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Vanguard to Launch New Target Date Funds for Younger Investors

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What You Need to Know

  • Vanguard is launching new TDFs geared to younger investors who have a long glide path.
  • The initial mix of investments will be 90% stocks and 10% fixed income.
  • The 2070 TDFs will be available by mid-2022.

Vanguard, the asset manager with $8.2 trillion, will launch two new target date funds for younger investors. The new products will be available by mid-2022, the company announced Monday.

The Vanguard Target Retirement 2070 Fund and Vanguard Target Retirement 2070 Trusts are designed for young investors who have long time horizons, Hence, the makeup is heavier in equity investments, starting with a glide path of 90% stocks and 10% bonds.

The initial mixture will be made up of 54% U.S. stocks, 36% foreign stocks, 7% U.S. fixed income securities and 3% foreign fixed income securities.

Like other TDFs, as the investor gets closer to retirement age, the exposure to stocks will be reduced while fixed income investments increase. The TDFs’ most conservative mix will be 30% stocks and 70% fixed income.