 0.40 0.37 0.37 N/A N/A Vanguard Target Retirement Inv 0.15 0.15 0.15 0.15 0.15 0.14 0.14 0.14 0.13 0.13 0.12 N/A N/A N/A 0.12 Mutual Fund Category Average 0.73 0.73 0.73 0.74 0.73 0.73 0.72 0.71 0.70 0.65 0.61 0.57 0.57 0.00 0.71
Source: Morningstar. Net expense ratios as of each fund's most recent prospectus. Non-American Funds may include waivers and/or expense reimbursements, without which expenses would have been higher. Please refer to each fund's prospectus for details. The expense ratios are as of each fund's prospectus available at the time of publication and include the weighted average expenses of the underlying funds. The expense ratio for the American Funds 2065 Target Date Retirement Fund is estimated. The investment adviser is currently reimbursing a portion of the other expenses for the American Funds 2065 Target Date Retirement Fund. This reimbursement will be in effect through at least January 31, 2021. The adviser may elect at its discretion to extend, modify or terminate the reimbursement at that time. For more information on American Funds fee waivers and expense reimbursements, visit capitalgroup.com.
Read Principal Risks (see disclosure for definitions) in the Appendix. Page 4 Target Date ProView - Risk
Risk: Standard Deviation & Sharpe Ratio Standard deviation measures variation around the average return and quantifies an element of risk, while the Sharpe ratio is a measure of risk-adjusted returns and quantifies the amount of reward per unit of risk.
American Funds Target Date Fidelity Freedom K6 T. Rowe Price Retirement I Vanguard Target Retirement Mutual Funds Category Retirement R6 Inv Average
5-Year Standard Deviation
Years to Retirement 45 40 35 30 25 20 15 10 5 Retirement -5 -10 -15 -20 14.0 More Volatility 12.0
10.0
8.0
6.0
4.0
5-Year Standard Deviation Less Volatility 2.0 Accumulation Transition Distribution
Vintage 2065 2060 2055 2050 2045 2040 2035 2030 2025 2020 2015 2010 2005 -- RI
Source: Morningstar, as of 03/31/21 (updated monthly).
5-Year Sharpe Ratio
Years to Retirement 45 40 35 30 25 20 15 10 5 Retirement -5 -10 -15 -20 1.2 Higher Risk-Adjusted 1.1 Returns
1.1
1.0
1.0
5-Year Sharpe Ratio 0.9 Lower Risk-Adjusted Returns 0.9 Accumulation Transition Distribution
Vintage 2065 2060 2055 2050 2045 2040 2035 2030 2025 2020 2015 2010 2005 -- RI
Source: Morningstar, as of 03/31/21 (updated monthly).
Read Principal Risks (see disclosure for definitions) in the Appendix. Page 5 S&P 500
Target Date ProView - Risk
Risk: Capture Ratio Upside and downside capture ratios measure how a fund has fared during rising and declining markets - and can offer additional perspective when evaluated together. The overall capture ratio shows both upside and downside ratios in a single data point and reveals the balance between potential risk and return. An overall capture ratio greater than one indicates a fund's historical upside has exceeded its downside.
American Funds Target Date Fidelity Freedom K6 T. Rowe Price Retirement I Vanguard Target Retirement Mutual Funds Category Retirement R6 Inv Average
Upside Capture Ratio vs. S&P 500 Overall Capture Ratio = Downside Capture Ratio vs. S&P 500
5-Year Upside Capture Ratio vs. S&P 500 5-Year Downside Capture Ratio vs. S&P 500
90.00 100.00 More Gain S&P 500 More Loss
90.00 80.00
80.00 70.00 70.00 60.00 60.00
50.00 50.00 5-Year Upside Capture Ratio (%) 5-Year Downside Capture Ratio (%) Less Gain Less Loss 40.00 40.00 Accumulation Transition Distribution Accumulation Transition Distribution
Vintage 2055 2035 2020 Vintage 2055 2035 2020
Source: Morningstar, as of 03/31/21 (updated monthly). Source: Morningstar, as of 03/31/21 (updated monthly).
5-Year Overall Capture Ratio
Years to Retirement 45 40 35 30 25 20 15 10 5 Retirement -5 -10 -15 -20 1.80 More Favorable
1.60
1.40
1.20
1.00
5-Year Overall Capture Ratio (%) Less Favorable 0.80 Accumulation Transition Distribution
Vintage 2065 2060 2055 2050 2045 2040 2035 2030 2025 2020 2015 2010 2005 -- RI
Source: Morningstar, as of 03/31/21 (updated monthly).
Read Principal Risks (see disclosure for definitions) in the Appendix. Page 6 Target Date ProView - Glide Path
Glide Path: Asset Mix Over Time A typical glide path shows how equity exposure and its implied market risk decline over time. Comparing glide paths can help to highlight how managers differ in balancing equities with other assets to counter various risks.
American Funds Target Date Fidelity Freedom K6 T. Rowe Price Retirement I Vanguard Target Retirement Mutual Funds Category Retirement R6 (Managed through (Managed through Inv Average (Managed through retirement) retirement) (Managed through retirement) retirement)
Glide Path
Years to Retirement 45 40 35 30 25 20 15 10 5 Retirement -5 -10 -15 -20 100%
80%
60%
40% Percentage of Equity Asset Mix
20%
0% Accumulation Transition Distribution
Vintage 2065 2060 2055 2050 2045 2040 2035 2030 2025 2020 2015 2010 2005 -- RI This view features existing vintages and not projected allocations. As a result, a target date series created more recently may appear to have an incomplete glide path even when its assets may be managed through retirement. Source: Morningstar. Asset allocation as of 03/31/21 (updated quarterly per holdings reported).
Read Principal Risks (see disclosure for definitions) in the Appendix. Page 7 Target Date ProView - Glide Path
The Deeper View: Allocation Within Asset Classes A closer look can reveal how managers shift assets among equities with varying degrees of volatility to help manage market risk while maintaining sufficient equity exposure for growth. It also shows whether managers keep allocations static or evolving over time.
Volatility Over Time - Equity American Funds Target Date Retirement R6 Fidelity Freedom K6 100% 100% High-Volatility Equities Underlying funds with 3-year standard deviation 75% 75% 10% greater than the S&P 500 50% 50% Medium-Volatility Equities 25% 25% Underlying funds with 3-year standard deviation similar to the S&P 500 0% 0% Accumulation Transition Distribution Accumulation Transition Distribution Low-Volatility Equities 2065 2035 2020 2065 2035 2020 Underlying funds with 3-year standard deviation T. Rowe Price Retirement I Vanguard Target Retirement Inv 10% less than the S&P 500 100% 100%
75% 75%
50% 50%
25% 25%
0% 0% Accumulation Transition Distribution Accumulation Transition Distribution 2065 2035 2020 2065 2035 2020 Source: Morningstar. Asset allocation as of 03/31/21 (updated quarterly per holdings reported). Standard deviation as of 03/31/21 (updated monthly).
Volatility Over Time - Fixed Income American Funds Target Date Retirement R6 Fidelity Freedom K6 100% 100% High-Volatility Fixed Income Underlying funds with 3-year standard deviation 75% 75% 10% greater than Barclays U.S.Aggregate Index 50% 50% Medium-Volatility Fixed Income 25% 25% Underlying funds with 3-year standard deviation similar to the Barclays U.S.Aggregate Index 0% 0% Accumulation Transition Distribution Accumulation Transition Distribution Low-Volatility Fixed Income 2065 2035 2020 2065 2035 2020 Underlying funds with 3-year standard deviation T. Rowe Price Retirement I Vanguard Target Retirement Inv 10% less than the Barclays U.S.Aggregate Index 100% 100%
75% 75%
50% 50%
25% 25%
0% 0% Accumulation Transition Distribution Accumulation Transition Distribution 2065 2035 2020 2065 2035 2020 Source: Morningstar. Asset allocation as of 03/31/21 (updated quarterly per holdings reported). Standard deviation as of 03/31/21 (updated monthly).
Read Principal Risks (see disclosure for definitions) in the Appendix. Page 8 Target Date ProView - Appendix
APPENDIX Returns, Expenses, Definitions and Disclosures
Page 9 Target Date ProView - Appendix
Returns: Average Annual Returns, Monthly at Net Asset Value (%) 1, 2 Figures shown are past results and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely. For current information and month-end results, visit americanfundsretirement.com. Results shown are at net asset value. If the maximum sales charge had been deducted, results would have been lower.
Accumulation Phase Transition Phase Distribution Phase 2065 2060 2055 2050 2045 2040 2035 2030 2025 2020 2015 2010 2005 Ret. Inc. --
1-Year American Funds Target Date Retirement R6 51.08 50.79 50.93 51.05 50.05 48.82 44.36 35.52 29.70 24.67 23.28 20.95 N/A N/A N/A Fidelity Freedom K6 57.93 58.07 58.01 57.97 58.05 57.95 52.14 42.45 36.91 32.85 27.58 22.23 17.02 13.97 N/A T. Rowe Price Retirement I -- 58.02 57.89 57.89 57.87 54.97 50.72 46.21 41.19 35.97 32.21 29.09 26.75 N/A N/A Vanguard Target Retirement Inv 51.66 51.75 51.79 51.82 51.64 46.64 41.87 37.19 32.57 27.16 19.57 N/A N/A 17.02 N/A Mutual Fund Category Average 53.66 53.66 52.87 52.03 50.64 47.12 42.17 35.96 30.22 26.41 24.25 21.21 21.21 17.67 --
3-Year American Funds Target Date Retirement R6 N/A 13.41 13.45 13.47 13.29 13.07 12.37 10.89 9.92 8.76 8.32 7.76 N/A N/A N/A Fidelity Freedom K6 N/A 12.96 12.93 12.97 12.95 12.96 12.20 10.95 10.13 9.46 8.52 7.55 6.55 5.96 N/A T. Rowe Price Retirement I N/A 13.35 13.32 13.32 13.30 12.92 12.24 11.55 10.75 9.90 9.37 8.86 8.38 N/A N/A Vanguard Target Retirement Inv 12.02 12.06 12.07 12.09 12.03 11.43 10.86 10.26 9.62 8.73 7.41 N/A N/A 7.06 N/A Mutual Fund Category Average 11.88 11.88 11.80 11.71 11.57 11.15 10.58 9.73 8.84 8.21 7.94 7.44 7.44 6.59 --
5-Year American Funds Target Date Retirement R6 N/A 14.15 14.18 14.19 14.02 13.75 13.08 11.46 10.00 8.62 7.95 7.40 N/A N/A N/A Fidelity Freedom K6 N/A 13.91 13.93 13.97 13.95 13.93 13.44 12.08 10.76 10.01 9.09 7.96 6.80 5.79 N/A T. Rowe Price Retirement I N/A 14.06 14.02 14.03 14.02 13.69 12.99 12.21 11.26 10.25 9.30 8.51 7.92 N/A N/A Vanguard Target Retirement Inv N/A 12.91 12.92 12.93 12.89 12.36 11.57 10.77 9.95 8.92 7.45 N/A N/A 6.38 N/A Mutual Fund Category Average 12.79 12.79 12.69 12.54 12.43 11.94 11.30 10.29 9.18 8.35 7.88 7.17 7.17 6.12 --
Source: Morningstar. Average annual returns as of 03/31/21 (updated monthly). Non-American Funds may include waivers and/or reimbursements, without which results would have been lower. Please refer to each fund's prospectus for details. Investment results assume all distributions are reinvested and reflect applicable fees and expenses. When applicable, investment results reflect expense reimbursements, without which results would have been lower. For more information on American Funds fee waivers and expense reimbursements, visit capitalgroup.com.
Page 10 Target Date ProView - Appendix
Returns: Average Annual Returns, Monthly at Net Asset Value (%) 1, 2 Figures shown are past results and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely. For current information and month-end results, visit americanfundsretirement.com. Results shown are at net asset value. If the maximum sales charge had been deducted, results would have been lower.
Accumulation Phase Transition Phase Distribution Phase 2065 2060 2055 2050 2045 2040 2035 2030 2025 2020 2015 2010 2005 Ret. Inc. --
10-Year American Funds Target Date Retirement R6 -- -- 11.25 11.27 11.18 11.05 10.70 9.93 9.07 8.01 7.39 6.90 N/A N/A N/A Fidelity Freedom K6 ------9.77 9.80 9.77 9.50 8.76 8.06 7.43 6.90 6.26 5.31 4.48 N/A T. Rowe Price Retirement I ------N/A N/A Vanguard Target Retirement Inv -- -- 10.06 10.06 10.04 9.79 9.33 8.84 8.31 7.68 6.73 N/A N/A 5.66 N/A Mutual Fund Category Average -- -- 9.49 9.42 9.31 9.10 8.68 8.06 7.41 7.01 6.59 5.85 5.85 4.84 --
Lifetime Inception Date American Funds Target Date Retirement R6 52.54 11.43 11.92 13.13 13.06 12.22 12.61 11.93 11.03 9.81 9.05 8.49 N/A N/A N/A 03/27/20 03/27/15 02/01/10 07/13/09 07/13/09 07/27/09 07/13/09 07/13/09 07/13/09 07/13/09 07/13/09 07/13/09 N/A N/A N/A Fidelity Freedom K6 19.47 12.75 12.74 12.76 12.52 12.74 12.11 10.82 9.82 9.13 8.23 7.23 6.18 5.43 N/A 06/28/19 06/07/17 06/07/17 06/07/17 06/07/17 06/07/17 06/07/17 06/07/17 06/07/17 06/07/17 06/07/17 06/07/17 06/07/17 06/07/17 N/A T. Rowe Price Retirement I 18.82 14.01 14.04 14.07 14.06 13.76 13.10 12.35 11.45 10.47 9.52 8.74 8.11 N/A N/A 10/14/20 09/29/15 09/29/15 09/29/15 09/29/15 09/29/15 09/29/15 09/29/15 09/29/15 09/29/15 09/29/15 09/29/15 09/29/15 N/A N/A Vanguard Target Retirement Inv 12.07 11.32 11.41 8.24 8.70 8.03 8.11 7.44 7.34 6.82 6.41 N/A N/A 5.56 N/A 07/12/17 01/19/12 08/18/10 06/07/06 10/27/03 06/07/06 10/27/03 06/07/06 10/27/03 06/07/06 10/27/03 N/A N/A 10/27/03 N/A Mutual Fund Category Average ------
Source: Morningstar. Average annual returns as of 03/31/21 (updated monthly). Non-American Funds may include waivers and/or reimbursements, without which results would have been lower. Please refer to each fund's prospectus for details. Investment results assume all distributions are reinvested and reflect applicable fees and expenses. When applicable, investment results reflect expense reimbursements, without which results would have been lower. For more information on American Funds fee waivers and expense reimbursements, visit capitalgroup.com. The inception dates displayed pertain either to each target date vintage or to the selected share class, whichever is later.
Page 11 Target Date ProView - Appendix
Returns: Average Annual Returns, Quarterly at Net Asset Value (%) 1, 2 Figures shown are past results and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely. For current information and month-end results, visit americanfundsretirement.com. Results shown are at net asset value. If the maximum sales charge had been deducted, results would have been lower.
Accumulation Phase Transition Phase Distribution Phase 2065 2060 2055 2050 2045 2040 2035 2030 2025 2020 2015 2010 2005 Ret. Inc. --
1-Year American Funds Target Date Retirement R6 51.08 50.79 50.93 51.05 50.05 48.82 44.36 35.52 29.70 24.67 23.28 20.95 N/A N/A N/A Fidelity Freedom K6 57.93 58.07 58.01 57.97 58.05 57.95 52.14 42.45 36.91 32.85 27.58 22.23 17.02 13.97 N/A T. Rowe Price Retirement I -- 58.02 57.89 57.89 57.87 54.97 50.72 46.21 41.19 35.97 32.21 29.09 26.75 N/A N/A Vanguard Target Retirement Inv 51.66 51.75 51.79 51.82 51.64 46.64 41.87 37.19 32.57 27.16 19.57 N/A N/A 17.02 N/A Mutual Fund Category Average 53.66 53.66 52.87 52.03 50.64 47.12 42.17 35.96 30.22 26.41 24.25 21.21 21.21 17.67 --
3-Year American Funds Target Date Retirement R6 -- 13.41 13.45 13.47 13.29 13.07 12.37 10.89 9.92 8.76 8.32 7.76 N/A N/A N/A Fidelity Freedom K6 -- 12.96 12.93 12.97 12.95 12.96 12.20 10.95 10.13 9.46 8.52 7.55 6.55 5.96 N/A T. Rowe Price Retirement I -- 13.35 13.32 13.32 13.30 12.92 12.24 11.55 10.75 9.90 9.37 8.86 8.38 N/A N/A Vanguard Target Retirement Inv 12.02 12.06 12.07 12.09 12.03 11.43 10.86 10.26 9.62 8.73 7.41 N/A N/A 7.06 N/A Mutual Fund Category Average 11.88 11.88 11.80 11.71 11.57 11.15 10.58 9.73 8.84 8.21 7.94 7.44 7.44 6.59 --
5-Year American Funds Target Date Retirement R6 -- 14.15 14.18 14.19 14.02 13.75 13.08 11.46 10.00 8.62 7.95 7.40 N/A N/A N/A Fidelity Freedom K6 -- 13.91 13.93 13.97 13.95 13.93 13.44 12.08 10.76 10.01 9.09 7.96 6.80 5.79 N/A T. Rowe Price Retirement I -- 14.06 14.02 14.03 14.02 13.69 12.99 12.21 11.26 10.25 9.30 8.51 7.92 N/A N/A Vanguard Target Retirement Inv -- 12.91 12.92 12.93 12.89 12.36 11.57 10.77 9.95 8.92 7.45 N/A N/A 6.38 N/A Mutual Fund Category Average 12.79 12.79 12.69 12.54 12.43 11.94 11.30 10.29 9.18 8.35 7.88 7.17 7.17 6.12 --
Source: Morningstar. Average annual returns as of 03/31/21 (updated quarterly). Non-American Funds may include waivers and/or reimbursements, without which results would have been lower. Please refer to each fund's prospectus for details. Investment results assume all distributions are reinvested and reflect applicable fees and expenses. When applicable, investment results reflect expense reimbursements, without which results would have been lower. For more information on American Funds fee waivers and expense reimbursements, visit capitalgroup.com.
Page 12 Target Date ProView - Appendix
Returns: Average Annual Returns, Quarterly at Net Asset Value (%) 1, 2 Figures shown are past results and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely. For current information and month-end results, visit americanfundsretirement.com. Results shown are at net asset value. If the maximum sales charge had been deducted, results would have been lower.
Accumulation Phase Transition Phase Distribution Phase 2065 2060 2055 2050 2045 2040 2035 2030 2025 2020 2015 2010 2005 Ret. Inc. --
10-Year American Funds Target Date Retirement R6 -- -- 11.25 11.27 11.18 11.05 10.70 9.93 9.07 8.01 7.39 6.90 N/A N/A N/A Fidelity Freedom K6 ------9.77 9.80 9.77 9.50 8.76 8.06 7.43 6.90 6.26 5.31 4.48 N/A T. Rowe Price Retirement I ------N/A N/A Vanguard Target Retirement Inv -- -- 10.06 10.06 10.04 9.79 9.33 8.84 8.31 7.68 6.73 N/A N/A 5.66 N/A Mutual Fund Category Average -- -- 9.49 9.42 9.31 9.10 8.68 8.06 7.41 7.01 6.59 5.85 5.85 4.84 --
Lifetime Inception Date American Funds Target Date Retirement R6 52.54 11.43 11.92 13.13 13.06 12.22 12.61 11.93 11.03 9.81 9.05 8.49 N/A N/A N/A 03/27/20 03/27/15 02/01/10 07/13/09 07/13/09 07/27/09 07/13/09 07/13/09 07/13/09 07/13/09 07/13/09 07/13/09 N/A N/A N/A Fidelity Freedom K6 19.47 12.75 12.74 12.76 12.52 12.74 12.11 10.82 9.82 9.13 8.23 7.23 6.18 5.43 N/A 06/28/19 06/07/17 06/07/17 06/07/17 06/07/17 06/07/17 06/07/17 06/07/17 06/07/17 06/07/17 06/07/17 06/07/17 06/07/17 06/07/17 N/A T. Rowe Price Retirement I 18.82 14.01 14.04 14.07 14.06 13.76 13.10 12.35 11.45 10.47 9.52 8.74 8.11 N/A N/A 10/14/20 09/29/15 09/29/15 09/29/15 09/29/15 09/29/15 09/29/15 09/29/15 09/29/15 09/29/15 09/29/15 09/29/15 09/29/15 N/A N/A Vanguard Target Retirement Inv 12.07 11.32 11.41 8.24 8.70 8.03 8.11 7.44 7.34 6.82 6.41 N/A N/A 5.56 N/A 07/12/17 01/19/12 08/18/10 06/07/06 10/27/03 06/07/06 10/27/03 06/07/06 10/27/03 06/07/06 10/27/03 N/A N/A 10/27/03 N/A Mutual Fund Category Average ------
Source: Morningstar. Average annual returns as of 03/31/21 (updated quarterly). Non-American Funds may include waivers and/or reimbursements, without which results would have been lower. Please refer to each fund's prospectus for details. Investment results assume all distributions are reinvested and reflect applicable fees and expenses. When applicable, investment results reflect expense reimbursements, without which results would have been lower. For more information on American Funds fee waivers and expense reimbursements, visit capitalgroup.com. The inception dates displayed pertain either to each target date vintage or to the selected share class, whichever is later.
Page 13 Target Date ProView - Appendix
Returns: Average Annual Returns, Monthly at Maximum Offering Price (%) 1, 2 Figures shown are past results and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely. For current information and month-end results, visit americanfundsretirement.com.
Accumulation Phase Transition Phase Distribution Phase 2065 2060 2055 2050 2045 2040 2035 2030 2025 2020 2015 2010 2005 Ret. Inc. --
1-Year American Funds Target Date Retirement R6 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Fidelity Freedom K6 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A T. Rowe Price Retirement I N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Vanguard Target Retirement Inv N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Mutual Fund Category Average 52.99 52.99 52.21 51.36 50.00 46.47 41.55 35.33 29.65 25.99 23.90 20.83 20.83 16.94 --
3-Year American Funds Target Date Retirement R6 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Fidelity Freedom K6 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A T. Rowe Price Retirement I N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Vanguard Target Retirement Inv N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Mutual Fund Category Average 11.76 11.76 11.65 11.56 11.43 11.00 10.43 9.58 8.68 8.09 7.84 7.34 7.34 6.38 --
5-Year American Funds Target Date Retirement R6 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Fidelity Freedom K6 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A T. Rowe Price Retirement I N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Vanguard Target Retirement Inv N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Mutual Fund Category Average 12.69 12.69 12.58 12.44 12.32 11.83 11.20 10.19 9.08 8.27 7.80 7.08 7.08 5.99 --
Source: Morningstar. Average annual returns as of 03/31/21 (updated monthly). Non-American Funds may include waivers and/or reimbursements, without which results would have been lower. Please refer to each fund's prospectus for details. Investment results assume all distributions are reinvested and reflect applicable fees and expenses. When applicable, investment results reflect expense reimbursements, without which results would have been lower. For more information on American Funds fee waivers and expense reimbursements, visit capitalgroup.com.
Page 14 Target Date ProView - Appendix
Returns: Average Annual Returns, Monthly at Maximum Offering Price (%) 1, 2 Figures shown are past results and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely. For current information and month-end results, visit americanfundsretirement.com.
Accumulation Phase Transition Phase Distribution Phase 2065 2060 2055 2050 2045 2040 2035 2030 2025 2020 2015 2010 2005 Ret. Inc. --
10-Year American Funds Target Date Retirement R6 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Fidelity Freedom K6 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A T. Rowe Price Retirement I N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Vanguard Target Retirement Inv N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Mutual Fund Category Average -- -- 9.43 9.35 9.26 9.04 8.63 7.99 7.35 6.95 6.54 5.78 5.78 4.77 --
Lifetime Inception Date American Funds Target Date Retirement R6 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Fidelity Freedom K6 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A T. Rowe Price Retirement I N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Vanguard Target Retirement Inv N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Mutual Fund Category Average ------
Source: Morningstar. Average annual returns as of 03/31/21 (updated monthly). Non-American Funds may include waivers and/or reimbursements, without which results would have been lower. Please refer to each fund's prospectus for details. Investment results assume all distributions are reinvested and reflect applicable fees and expenses. When applicable, investment results reflect expense reimbursements, without which results would have been lower. For more information on American Funds fee waivers and expense reimbursements, visit capitalgroup.com. The inception dates displayed pertain either to each target date vintage or to the selected share class, whichever is later.
Page 15 Target Date ProView - Appendix
Returns: Average Annual Returns, Quarterly at Maximum Offering Price (%) 1, 2 Figures shown are past results and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely. For current information and month-end results, visit americanfundsretirement.com.
Accumulation Phase Transition Phase Distribution Phase 2065 2060 2055 2050 2045 2040 2035 2030 2025 2020 2015 2010 2005 Ret. Inc. --
1-Year American Funds Target Date Retirement R6 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Fidelity Freedom K6 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A T. Rowe Price Retirement I N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Vanguard Target Retirement Inv N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Mutual Fund Category Average 52.99 52.99 52.21 51.36 50.00 46.47 41.55 35.33 29.65 25.99 23.90 20.83 20.83 16.94 --
3-Year American Funds Target Date Retirement R6 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Fidelity Freedom K6 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A T. Rowe Price Retirement I N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Vanguard Target Retirement Inv N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Mutual Fund Category Average 11.76 11.76 11.65 11.56 11.43 11.00 10.43 9.58 8.68 8.09 7.84 7.34 7.34 6.38 --
5-Year American Funds Target Date Retirement R6 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Fidelity Freedom K6 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A T. Rowe Price Retirement I N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Vanguard Target Retirement Inv N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Mutual Fund Category Average 12.69 12.69 12.58 12.44 12.32 11.83 11.20 10.19 9.08 8.27 7.80 7.08 7.08 5.99 --
Source: Morningstar. Average annual returns as of 03/31/21 (updated quarterly). Non-American Funds may include waivers and/or reimbursements, without which results would have been lower. Please refer to each fund's prospectus for details. Investment results assume all distributions are reinvested and reflect applicable fees and expenses. When applicable, investment results reflect expense reimbursements, without which results would have been lower. For more information on American Funds fee waivers and expense reimbursements, visit capitalgroup.com.
Page 16 Target Date ProView - Appendix
Returns: Average Annual Returns, Quarterly at Maximum Offering Price (%) 1, 2 Figures shown are past results and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely. For current information and month-end results, visit americanfundsretirement.com.
Accumulation Phase Transition Phase Distribution Phase 2065 2060 2055 2050 2045 2040 2035 2030 2025 2020 2015 2010 2005 Ret. Inc. --
10-Year American Funds Target Date Retirement R6 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Fidelity Freedom K6 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A T. Rowe Price Retirement I N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Vanguard Target Retirement Inv N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Mutual Fund Category Average -- -- 9.43 9.35 9.26 9.04 8.63 7.99 7.35 6.95 6.54 5.78 5.78 4.77 --
Lifetime Inception Date American Funds Target Date Retirement R6 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Fidelity Freedom K6 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A T. Rowe Price Retirement I N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Vanguard Target Retirement Inv N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Mutual Fund Category Average ------
Source: Morningstar. Average annual returns as of 03/31/21 (updated quarterly). Non-American Funds may include waivers and/or reimbursements, without which results would have been lower. Please refer to each fund's prospectus for details. Investment results assume all distributions are reinvested and reflect applicable fees and expenses. When applicable, investment results reflect expense reimbursements, without which results would have been lower. For more information on American Funds fee waivers and expense reimbursements, visit capitalgroup.com. The inception dates displayed pertain either to each target date vintage or to the selected share class, whichever is later.
Page 17 Target Date ProView - Appendix
Returns: Total Return Percentile Rank The Morningstar comparison universe consists of mutual funds within the respective Morningstar target date categories. In this setting, only mutual funds are shown in the charts. The categories include both active and passive target date series, as well as those that are managed both "to" and "through" retirement. Approximately one-third of the series within the 2000-2010 category have a target date of 2005. Rankings are based on the funds' average annual total returns within the applicable Morningstar categories. The Morningstar rankings do not reflect the effects of sales charges, account fees or taxes. Past results are not predictive of results in future periods. When applicable, investment results reflect fee waivers and/or expense reimbursements, without which results would have been lower. Please see capitalgroup.com for more information.
Accumulation Phase Transition Phase Distribution Phase 2065 2060 2055 2050 2045 2040 2035 2030 2025 2020 2015 2010 2005 Ret. Inc. --
1-Year American Funds Target Date Retirement R6 77 79 72 70 65 39 36 58 64 60 59 46 N/A N/A N/A Fidelity Freedom K6 9 6 3 3 3 1 1 7 7 8 14 38 78 75 N/A T. Rowe Price Retirement I -- 8 5 7 5 11 5 1 1 3 1 4 13 N/A N/A Vanguard Target Retirement Inv 75 73 67 60 49 60 60 47 39 50 91 N/A N/A 57 N/A
Funds Ranked 271 271 204 206 204 206 204 212 211 166 115 118 118 156 --
3-Year American Funds Target Date Retirement R6 -- 1 1 1 1 1 1 14 17 35 29 31 N/A N/A N/A Fidelity Freedom K6 -- 16 19 13 7 2 9 13 12 12 21 46 85 80 N/A T. Rowe Price Retirement I -- 3 3 5 1 6 5 1 1 3 4 1 10 N/A N/A Vanguard Target Retirement Inv 55 52 44 42 35 44 46 40 29 38 79 N/A N/A 32 N/A
Funds Ranked 185 185 188 192 188 192 188 192 191 152 101 95 95 139 --
5-Year American Funds Target Date Retirement R6 -- 1 1 1 1 1 1 12 24 55 41 37 N/A N/A N/A Fidelity Freedom K6 -- 7 4 4 1 1 1 2 3 5 6 10 72 69 N/A T. Rowe Price Retirement I -- 4 4 3 1 5 4 1 1 1 1 1 10 N/A N/A Vanguard Target Retirement Inv -- 57 42 40 31 38 41 35 27 34 75 N/A N/A 46 N/A
Funds Ranked 109 109 145 149 148 149 148 149 151 109 74 76 76 116 --
10-Year American Funds Target Date Retirement R6 -- -- 1 1 1 1 1 1 1 3 1 1 N/A N/A N/A Fidelity Freedom K6 ------31 26 25 14 25 23 34 32 42 80 72 N/A T. Rowe Price Retirement I ------N/A N/A Vanguard Target Retirement Inv -- -- 25 23 21 25 27 22 16 18 52 N/A N/A 16 N/A
Funds Ranked -- -- 48 73 82 82 83 82 86 65 43 51 51 75 -- Source: Morningstar. Average annual total returns as of 03/31/21 (updated monthly). The Morningstar rankings do not reflect the effects of sales charges, account fees or taxes. When applicable, investment results reflect fee waivers and/or expense reimbursements, without which results would have been lower. Non-American Funds may include waivers and/or expense reimbursements, without which results would have been lower. Please refer to each fund's prospectus for details. Investment results assume all distributions are reinvested and reflect applicable fees and expenses. When applicable, investment results reflect expense reimbursements, without which results would have been lower. For more information on American Funds fee waivers and expense reimbursements, visit capitalgroup.com.
Page 18 Target Date ProView - Appendix
Expenses : Net Expense Ratios (%) 3
Accumulation Phase Transition Phase Distribution Phase 2065 2060 2055 2050 2045 2040 2035 2030 2025 2020 2015 2010 2005 Ret. Inc. --
American Funds Target Date Retirement R6 0.40 0.40 0.39 0.39 0.39 0.38 0.37 0.35 0.33 0.31 0.30 0.30 N/A N/A N/A Fidelity Freedom K6 0.50 0.50 0.50 0.50 0.50 0.50 0.49 0.47 0.45 0.43 0.41 0.39 0.37 N/A 0.37 T. Rowe Price Retirement I 0.52 0.52 0.52 0.52 0.51 0.51 0.50 0.49 0.46 0.42 0.40 0.37 0.37 N/A N/A Vanguard Target Retirement Inv 0.15 0.15 0.15 0.15 0.15 0.14 0.14 0.14 0.13 0.13 0.12 N/A N/A N/A 0.12 Mutual Fund Category Average 0.73 0.73 0.73 0.74 0.73 0.73 0.72 0.71 0.70 0.65 0.61 0.57 0.57 0.00 0.71
Expenses : Gross Expense Ratios (%) 3
Accumulation Phase Transition Phase Distribution Phase 2065 2060 2055 2050 2045 2040 2035 2030 2025 2020 2015 2010 2005 Ret. Inc. --
American Funds Target Date Retirement R6 0.45 0.40 0.39 0.39 0.39 0.38 0.37 0.35 0.33 0.31 0.30 0.30 N/A N/A N/A Fidelity Freedom K6 0.50 0.50 0.50 0.50 0.50 0.50 0.49 0.47 0.45 0.43 0.41 0.39 0.37 0.37 N/A T. Rowe Price Retirement I 0.52 0.52 0.52 0.52 0.51 0.51 0.50 0.49 0.46 0.42 0.40 0.37 0.37 N/A N/A Vanguard Target Retirement Inv 0.15 0.15 0.15 0.15 0.15 0.14 0.14 0.14 0.13 0.13 0.12 N/A N/A 0.12 N/A Mutual Fund Category Average 13.51 13.51 3.60 2.43 2.38 2.38 2.27 2.04 1.91 2.64 5.18 0.67 0.67 3.59 --
Source: Morningstar as of each fund's most recent prospectus. Non-American Funds may include waivers and/or expense reimbursements, without which expenses would have been higher. The expense ratios are as of each fund's prospectus available at the time of publication and include the weighted average expenses of the underlying funds. The expense ratio for the American Funds 2065 Target Date Retirement Fund is estimated. The investment adviser is currently reimbursing a portion of the other expenses for the American Funds 2065 Target Date Retirement Fund. This reimbursement will be in effect through at least January 31, 2021. The adviser may elect at its discretion to extend, modify or terminate the reimbursement at that time. For more information on American Funds fee waivers and expense reimbursements, visit capitalgroup.com.
Page 19 Target Date ProView - Appendix
Definitions
Accumulation phase: The initial investment period for retirement that emphasizes capital appreciation to address longevity risk and ends approximately 15 years before retirement.
Avg series manager tenure: The average number of years that the current portfolio managers have managed the series. For the purposes of calculation, this metric excludes vintages added after the inception of the series.
Distribution phase: The final investment period beginning at retirement that supports income generation and asset preservation.
Morningstar rankings: Morningstar Retirement, Medium peer averages are composed of target date funds classified by Morningstar as Retirement share class type with a 12b-1 fee greater than 0% and less than or equal to 0.50%.
Number of Ranked Funds: The Morningstar comparison universe consists of mutual funds within the respective Morningstar target date categories. In this setting, only mutual funds are shown in the charts.
Rankings are based on the funds' average annual total returns within the applicable Morningstar categories. The Morningstar rankings do not reflect the effects of sales charges, account fees or taxes. Past results are not predictive of results in future periods. When applicable, investment results reflect fee waivers and/or expense reimbursements, without which results would have been lower. Please see capitalgroup.com for more information.
RI (retirement income): This column displays data for vintages invested primarily for income during retirement.
Retirement Phases: For most series, the accumulation phase emphasizes capital appreciation to address longevity risk and ends 15 years before retirement. The transition phase balances growth with capital preservation to mitigate market risk during the 15 years prior to retirement. The distribution phase supports income and asset preservation and begins at retirement.
S&P 500: S&P 500 Index is a market capitalization-weighted index based on the results of approximately 500 widely held common stocks. This index is unmanaged, and its results include reinvested dividends and/or distributions but do not reflect the effect of sales charges, commissions, account fees, expenses or U.S. federal income taxes.
Sharpe Ratio: Uses standard deviation and excess return to determine reward per unit of risk. The higher the number, the better a portfolio’s historical risk-adjusted performance.
Standard deviation: A common measure of absolute volatility that tells how returns over time have varied from the mean. Annualized and based on monthly returns, a lower number signifies lower volatility.
Total return percentile rank: A standardized way of ranking funds within a peer group. The fund with the largest return is ranked one, the smallest is ranked 100; and the remaining funds are placed equal distance from one another on the rating scale. Percentile ranks are most useful in categories that have a large number of funds. For small universes, funds will be ranked at the highest percentage possible. For instance, if there are only two funds in a category, Morningstar will assign a percentile rank of 1 to the top-performing fund while the second fund will earn a percentile rank of 51 (indicating the fund underperformed 50% of the sample).
"To" vs. "through": Indicates how a target date fund’s glide path is managed with respect to its target date. In general, a “to” strategy glide path reaches its final, most conservative asset allocation at the stated target date, while a “through” strategy glide path continues to change past the target date, reaching its final asset allocation at a future time. Some "to" strategies may have missing data in the distribution phase because their vintages are no longer offered past the retirement goal.
Transition phase: The intermediate investment period for retirement that balances growth with capital preservation to mitigate market risk during the approximately 15 years prior to retirement.
Unnamed Class: The series’ prospectus does not indicate a share class name. This may be because it is the sole share class in the series.
Page 20 Target Date ProView - Appendix
Important American Funds Disclosures
Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing. Each target date portfolio is composed of a mix of underlying funds and is subject to the risks and returns of those funds. Underlying funds may be added or removed during the year. Although the target date portfolios are managed for investors on a projected retirement date time frame, the allocation strategy does not guarantee that investors' retirement goals will be met. The target date is the year that corresponds roughly to the year in which an investor is assumed to retire and begin taking withdrawals. Investment professionals manage the portfolio, moving it from a more growth-oriented strategy to a more income-oriented focus as the target date gets closer. Investment professionals continue to manage each portfolio for approximately 30 years after it reaches its target date. Allocations may not achieve investment objectives. The portfolios' risks are directly related to the risks of the underlying funds. Capital Group offers a range of share classes designed to meet the needs of retirement plan sponsors and participants. The different share classes incorporate varying levels of advisor compensation and service provider payments. Because Class R-6 shares do not include any recordkeeping payments, expenses are lower and results are higher. Other share classes that include recordkeeping costs have higher expenses and lower results than Class R-6. There may have been periods when the results lagged the index(es). Certain market indexes are unmanaged and, therefore, have no expenses. Investors cannot invest directly in an index. All Capital Group trademarks mentioned are owned by The Capital Group Companies, Inc., an affiliated company or fund. All other company and product names mentioned are the property of their respective companies. Investment results assume all distributions are reinvested and reflect applicable fees and expenses. Results for non-American Funds are based on the specified share class. Results are calculated by Morningstar. Due to differing calculation methods, the results shown here may differ from those calculated by individual fund companies. Non-American Funds may include waivers and/or reimbursements, without which results would be lower and net expense ratios higher. Please see each fund's most recent prospectus for details. When applicable, investment results reflect fee waivers and/or expense reimbursements, without which results would have been lower and net expenses higher. This information is provided in detail in the shareholder reports. For more information on fee waivers and expense reimbursements, visit americanfundsretirement.com. 1 Non-American Funds results for periods before a share class was sold are hypothetical and may be based, in part, on returns for periods prior to the class's actual inception. Generally, these hypothetical returns reflect the performance of an older share class of the fund, which may be adjusted to reflect the fees and expense of the newer share class. Please refer to each fund's prospectus for dates of first sale and specific expense adjustment information. 2 Certain share classes were offered after the inception dates of some funds. Results for these shares prior to the dates of first sale are hypothetical based on the original share class results without a sales charge, adjusted for typical estimated expenses.
- Class R6 shares were first offered on 5/1/2009. Results for certain funds with an inception date after the share class inception also include hypothetical returns because those funds' shares sold after the funds' date of first offering.View dates of first sale and specific expense adjustment information at capitalgroup.com. 3 The expense ratios are as of each fund's prospectus available at the time of publication and include the weighted average expenses of the underlying funds. The expense ratio for the American Funds 2065 Target Date Retirement Fund is estimated. The investment adviser is currently reimbursing a portion of the other expenses for the American Funds 2065 Target Date Retirement Fund. This reimbursement will be in effect through at least January 31, 2021. The adviser may elect at its discretion to extend, modify or terminate the reimbursement at that time. American Funds Distributors, Inc., member FINRA. This content, developed by Capital Group, home of American Funds, should not be used as a primary basis for investment decisions and is not intended to serve as impartial investment or fiduciary advice. ©2021 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar, its content providers nor Capital Group are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. Information is calculated by Morningstar.
Page 21 Target Date ProView - Appendix
Principal Risks and Other Important Information American Funds Target Date Fidelity Freedom K6 T. Rowe Price Retirement I Vanguard Target Retirement Inv Retirement R6 8, 9, 12, 14, 15, 18, 19, 22, 23, 24, 25, 5, 6, 7, 9, 11, 12, 14, 15, 17, 24, 25, 4, 5, 9, 10, 14, 15, 16, 21, 24, 25, 27, 8, 12, 13, 14, 15, 20, 23, 24, 25, 27, 26, 27, 29, 33, 36, 38, 40, 41, 42 27, 31, 32, 33, 37, 40, 42 33, 37, 40, 42 28, 30, 32, 33, 34, 35, 37, 39, 40
4 Hedging Strategies: The advisor’s use of hedging strategies to reduce risk may limit the opportunity for gains compared with unhedged investments, and there is no guarantee that hedges will actually reduce risk.
5 Credit and Counterparty: The issuer or guarantor of a fixed-income security, counterparty to an OTC derivatives contract, or other borrower may not be able to make timely principal, interest, or settlement payments on an obligation. In this event, the issuer of a fixed-income security may have its credit rating downgraded or defaulted, which may reduce the potential for income and value of the portfolio.
6 Extension: The issuer of a security may repay principal more slowly than expected because of rising interest rates. In this event, short- and medium-duration securities are effectively converted into longer-duration securities, increasing their sensitivity to interest-rate changes and causing their prices to decline.
7 Inflation/Deflation: A change of asset value may occur because of inflation or deflation, causing the portfolio to underperform. Inflation may cause the present value of future payments to decrease, causing a decline in the future value of assets or income. Deflation causes prices to decline throughout the economy over time, impacting issuers’ creditworthiness and increasing their risk for default, which may reduce the value of the portfolio.
8 Inflation-Protected Securities: Unlike other fixed-income securities, the values of inflation-protected securities are not significantly impacted by inflation expectations because their interest rates are adjusted for inflation. Generally, the value of inflation-protected securities will fall when real interest rates rise and rise when real interest rates fall.
9 Prepayment (Call): The issuer of a debt security may be able to repay principal prior to the security’s maturity because of an improvement in its credit quality or falling interest rates. In this event, this principal may have to be reinvested in securities with lower interest rates than the original securities, reducing the potential for income.
10 Currency: Investments in securities traded in foreign currencies or more directly in foreign currencies are subject to the risk that the foreign currency will decline in value relative to the U.S. dollar, which may reduce the value of the portfolio. Investments in currency hedging positions are subject to the risk that the value of the U.S. dollar will decline relative to the currency being hedged, which may result in a loss of money on the investment as well as the position designed to act as a hedge. Cross-currency hedging strategies and active currency positions may increase currency risk because actual currency exposure may be substantially different from that suggested by the portfolio’s holdings.
11 Emerging Markets: Investments in emerging- and frontier-markets securities may be subject to greater market, credit, currency, liquidity, legal, political, and other risks compared with assets invested in developed foreign countries.
12 Foreign Securities: Investments in foreign securities may be subject to increased volatility as the value of these securities can change more rapidly and extremely than can the value of U.S. securities. Foreign securities are subject to increased issuer risk because foreign issuers may not experience the same degree of regulation as U.S. issuers do and are held to different reporting, accounting, and auditing standards. In addition, foreign securities are subject to increased costs because there are generally higher commission rates on transactions, transfer taxes, higher custodial costs, and the potential for foreign tax charges on dividend and interest payments. Many foreign markets are relatively small, and securities issued in less-developed countries face the risks of nationalization, expropriation or confiscatory taxation, and adverse changes in investment or exchange control regulations, including suspension of the ability to transfer currency from a country. Economic, political, social, or diplomatic developments can also negatively impact performance.
13 Long-Term Outlook and Projections: The investment is intended to be held for a substantial period of time, and investors should tolerate fluctuations in their investment’s value.
14 Loss of Money: Because the investment’s market value may fluctuate up and down, an investor may lose money, including part of the principal, when he or she buys or sells the investment.
15 Not FDIC Insured: The investment is not a deposit or obligation of, or guaranteed or endorsed by, any bank and is not insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other U.S. governmental agency.
16 Country or Region: Investments in securities from a particular country or region may be subject to the risk of adverse social, political, regulatory, or economic events occurring in that country or region. Country- or region-specific risks also include the risk that adverse securities markets or exchange rates may impact the value of securities from those areas.
17 Capitalization: Concentrating assets in stocks of one or more capitalizations (small, mid, or large) may be subject to both the specific risks of those capitalizations as well as increased volatility because stocks of specific capitalizations tend to go through cycles of beating or lagging the market as a whole.
18 Growth Investing: Growth securities may be subject to increased volatility as the value of these securities is highly sensitive to market fluctuations and future earnings expectations. These securities typically trade at higher multiples of current earnings than do other securities and may lose value if it appears their earnings expectations may not be met.
Page 22 Target Date ProView - Appendix
Principal Risks and Other Important Information American Funds Target Date Fidelity Freedom K6 T. Rowe Price Retirement I Vanguard Target Retirement Inv Retirement R6 8, 9, 12, 14, 15, 18, 19, 22, 23, 24, 25, 5, 6, 7, 9, 11, 12, 14, 15, 17, 24, 25, 4, 5, 9, 10, 14, 15, 16, 21, 24, 25, 27, 8, 12, 13, 14, 15, 20, 23, 24, 25, 27, 26, 27, 29, 33, 36, 38, 40, 41, 42 27, 31, 32, 33, 37, 40, 42 33, 37, 40, 42 28, 30, 32, 33, 34, 35, 37, 39, 40
19 Value Investing: Value securities may be subject to the risk that these securities cannot overcome the adverse factors the advisor believes are responsible for their low price or that the market may not recognize their fundamental value as the advisor predicted. Value securities are not expected to experience significant earnings growth and may underperform growth stocks in certain markets.
20 Active Management: The investment is actively managed and subject to the risk that the advisor’s usage of investment techniques and risk analyses to make investment decisions fails to perform as expected, which may cause the portfolio to lose value or underperform investments with similar objectives and strategies or the market in general.
21 Income: The investment's income payments may decline depending on fluctuations in interest rates and the dividend payments of its underlying securities. In this event, some investments may attempt to pay the same dividend amount by returning capital.
22 Index Correlation/Tracking Error: A portfolio that tracks an index is subject to the risk that certain factors may cause the portfolio to track its target index less closely, including if the advisor selects securities that are not fully representative of the index. The portfolio will generally reflect the performance of its target index even if the index does not perform well, and it may underperform the index after factoring in fees, expenses, transaction costs, and the size and timing of shareholder purchases and redemptions.
23 Issuer: A stake in any individual security is subject to the risk that the issuer of that security performs poorly, resulting in a decline in the security’s value. Issuer-related declines may be caused by poor management decisions, competitive pressures, technological breakthroughs, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, or other factors. Additionally, certain issuers may be more sensitive to adverse issuer, political, regulatory, market, or economic developments.
24 Interest Rate: Most securities are subject to the risk that changes in interest rates will reduce their market value.
25 Market/Market Volatility: The market value of the portfolio’s securities may fall rapidly or unpredictably because of changing economic, political, or market conditions, which may reduce the value of the portfolio.
26 Commodity: Investments in commodity-related instruments are subject to the risk that the performance of the overall commodities market declines and that weather, disease, political, tax, and other regulatory developments adversely impact the value of commodities, which may result in a loss of principal and interest. Commodity-linked investments face increased price volatility and liquidity, credit, and issuer risks compared with their underlying measures.
27 Equity Securities: The value of equity securities, which include common, preferred, and convertible preferred stocks, will fluctuate based on changes in their issuers’ financial conditions, as well as overall market and economic conditions, and can decline in the event of deteriorating issuer, market, or economic conditions.
28 High-Yield Securities: Investments in below-investment-grade debt securities and unrated securities of similar credit quality, commonly known as "junk bonds" or "high-yield securities," may be subject to increased interest, credit, and liquidity risks.
29 Industry and Sector Investing: Concentrating assets in a particular industry, sector of the economy, or markets may increase volatility because the investment will be more susceptible to the impact of market, economic, regulatory, and other factors affecting that industry or sector compared with a more broadly diversified asset allocation.
30 Mortgage-Backed and Asset-Backed Securities: Investments in mortgage-backed and asset-backed securities may be subject to increased price volatility because of changes in interest rates, issuer information availability, credit quality of the underlying assets, market perception of the issuer, availability of credit enhancement, and prepayment of principal. The value of ABS and MBS may be adversely affected if the underlying borrower fails to pay the loan included in the security.
31 Other: The investment’s performance may be impacted by its concentration in a certain type of security, adherence to a particular investing strategy, or a unique aspect of its structure and costs.
32 Restricted/Illiquid Securities: Restricted and illiquid securities may fall in price because of an inability to sell the securities when desired. Investing in restricted securities may subject the portfolio to higher costs and liquidity risk.
33 Underlying Fund/Fund of Funds: A portfolio’s risks are closely associated with the risks of the securities and other investments held by the underlying or subsidiary funds, and the ability of the portfolio to meet its investment objective likewise depends on the ability of the underlying funds to meet their objectives. Investment in other funds may subject the portfolio to higher costs than owning the underlying securities directly because of their management fees.
34 U.S. Government Obligations: Investments in U.S. government obligations are subject to varying levels of government support. In the event of default, some U.S. government securities, including U.S. Treasury obligations and Ginnie Mae securities, are issued and guaranteed as to principal and interest by the full faith and credit of the U.S. government. Other securities are obligations of U.S. government-sponsored entities but are neither issued nor guaranteed by the U.S. government.
Page 23 Target Date ProView - Appendix
Principal Risks and Other Important Information American Funds Target Date Fidelity Freedom K6 T. Rowe Price Retirement I Vanguard Target Retirement Inv Retirement R6 8, 9, 12, 14, 15, 18, 19, 22, 23, 24, 25, 5, 6, 7, 9, 11, 12, 14, 15, 17, 24, 25, 4, 5, 9, 10, 14, 15, 16, 21, 24, 25, 27, 8, 12, 13, 14, 15, 20, 23, 24, 25, 27, 26, 27, 29, 33, 36, 38, 40, 41, 42 27, 31, 32, 33, 37, 40, 42 33, 37, 40, 42 28, 30, 32, 33, 34, 35, 37, 39, 40
35 Derivatives: Investments in derivatives may be subject to the risk that the advisor does not correctly predict the movement of the underlying security, interest rate, market index, or other financial asset, or that the value of the derivative does not correlate perfectly with either the overall market or the underlying asset from which the derivative's value is derived. Because derivatives usually involve a small investment relative to the magnitude of liquidity and other risks assumed, the resulting gain or loss from the transaction will be disproportionately magnified. These investments may result in a loss if the counterparty to the transaction does not perform as promised.
36 Leverage: Leverage transactions may increase volatility and result in a significant loss of value if a transaction fails. Because leverage usually involves investment exposure that exceeds the initial investment, the resulting gain or loss from a relatively small change in an underlying indicator will be disproportionately magnified.
37 Fixed-Income Securities: The value of fixed-income or debt securities may be susceptible to general movements in the bond market and are subject to interest-rate and credit risk.
38 China Region: Investing in the China region, including Hong Kong, the People’s Republic of China, and Taiwan, may be subject to greater volatility because of the social, regulatory, and political risks of that region, as well as the Chinese government’s significant level of control over China’s economy and currency. A disruption of relations between China and its neighbors or trading partners could severely impact China’s export- based economy.
39 Conflict of Interest: A conflict of interest may arise if the advisor makes an investment in certain underlying funds based on the fact that those funds are also managed by the advisor or an affiliate or because certain underlying funds may pay higher fees to the advisor do than others. In addition, an advisor’s participation in the primary or secondary market for loans may be deemed a conflict of interest and limit the ability of the investment to acquire those assets.
40 Management: Performance is subject to the risk that the advisor’s asset allocation and investment strategies do not perform as expected, which may cause the portfolio to underperform its benchmark, other investments with similar objectives, or the market in general. The investment is subject to the risk of loss of income and capital invested, and the advisor does not guarantee its value, performance, or any particular rate of return.
41 Passive Management: The investment is not actively managed, and the advisor does not attempt to manage volatility or take defensive positions in declining markets. This passive management strategy may subject the investment to greater losses during general market declines than actively managed investments.
42 Target Date: Target-date funds, also known as lifecycle funds, shift their asset allocation to become increasingly conservative as the target retirement year approaches. Still, investment in target-date funds may lose value near, at, or after the target retirement date, and there is no guarantee they will provide adequate income at retirement.
Page 24 The Capital Advantage® Equity investments | 2020 Edition: Class A
Think no one can beat the index? Think again.
A Seeking success in equity investing
The average manager can’t beat the index …
Investors seeking better outcomes face a well-documented challenge: The average investment manager can’t beat the index. This fact is supported both by hard data and, unfortunately, by many investors’ experiences.
This assumption has led many to believe that because the average Over the last 20 years, on average, manager can’t beat the index, no manager can beat the index. And that’s simply not true. 46.7% The challenge faced by investors today is to find managers able to beat of U.S. equity funds led, while the index consistently, not those that are just a flash in the pan. 53.3% Strategies vary, but we believe there are three questions that can create a lagged the S&P 500.1 simple framework for selecting a manager. What are the investment manager’s historical results?
How did the manager achieve these results?
And is there reason to believe they can be repeated? American Funds’ multimanager approach“ has long served its equity investors well — and should continue to do so, thanks to parent Capital Group’s strong, “ results-oriented investing culture. ALEC LUCAS, PH.D., MORNINGSTAR, September 5, 20192
Unless otherwise noted, figures shown are past results for Class A shares at net asset value with all dividends reinvested and are not predictive of future periods. If the applicable sales charge had been applied, results would have been lower. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely. For current information and month-end results, visit capitalgroup.com. Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
2 The average manager can’t beat the index … … but not all managers are average.
In the following pages, we apply this evaluative framework to Capital Group’s equity-focused American Funds offerings.
What are the results? How were the results achieved; is the process repeatable?
Index-beating lifetime results A culture of stewardship All but one of these equity-focused funds have For nearly 90 years we’ve acted as stewards of our investors’ done what index proponents claim is nearly capital. This approach is the foundation of our culture. impossible: generated index-beating results over • We have lower expense ratios than peers. the long term. • We’re invested with you. • We’ve been employee-owned since 1931. The value of beating the index Investing in the American Funds when the first Our long-term focus, consistent approach … index fund was launched would have built more Achieving long-term investing objectives requires a long-term wealth. investment strategy and aligned managers. Generating wealth in accumulation and • Aligning manager compensation to long-term goals distribution • Decades of investment experience Since 2000, most of our funds have created • Investing for long-term value and preserved wealth in both accumulation … and proven system and distribution, even in the face of two major The Capital System,SM our proprietary investment process, and global market downturns. research network support our pursuit of superior long-term results. The benefits of a risk-sensitive approach • Conviction and collaboration in The Capital System Our approach helped preserve wealth when • Global research capabilities and long-standing company markets fell, something at which we’ve excelled. relationships
photo: A peek into the Capital Group investment process in action — an investment meeting in 1967. From left to right: Bob Egelston, Coleman Morton, Cecil Bessell, Inge Andonow, Howard Schow, Jon Lovelace, Bob Cody, Jonathan Bell Lovelace, Bill Newton and Marjorie Fisher. 1Capital Group calculations using data from Morningstar as of 12/31/19. Based on calendar-year returns of actively managed funds, excluding American Funds, in the Morningstar U.S. Fund Large Value, Blend and Growth categories. The groupings were filtered for oldest share class and excluded fund of funds, index funds, feeder funds, lifecycle funds, in-house funds of funds and enhanced index funds. 2“What Makes American Funds’ Equity Lineup Golden.” morningstar.com.
3 WHAT ARE THE RESULTS?
Equity-focused mutual funds with index-beating lifetime results
Index investing proponents claim it is nearly impossible to beat the index over the long term. Yet, all but one of these equity-focused American Funds have generated lifetime index-beating results, even though there have been times when the funds lagged their indexes.
EXHIBIT DETAILS • 1.36%: Average annual returns advantage over 708 3 • Lifetime annual returns of these equity-focused combined fund years, as of December 31, 2019. American Funds. • Shows all of our equity-focused funds as of December 31, • Class A shares at net asset value. If the maximum 2019, including our first fund that was launched in 1934. applicable 5.75% sales charge had been applied, results would have been lower.
American Funds return Index return 13.6%
12.5% 12.1% 11.6% 12.3% 11.9% 11.8% 11.4% 11.6% 11.4% 11.1% 11.2% 11.0% 10.9% 10.9% 10.6% 10.6% 10.5% 10.2% 10.2% 10.0% 9.8%
9.0% 8.7% 8.6% SM
8.2% 8.1% 7.2% 7.6% 7.2% 6.4% 5.7% American Funds Developing World rowth and Income Fun d
5.8% SM
und 5.7% F a ic a 5.2% 5.2% e Fund rica rica nd Inco m d f Amer any o f a nd d nvestors und Am e Am e F Fu und Fun stors d und Fun om p F uilder owth C 4.1% B
omy SM owth orld und o f und o f SM und F F F e co n ntal Inv e orld r E und stment spective n Balanc e ncome n Mutual F W AP F gton Mutual I orld cific G r owth ew ic a ic a al I W al nco m nv e shi n und ame The I The W New F Ame r N The Eu roPa Capit SMAL LC Capit AMCA P Per New The r The The I The International rowth and Income Fund Ame r Wa American Funds lobal Balanced Fun d
1/1/34 2/21/50 7/31/52 5/1/67 3/13/73 12/1/73 12/1/73 7/26/75 8/1/78 12/1/83 4/16/847/30/87 4/30/90 3/26/93 6/17/99 10/1/08 2/1/11 2/3/14 3Time-weighted average annual excess return across these 18 equity-focused American Funds. The equal-weighted average annual excess return is 1.34%. The time-weighted average gives greater emphasis to those funds that have been in existence longer. For example, this means that the 1.1% annualized difference between The Investment Company of America and its benchmark is given proportionally greater weighting in alignment with its more than 85 years in existence when calculating the average across all 18 funds. Returns are average annual total returns for benchmark indexes and average annual returns for funds at net asset value from fund inception through 12/31/19. The funds’ indexes are as of 12/31/19. See individual fund detail pages at capitalgroup.com for current information and any applicable benchmark index changes. Please see the Appendix and methodology section for a list of the indexes used for comparison with each American Fund.
4 These U.S. equity-focused mutual funds have delivered better results than the S&P 500 since 1976.
The first S&P 500 index-tracking fund was founded in 1976. Between then and now, investors could have done well for themselves by keeping their money invested in an index-tracking fund. But, if they had invested in any of the five U.S. equity-focused American Funds available for investment at the same time, the value of their investment would have increased significantly.
EXHIBIT DETAILS • Includes all five of the U.S. equity-focused American Funds • $10,000 hypothetical investment in five American Funds available for investment when the first S&P 500 index-tracking and the S&P 500, from August 31, 1976, through fund was launched on August 31, 1976. December 31, 2019. • $1,660,336: The value of a $10,000 investment equally • Class A shares at maximum offering price, with 5.75% weighted across these five American Funds over the period. sales charge deducted. The investment was rebalanced monthly.
$3,000,000