American Funds 2035 Target Date Retirement Fund (AAFTX)
I picked American Funds 2035 Target Date Retirement Fund (AAFTX) — a fund of funds — for two reasons:
First, AAFTX holds all four of the mutual funds recommended previously. Secondly, the year 2035 is approximately when I might begin to consider retirement. Although the fees on target-date funds can be more expensive than your average equity fund, AAFTX charges 0.76% annually, which is more than reasonable. (Though again, there’s also the 5.75% charge for A shares.)
About 80% of the fund’s $2 billion in assets is invested in either growth-related equity or fixed-income investments. Just 5% is dedicated to bond funds exclusively. It’s something to keep in mind if you’re particularly focused on a portfolio that’s heavily weighted in bonds.
However, if you’re interested in the four funds I’ve mentioned previously, which represent 23% of the portfolio, the 2035 target date fund offered by American Funds is definitely worth considering. In existence since 2008, its performance has been workmanlike, if not spectacular.
If you want an all-in-one solution for your investment portfolio, AAFTX is the way to go.
As of this writing, Will Ashworth did not hold a position in any of the aforementioned securities.