Your investment lineup
You have a variety of retirement plan investment options so you can create an investment mix that fits your needs. Your investment options are divided into two tiers—all-in-one investments and core investments, which are explained below.
Get detailed information about your investment options.
Tier 1: All-in-one investments
How to invest your money among stocks and bonds—now and as you grow older—is one of your most important financial decisions.
Each Vanguard Institutional Target Retirement Fund provides a professionally maintained, diversified mix of investments that shifts its emphasis to more conservative investments as the year of retirement nears. So, if you choose this tier, consider making a single Institutional Target Retirement Fund your only plan investment.
Even though Target Retirement Funds simplify the investment process, they still require some monitoring to ensure that the portfolio is in line with your current situation.
Consider choosing the fund with the date that’s closest to the year when you expect to retire. If you are already retired, consider choosing Vanguard Institutional Target Retirement Income Fund. This fund seeks to provide current income and some capital appreciation to retirees.
Tier 2: Core investments
Core investments can offer the basic ingredients for a diversified, well-balanced portfolio. You can combine several to create a portfolio that suits you. If you’d like to create your own diversified investment mix, you may want to start with the funds in this tier.
Some core investments are index funds, which can provide low-cost access to broad segments of the stock-and-bond markets. Also known as passively managed funds, index funds generally use a buy-and-hold strategy to try to track the performance of a given market.
Why would anyone invest in an index fund and earn just what the market earns? Because index funds generally cost less to run than actively managed funds, whose managers try to outperform the market.
Note that the “market” represents all investor dollars. When some investors’ dollars outperform the market, other investors’ dollars must underperform. After subtracting fund costs—including management fees, administrative expenses, and trading commissions—actively managed funds can face difficulties over time just to keep pace with the market.
This tier also includes a more conservative stable value fund.
A note about risk
All investing is subject to risk, including the possible loss of the money you invest. Investments in Institutional Target Retirement Funds are subject to the risks of their underlying funds. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative ones based on its target date. An investment in an Institutional Target Retirement Fund is not guaranteed at any time, including on or after the target date. Diversification does not ensure a profit or protect against a loss. Bond funds are subject to the risk that an issuer will fail to make payments on time, and that bond prices will decline because of rising interest rates or negative perceptions of an issuer’s ability to make payments. PIMCO Total Return Fund Institutional Class may invest in derivatives. Derivatives are subject to a number of risks, such as liquidity risk, interest rate risk, market risk, credit risk, and management risk. A fund investing in a derivative instrument could lose more than the principal amount invested. Prices of mid- and small-cap stocks often fluctuate more than those of large-company stocks. Investments in stocks or bonds issued by non-U.S. companies are subject to risks including country/regional risk and currency risk.
A stable value investment is neither insured nor guaranteed by the U.S. government. There is no assurance that the investment will be able to maintain a stable net asset value, and it is possible to lose money in such an investment.