Schwab Target Funds seek to provide capital appreciation and income consistent with their current asset allocation.
The Schwab Target Funds are designed for investors with a planned date of retirement. The target date is the date, or date range, when it’s expected that the investor will begin gradual withdrawals of fund assets, to begin covering expenses in retirement. Utilizing a fund-of-funds strategy, the Fund expects to gradually decrease its equity holdings and increase its fixed income holdings as the target date approaches and for approximately 20 years beyond the target date. The Portfolio Manager allocates across a broad range of asset classes by investing in a combination of active and passive proprietary and sub-advised/externally managed strategies. The principal value of the Fund is not guaranteed at anytime, including target date.
- Accumulating for retirement—A higher proportion is invested in equity to provide more growth potential, and the opportunity to build assets and keep up with inflation. The specific allocation will depend on how far away the investor is from the target date.
- Closer to retirement—A higher proportion is invested in fixed income and cash and cash equivalents (including money market funds) to provide the increased stability and income needed in preparation for retirement. At the target date, the Fund will be invested in approximately 40% equity, 54% fixed income and 6% cash and cash equivalents (including money market funds).
- Living in retirement—Once the target date is reached, the Fund continues to be invested more conservatively. The fixed income allocation increases and the equity exposure decreases to help protect the portfolio while still providing some opportunity for growth. Twenty years after the target date, the Fund will reach its most conservative allocation of 25% equity, 66% fixed income and 9% cash and cash equivalents (including money market funds).
|Fund Name||Ticker||Net OER1||Min. Investment|
|Target 2010 Fund||SWBRX||0.55%||$100|
|Target 2015 Fund||SWGRX||0.61%||$100|
|Target 2020 Fund||SWCRX||0.67%||$100|
|Target 2025 Fund||SWHRX||0.72%||$100|
|Target 2030 Fund||SWDRX||0.75%||$100|
|Target 2035 Fund||SWIRX||0.79%||$100|
|Target 2040 Fund||SWERX||0.81%||$100|
|Target 2045 Fund||SWMRX||0.82%||$100|
|Target 2050 Fund||SWNRX||0.83%||$100|
|Target 2055 Fund||SWORX||0.83%||$100|
Distinguishing Characteristics and Benefits
- Rebalancing. Your investment is reallocated based on your target date to help meet your retirement goals.
- Good Value. Your Fund is competitively priced so your investment goes further.
- Diversified solution. Your portfolio is a combination of active and passive proprietary and sub-advised/externally managed strategies*.
(Note that the retirement year included in a Target Fund's name does not necessarily represent the specific year an investor expects to retire; it is intended only as a general guide.)
Charles Schwab Investment Management actively manages the Schwab Asset Allocation Funds to provide diversification across key asset categories. Portfolio managers monitor the market and adjust investments as needed to keep all the Funds in line with their stated objectives.