23
Morningstar FundInvestor
October
2013
Morningstar Analyst Rating
08-27-13
„
Morningstar Pillars
Process
Performance
People
Parent
Price
¶
Positive
Neutral
Positive
Positive
Positive
Morningstar Analyst Rating
Morningstar evaluates mutual funds based on five key pillars, which
its analysts believe lead to funds that are more likely to outperform
over the long term on a risk-adjusted basis.
Analyst Rating Spectrum
Œ „ ´ˇ ¨
Pillar Spectrum
Positive
§
Negative
¶
Neutral
NAV
10.85
9.71
8.88
9.07
8.46
6.84
10.70
. . . . .
Total Return %
11.74
12.63
0.77
10.84
26.79
-32.46
. . . . . .
+/-M* MdTgRk
2.48
0.59
0.18
-1.49
5.02
-10.27
. . . . . .
+/-Mstr Lft Mod 2020
3.38
0.10
-0.98
-3.17
2.66
-6.19
. . . . . .
Income Return %
0.00
2.27
2.29
2.49
2.52
1.67
. . . . . .
Capital Return %
11.74
10.36
-1.52
8.35
24.27
-34.13
. . . . . .
Total Rtn % Rank Cat
1
32
30
80
38
54
. . . . . .
Income $
0.00
0.20
0.21
0.21
0.17
0.18
0.14
. . . . .
Capital Gains $
0.00
0.09
0.05
0.10
0.04
0.20
0.00
. . . . .
Expense Ratio %
0.74
. . . . . . . . . . .
Income Ratio %
.
1.96
2.24
2.33
2.79
2.33
1.47
. . . . .
Turnover Rate %
.
4
7
8
1
1
. . . . . .
Net Assets $mil
971
828
688
593
414
229
146
. . . . .
Performance
09-30-13
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Total
2009
2010
2011
2012
2013
-6.58 14.87 13.22 4.36 26.79
2.84 -6.90 10.00 5.24 10.84
3.53 1.17
-9.68 6.52
0.77
7.54 -1.47
4.57 1.64 12.63
5.56 0.88
4.93
. .
Trailing
Total
+/- M* +/- Mstr
%Rank Growth of
Return% MdTgRkLft Mod 2020
Cat
$10,000
3 Mo
6 Mo
1 Yr
3 Yr Avg
5 Yr Avg
10 Yr Avg
15 Yr Avg
4.93 0.44
0.62
15 10,493
5.85 1.92
2.66
2 10,585
13.57 2.86
4.10
4 11,357
10.10 0.76
0.24
7 13,346
8.06 -0.24
-0.51
23 14,734
. . . . .
. . . . .
Tax Analysis
Tax-Adj Rtn% %Rank Cat Tax-Cost Rat %Rank Cat
3 Yr (estimated)
5 Yr (estimated)
10 Yr (estimated)
6.95
51
0.92
57
5.76
64
0.97
65
. . . .
Potential Capital Gain Exposure: 15% of assets
Rating and Risk
Time Load-Adj
Morningstar
Morningstar
Morningstar
Period Return % Rtn vs Cat
Risk vs Cat
Risk-Adj Rating
1 Yr
7.04
3 Yr
7.95
Avg
Avg
5 Yr
6.79
-Avg
Avg
10 Yr
. . . .
Incept
3.16
Other Measures
Standard Index
Best Fit Index
M* MdTgRk
M* MdTgRk
Alpha
0.7
0.7
Beta
1.00
1.00
R-Squared
98
98
Standard Deviation
8.51
Mean
10.10
Sharpe Ratio
1.17
Morningstar’s Take
by Janet Yang, CFA 08-27-13
Although questions still remain about American Funds
Target Date Retirement 2020’s fixed-income side,
recent changes spur optimism.
This target-date series remains one of the stronger
mutual fund offerings available, and that’s reflected in
its across-the-board positive pillar scores. Still, years
of inconsistent performance prompted American to
rethink its approach to bonds, and the uncertainty
created by the firm’s now multiyear effort to evolve its
fixed-income investing process holds back the series’
overall rating. American’s insular qualities have caused
some of these issues; although the firm’s low
personnel turnover has benefited investors overall, it
has also appeared to shield the bond team from a
rapidly changing bond market.
To the firm’s credit, it has begun to address some of
the issues. For example, recognizing the importance of
a fund’s overall interest-rate and sector positioning,
the group has been trying new methods to bring tighter
coordination among the various fixed-income
managers. That’s in marked contrast to the
independence often touted by the firm’s multimanager
approach. Toward the beginning of this year, the firm
also took the uncharacteristic step of hiring outsiders
to senior level positions within the group. The high
quality of those hires brings the potential that,
although American’s fixed-income efforts appear to be
several years behind its competitors, it may not take
as long to catch up with them.
Meanwhile, the series enjoys some of the best
equity offerings around. All of those funds are highly
regarded by Morningstar analysts, and their strong
returns, along with a generally greater-than-average
allocation to equities, have played an important role in
the series’ impressive short- and long-term results.
Observing the firm’s fixed-income offerings through
a few more market environments should help shed
light on the outcome of their makeover. In the
meantime, American’s model corporate culture
combined with the series’ stellar equity lineup,
attractive fees, and experienced team continue to
bode well for investors.
Address:
American Funds Target Date Retiremt Ser
Los Angeles, CA 90071-1447
800-421-4225
Web Address:
Inception:
02-01-07
Advisor:
Capital Research and Management Company
Subadvisor:
None
NTF Plans:
Schwab Instl NTF
Minimum Purchase:
$250
Add: $50 IRA: $250
Min Auto Inv Plan:
$250
Add: $50
Sales Fees:
5.75%L,
Management Fee:
0.10%
Actual Fees:
Mgt:0.10% Dist:0.23%
Expense Projections:
3Yr:$818
5Yr:$1005 10Yr:$1544
Income Distribution:
Annually
Data through September 30, 2013
American Funds Trgt Date Ret 2020 A
Ticker
Status Yield Total Assets
Mstar Category
AACTX Open
1.9% $2,828 mil
Target Date 2016-2020
71% 72% 63% 64% 64% 61% 65%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 09-13
Historical Profile
Return
Risk
Rating
Below Avg
Average
Below Avg
Investment Style
Equity
Stock %
Manager Change
Partial Manager Change
Growth of $10,000
Investment Values of
Fund
Investment Values of
M* MdTgRk
Performance Quartile
(within Category)
History
10.0
6.0
12.0
14.0
Portfolio Analysis
06-30-13
Total Stocks:0
P/E
YTD % Net
Share change since 03-31-13
Sectors
Ratio Return % Assets
American Funds US Government Sec R6
.
-1.89 10.00
American Funds Washington Mutual R6
.
20.44 8.08
American Funds American Balanced R6
.
13.63 8.00
American Funds Invmt Co of Amer R6
.
20.22 6.96
American Funds Fundamental Invs R6
.
19.93 6.05
American Funds Capital Inc Bldr R6
.
9.57 6.00
American Funds Inc Fund of Amer R6
.
11.75 6.00
American Funds American Mutual R6
.
18.07 5.97
American Funds Interm Bd Fd of Amer R6
.
-0.72 5.00
Date of
Amount
Value % Net
Total Fixed-Income:0
Maturity
$000
$000 Assets
Equity Style
Fixed-Income Style
Style: Blend
Size: Large-Cap
Duration: Moderate
Quality:
Medium
Avg Eff Duration
4.1 Yrs
Avg Eff Maturity
.
Avg Credit Quality
A
Avg Wtd Coupon
3.82%
figure provided by fund as of 06-30-13
1
1
Value Measures
Rel Category
Price/Earnings
Price/Book
Price/Sales
Price/Cash Flow
Dividend Yield %
15.19
2.24
1.34
7.70
2.62
1.05
1.21
1.16
1.18
1.13
Growth Measures
% Rel Category
Long-Term Erngs
Book Value
Sales
Cash Flow
Historical Erngs
9.19
3.46
1.58
3.64
-2.33
0.84
0.33
0.22
0.47
NMF
Market Cap %
Giant 52.4
Large 33.6
Mid 12.0
Small
1.7
Micro
0.3
Avg $mil:
42,985
Composition - Net
(% of Stock)
Cash
9.2
Stocks 64.9
Bonds 23.7
Other
2.2
Foreign 31.5
Sector
Weightings
% of
Stocks
Rel M*
MdTgRk High
3 Year
Low
Cyclical 30.75 0.78
BasicMat 4.88 0.84 6 4
CnsmrCyc13.20 1.11 13 10
FinanSvs 11.43 0.65 12 10
Real Est 1.24 0.31 1 1
Sensitive 41.16 1.09
CommSrvs 6.67 1.70 9 7
Energy 9.44 1.04 12 9
Industrl 13.26 1.10 15 13
Technlgy 11.79 0.93 13 11
Defensive28.09 1.23
CnsmrDef 9.46 1.10 11 9
Hlthcare 14.47 1.43 14 10
Utilities 4.16 0.99 5 4
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2013Morningstar, Inc.All rights reserved. The information herein isnot represented orwarranted to be accurate, correct, complete or
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