Vanguard Launches 2055 Target-Date Offering

A Vanguard news release said the fund’s initial allocation is approximately 90% stocks and 10% bonds.

The new offering will invest in Vanguard index funds and provide exposure to U.S. stocks and bonds, as well as developed and emerging market international stocks. The fund’s underlying funds invest in about 6,000-plus U.S. stocks and bonds and 2,000-plus international stocks, according to the company.

The fund will gradually shift to bonds over time to an expected allocation of 50% stocks/50% bonds on reaching its target date and will reach an expected final allocation of 30% stocks/70% bonds seven years after the target date.

“Over the past few years, the stock market has dropped 57%, rallied 86%, and subsequently declined 8%, leading to the potential for an entire generation to become wary of investing,” said Vanguard Chairman and CEO Bill McNabb, in the news release.  “We must encourage younger investors to participate in the financial markets at an early age, save at aggressive levels, keep an eye on investment costs, and maintain a long-term focus.”

The expense ratio of the 2055 fund is expected to be 0.19%, Vanguard said. More information is at www.vanguard.com.