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The best- and worst-performing target date funds

Fund series promoted by J.P. Morgan Asset Management thrives while active managers struggle to perform

Feb 1, 2015 @ 12:01 am

By Trevor Hunnicutt and Mopedia Data

The target date fund series promoted by J.P. Morgan Asset Management is thriving.

The firm's SmartRetirement series was ranked No. 1 or No. 2 in the fourth quarter in six target date categories.

The firm's decisions panned out when other fund managers were flummoxed by an unexpected rally in U.S. government bonds, the sinking price of oil and the return of volatility to equity markets.

Morningstar Inc. this year gave its annual fund manager of the year award for asset-allocation strategies to Anne Lester and her team. Ms. Lester is portfolio manager and head of global retirement solutions at the New York-based money manager.

“We're a believer in this series over the long term,” said Leo Acheson, a Morningstar analyst who covers fund-of-fund strategies, which include retirement-oriented target date funds.

Mr. Acheson said the firm combines a strong strategic sensibility — they are well-diversified across a series of J.P. Morgan funds, he said — with the right tactical decisions. In 2014, those tactics included a strong position in real estate investment trusts, which performed well, as well as U.S. large-cap stocks, which also performed relatively well.

Active managers struggled in 2014 to outperform their benchmarks. Many forecasters entered the year expecting interest rates to rise in the U.S. (they did not), and the price of oil slid sharply.

“A lot of series were caught on the wrong side of that,” Mr. Acheson said. “Surprises make a market difficult to navigate.”

— By Trevor Hunnicutt

Target Date 2016-20

Top 10 3-month return1-year return3-year return5-year returnNet assets ($M)Expense ratio*
Madison Target Retirement 2020 R6 (MTWRX)2.83%7.09%9.3%7.78%$61.20.55%
JPMorgan SmartRetirement 2020 A (JTTAX)2.66%6.69%11.4%9.45%$4,962.70.86%
American Century One Choice 2020 R6 (ARBDX)2.64%7.10%N/AN/A$55.80.53%
Principal LifeTime Hybrid 2020 Instl (PHTTX)2.55%N/AN/AN/A$0.0100.46%
Schwab Target 2020 (SWCRX)2.54%5.77%11.5%9.50%$507.10.65%
American Century One Choice 2020 A (ARBMX)2.36%6.35%9.9%8.64%$1,478.51.04%
Great-West SecureFoundation LT 2020 G (MXSMX)2.35%5.75%10.4%N/A$27.30.65%
JPMorgan SmartRetirement Blend 2020 R5 (JBSRX)2.28%6.29%N/AN/A$126.90.50%
Voya Solution 2020 Port I (ISNBX)2.27%6.49%10.8%N/A$0.60.76%
Vanguard Target Retirement 2020 Inv (VTWNX)2.25%7.11%11.7%9.67%$28,524.60.16%
Bottom 5
AllianzGI Retirement 2020 A (AGLAX)-1.04%1.71%5.3%5.65%$63.80.99%
Manning & Napier Target 2020 I (MTNIX)0.04%4.25%10.5%8.56%$191.60.86%
AllianceBern 2020 Retirement Strat A (LTHAX)0.26%3.23%9.9%7.51%$180.91.02%
USAA Target Retirement 2020 (URTNX)0.51%3.45%7.9%7.43%$650.30.74%
Harbor Target Retirement 2020 Instl (HARJX)0.52%2.97%8.0%7.24%$30.30.68%

Target Date 2021-2025

Top 10 3-month return1-year return3-year return5-year returnNet assets ($M)Expense ratio*
JPMorgan SmartRetirement 2025 A (JNSAX)3.09%7.15%13.2%10.26%$4,082.40.89%
Great-West Lifetime 2025 III T (MXELX)2.94%6.82%13.4%10.22%$63.60.95%
Principal LifeTime Hybrid 2025 Instl (PHTQX)2.88%N/AN/AN/A$0.0100.47%
Schwab Target 2025 (SWHRX)2.82%6.16%12.9%10.39%$359.40.71%
American Century One Choice 2025 R6 (ARWDX)2.78%7.42%N/AN/A$57.00.56%
Putnam RetirementReady 2025 A (PRROX)2.58%7.04%11.1%8.38%$52.80.98%
American Century One Choice 2025 A (ARWAX)2.50%6.60%10.7%9.11%$2,326.61.07%
JPMorgan SmartRetirement Blend 2025 R5 (JBBSX)2.47%6.72%N/AN/A$100.20.50%
Great-West Lifetime 2025 II T (MXCLX)2.40%6.25%11.5%9.22%$1,616.40.92%
Great-West SecureFoundation LT 2025 G (MXSNX)2.40%5.70%11.3%8.52%$71.10.67%
Bottom 5
AllianzGI Retirement 2025 A (GVSAX)-1.10%1.68%5.7%N/A$65.91.01%
Manning & Napier Target 2025 I (MTOAX)0.18%5.16%N/AN/A$25.80.87%
AllianceBern 2025 Retirement Strat A (LTIAX)0.34%3.31%11.0%7.92%$187.91.04%
Harbor Target Retirement 2025 Instl (HARMX)0.40%2.71%8.8%7.58%$11.00.69%
PIMCO RealPath 2025 A (PENZX)0.45%4.10%5.8%N/A$95.11.15%

Target Date 2026-2030

Top 10 3-month return1-year return3-year return5-year returnNet assets ($M)Expense ratio*
Citi Market Pilot 2030 I (CFTYX)3.63%N/AN/AN/A$5.41.10%
JPMorgan SmartRetirement 2030 A (JSMAX)3.34%7.43%14.5%10.85%$4,816.40.91%
Madison Target Retirement 2030 R6 (MTIRX)3.28%8.03%11.8%9.16%$83.30.55%
Principal LifeTime Hybrid 2030 Instl (PHTNX)3.15%N/AN/AN/A$0.0100.48%
American Century One Choice 2030 R6 (ARCUX)3.10%7.74%N/AN/A$53.70.57%
Schwab Target 2030 (SWDRX)3.02%6.32%14.1%10.97%$736.40.74%
Putnam RetirementReady 2030 A (PRRQX)2.90%7.66%13.0%9.48%$60.41.02%
American Century One Choice 2030 A (ARCMX)2.83%6.96%11.6%9.66%$1,461.41.09%
Voya Solution 2030 Port I (ISNGX)2.76%7.16%13.4%N/A$0.20.83%
PNC Target 2030 I (PDTEX)2.70%6.74%N/AN/A$2.20.83%
Bottom 5
AllianzGI Retirement 2030 A (ABLAX)-1.28%1.38%6.8%6.29%$64.31.03%
Manning & Napier Target 2030 I (MTPIX)0.38%5.31%13.2%10.02%$212.50.86%
PIMCO RealPath 2030 A (PEHAX)0.39%3.91%6.5%5.74%$133.41.17%
Harbor Target Retirement 2030 Instl (HARPX)0.44%2.40%10.0%8.17%$25.00.72%
AllianceBern 2030 Retirement Strat A (LTJAX)0.65%3.57%12.2%8.31%$155.61.06%

Target Date 2031-2035

Top 10 3-month return1-year return3-year return5-year returnNet assets ($M)Expense ratio*
JPMorgan SmartRetirement 2035 A (SRJAX)3.57%7.57%15.6%11.34%$3,105.10.93%
Principal LifeTime Hybrid 2035 Instl (PHTJX)3.32%N/AN/AN/A$0.0100.49%
American Century One Choice 2035 R6 (ARLDX)3.27%7.99%N/AN/A$50.00.60%
Schwab Target 2035 (SWIRX)3.20%6.49%15.2%11.57%$291.60.78%
Great-West Lifetime 2035 III T (MXKLX)3.11%6.61%15.2%11.14%$50.70.99%
Putnam RetirementReady 2035 A (PRRWX)3.10%8.07%14.6%10.44%$42.31.06%
American Century One Choice 2035 A (ARYAX)3.10%7.36%12.7%10.31%$1,826.01.12%
Great-West Lifetime 2035 II T (MXILX)2.79%6.31%14.1%10.53%$1,291.60.97%
JPMorgan SmartRetirement Blend 2035 R5 (JPBRX)2.67%6.89%N/AN/A$72.60.50%
Vantagepoint Milestone 2035 Inv M (VPRLX)2.45%5.24%14.6%10.98%$371.60.88%
Bottom 5
AllianzGI Retirement 2035 A (GVRAX)-1.21%1.27%7.8%N/A$52.41.06%
GuideStone Funds MyDestination 2035 Inv (GMHZX)0.19%2.70%13.2%10.29%$358.71.34%
Manning & Napier Target 2035 I (MTQIX)0.53%5.56%N/AN/A$20.50.87%
Harbor Target Retirement 2035 Instl (HARUX)0.64%2.45%11.4%8.82%$7.90.74%
PIMCO RealPath 2035 A (PIVAX)0.67%4.23%7.7%N/A$92.81.18%

Target Date 2036-2040

Top 10 3-month return1-year return3-year return5-year returnNet assets ($M)Expense ratio*
Citi Market Pilot 2040 I (CFTWX)3.63%N/AN/AN/A$5.41.10%
JPMorgan SmartRetirement 2040 A (SMTAX)3.57%7.63%15.9%11.53%$3,400.50.94%
American Century One Choice 2040 R6 (ARDUX)3.50%8.50%N/AN/A$38.80.63%
Madison Target Retirement 2040 R6 (MFRRX)3.48%8.25%13.0%9.78%$58.70.55%
Principal LifeTime Hybrid 2040 Instl (PLTQX)3.41%N/AN/AN/A$0.0100.50%
Schwab Target 2040 (SWERX)3.33%6.58%16.0%11.99%$780.00.80%
American Century One Choice 2040 A (ARDMX)3.33%7.76%13.7%10.89%$1,090.91.15%
Putnam RetirementReady 2040 A (PRRZX)3.30%8.54%15.8%11.17%$39.41.13%
PNC Target 2040 I (PDTGX)3.28%7.58%N/AN/A$1.30.87%
JPMorgan SmartRetirement Blend 2040 R5 (JOBBX)2.77%6.95%N/AN/A$70.10.50%
Bottom 5
AllianzGI Retirement 2040 A (AVSAX)-1.17%1.22%8.5%7.06%$42.51.09%
Manning & Napier Target 2040 I (MTTIX)0.55%5.63%15.2%10.22%$135.60.87%
Presidential Managed Risk 2040 A (PZDAX)0.60%2.28%8.5%N/A$8.91.05%
PIMCO RealPath 2040 A (POFAX)0.77%3.96%8.0%6.88%$112.71.20%
Harbor Target Retirement 2040 Instl (HARYX)0.91%2.72%12.8%9.39%$18.90.76%

Target Date 2041-2045

Top 10 3-month return1-year return3-year return5-year returnNet assets ($M)Expense ratio*
American Century One Choice 2045 R6 (ARDOX)3.62%8.91%N/AN/A$32.40.66%
JPMorgan SmartRetirement 2045 A (JSAAX)3.56%7.55%16.0%11.48%$1,791.10.94%
Principal LifeTime Hybrid 2045 Instl (PHTYX)3.49%N/AN/AN/A$0.0100.50%
American Century One Choice 2045 A (AROAX)3.47%8.19%14.4%11.30%$1,307.01.19%
Putnam RetirementReady 2045 A (PRVLX)3.42%8.84%16.4%11.51%$23.31.19%
Schwab Target 2045 (SWMRX)3.34%6.53%N/AN/A$44.90.75%
JPMorgan SmartRetirement Blend 2045 R5 (JMBRX)2.68%6.92%N/AN/A$35.00.50%
Great-West Lifetime 2045 III T1 (MXRLX)2.65%5.76%15.1%10.84%$25.51.10%
Great-West Lifetime 2045 II T (MXOLX)2.65%5.90%14.7%10.75%$654.00.99%
Voya Solution 2045 Port I (ISRIX)2.58%6.34%15.1%10.83%$731.30.89%
Bottom 5
AllianzGI Retirement 2045 A (GBVAX)-1.09%1.27%9.1%N/A$26.31.10%
GuideStone Funds MyDestination 2045 Inv (GMFZX)0.11%2.23%13.7%10.62%$253.41.39%
PIMCO RealPath 2045 A (PFZAX)0.60%3.85%N/AN/A$61.71.20%
Manning & Napier Target 2045 I (MTUIX)0.85%6.04%N/AN/A$8.50.88%
Harbor Target Retirement 2045 Instl (HACCX)0.98%2.63%14.0%9.87%$4.40.78%

Target Date 2046-2050

Top 10 3-month return1-year return3-year return5-year returnNet assets ($M)Expense ratio*
American Century One Choice 2050 R6 (ARFEX)3.75%8.94%N/AN/A$22.50.68%
Madison Target Retirement 2050 R6 (MFTRX)3.60%8.47%14.3%N/A$22.30.55%
JPMorgan SmartRetirement 2050 A (JTSAX)3.59%7.55%15.9%11.55%$1,413.90.94%
Putnam RetirementReady 2050 A3.57%9.09%16.9%11.77%$16.91.24%
American Century One Choice 2050 A (ARFMX)3.54%8.24%14.7%11.49%$614.11.20%
Principal LifeTime Hybrid 2050 Instl (PHTUX)3.48%N/AN/AN/A$0.0100.51%
Schwab Target 2050 (SWNRX)3.41%6.66%N/AN/A$36.20.76%
PNC Target 2050 I (PDTIX)3.39%7.47%N/AN/A$1.40.87%
Invesco Balanced-Risk Retire 2050 A (TNEAX)2.91%8.30%7.0%8.83%$48.71.36%
MainStay Retirement 2050 A (MSRLX)2.83%5.81%15.5%11.08%$78.01.08%
Bottom 5
AllianzGI Retirement 2050 A (ASNAX)-1.25%1.09%9.3%7.61%$21.01.10%
Presidential Managed Risk 2050 A (PZEAX)0.06%1.46%8.9%N/A$5.11.04%
Manning & Napier Target 2050 I (MTYIX)0.80%5.94%15.8%10.57%$67.40.87%
PIMCO RealPath 2050 A (PFYAX)0.86%4.29%8.5%7.01%$92.01.20%
AllianceBern 2050 Retirement Strat A (LTQAX)1.18%3.93%14.1%8.91%$21.41.06%

As of Dec. 31. N/A = Not available (fund has been in operation for less than the year indicated). Rankings are based on unrounded numbers. *Net prospectus. Source: Morningstar, Inc.

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