(PUB) Morningstar FundInvestor

October 2013

Morningstar FundInvestor

23

Data through September 30, 2013 American Funds Trgt Date Ret 2020 A

Ticker

Status Yield Total Assets

Mstar Category

AACTX Open

1.9% $2,828 mil

Target Date 2016-2020

Morningstar Analyst Rating 08-27-13

Investment Style Equity Stock %

Historical Profile Return Risk Rating Below Avg Average Below Avg

71% 72% 63% 64% 64% 61% 65%

„

Manager Change Partial Manager Change

12.0 14.0

Morningstar Pillars Process Performance

Growth of $10,000

Positive Neutral Positive Positive Positive

10.0

Investment Values of Fund Investment Values of M* MdTgRk

¶

People Parent Price

6.0

Performance Quartile (within Category) History

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 09-13

Morningstar Analyst Rating Morningstar evaluates mutual funds based on five key pillars, which its analysts believe lead to funds that are more likely to outperform over the long term on a risk-adjusted basis. Analyst Rating Spectrum Œ „ ´ˇ ¨

9.07 6.84 10.70 . . . . . 8.46

8.88 0.77 0.18 -0.98 2.29 -1.52

9.71

10.85 11.74

NAV

12.63 26.79 -32.46 . . . . . . 5.02 -10.27 . . . . . . 2.66 -6.19 . . . . . . 2.52 1.67 . . . . . . 24.27 -34.13 . . . . . . 38 54 . . . . . . 10.84 -1.49 -3.17 0.59 0.10 2.27 2.49 8.35 10.36 32 30 80

Total Return % +/-M* MdTgRk

2.48 3.38 0.00

+/-Mstr Lft Mod 2020

Income Return % Capital Return %

11.74

1

Total Rtn % Rank Cat

Pillar Spectrum Positive

0.21 0.18 0.14 . . . . . 0.20 0.00 . . . . . 0.17 0.04 0.10

0.21 0.05

0.20 0.09

0.00 0.00

Income $

§ Negative

¶ Neutral

Capital Gains $

Expense Ratio % 0.74 . . . . . . . . . . . Income Ratio % . 1.96 2.24 2.33 2.79 2.33

Performance 09-30-13 1st Qtr 2nd Qtr

1.47 . . . . .

3rd Qtr

4th Qtr

Total

4 1 1 . . . . . . 7 8

Turnover Rate % Net Assets $mil

. 971

2009 2010 2011 2012 2013

-6.58 14.87 13.22 4.36 26.79 2.84 -6.90 10.00 5.24 10.84 3.53 1.17 -9.68 6.52 0.77 7.54 -1.47 4.57 1.64 12.63 5.56 0.88 4.93 . .

593 229 146 . . . . . 414

688

828

Rating and Risk Time Load-Adj

Portfolio Analysis 06-30-13 Total Stocks:0

Morningstar

Morningstar Risk vs Cat

Morningstar Risk-Adj Rating

P/E

YTD % Net

Period Return % Rtn vs Cat

Share change since 03-31-13

Sectors

Ratio Return % Assets

1 Yr 3 Yr 5 Yr

7.04 7.95 6.79

Trailing

Total

+/- M* +/- Mstr

%Rank Growth of

American Funds US Government Sec R6 American Funds Washington Mutual R6 American Funds American Balanced R6 American Funds Invmt Co of Amer R6 American Funds Fundamental Invs R6 American Funds Capital Inc Bldr R6 American Funds Inc Fund of Amer R6 American Funds American Mutual R6 American Funds Interm Bd Fd of Amer R6

-1.89 10.00 20.44 8.08 13.63 8.00 20.22 6.96 19.93 6.05 9.57 6.00 11.75 6.00 18.07 5.97 -0.72 5.00

. . . . . . . . .

Return% MdTgRkLft Mod 2020

Cat

$10,000

Avg -Avg

Avg Avg

3 Mo 6 Mo 1 Yr

4.93 0.44 5.85 1.92 13.57 2.86 10.10 0.76 8.06 -0.24

0.62 2.66 4.10 0.24 -0.51

15 10,493 2 10,585 4 11,357 7 13,346

10 Yr Incept

. . . .

3.16

3 Yr Avg 5 Yr Avg 10 Yr Avg 15 Yr Avg

Other Measures

Standard Index

Best Fit Index M* MdTgRk

23 14,734 . . . . . . . . . . Tax Analysis Tax-Adj Rtn% %Rank Cat Tax-Cost Rat %Rank Cat

M* MdTgRk

Alpha

0.7

0.7

Beta

1.00

1.00

Date of Maturity

Amount

Value % Net $000 Assets

R-Squared

98

98

Total Fixed-Income:0

$000

3 Yr (estimated) 5 Yr (estimated) 10 Yr (estimated)

6.95 5.76

51 64

0.92 0.97

57

Standard Deviation

8.51

65 . . . .

Mean

10.10

Sharpe Ratio

1.17

Potential Capital Gain Exposure: 15% of assets

Morningstar’s Take by Janet Yang, CFA 08-27-13 Although questions still remain about American Funds Target Date Retirement 2020’s fixed-income side, recent changes spur optimism. This target-date series remains one of the stronger mutual fund offerings available, and that’s reflected in its across-the-board positive pillar scores. Still, years of inconsistent performance prompted American to rethink its approach to bonds, and the uncertainty created by the firm’s now multiyear effort to evolve its fixed-income investing process holds back the series’ overall rating. American’s insular qualities have caused some of these issues; although the firm’s low personnel turnover has benefited investors overall, it has also appeared to shield the bond team from a rapidly changing bond market. To the firm’s credit, it has begun to address some of the issues. For example, recognizing the importance of a fund’s overall interest-rate and sector positioning, the group has been trying new methods to bring tighter

independence often touted by the firm’s multimanager approach. Toward the beginning of this year, the firm also took the uncharacteristic step of hiring outsiders to senior level positions within the group. The high quality of those hires brings the potential that, although American’s fixed-income efforts appear to be several years behind its competitors, it may not take as long to catch up with them. Meanwhile, the series enjoys some of the best equity offerings around. All of those funds are highly regarded by Morningstar analysts, and their strong returns, along with a generally greater-than-average allocation to equities, have played an important role in the series’ impressive short- and long-term results. Observing the firm’s fixed-income offerings through a few more market environments should help shed light on the outcome of their makeover. In the meantime, American’s model corporate culture combined with the series’ stellar equity lineup, attractive fees, and experienced team continue to bode well for investors.

Equity Style

Fixed-Income Style Duration: Moderate Quality: Medium Avg Eff Duration Avg Eff Maturity Avg Credit Quality Avg Wtd Coupon 1

Style: Blend Size: Large-Cap Value Measures Price/Earnings Price/Book Price/Sales Price/Cash Flow Dividend Yield % Growth Measures Long-Term Erngs Book Value Sales Cash Flow Historical Erngs

4.1 Yrs

Rel Category

.

15.19 2.24 1.34 7.70 2.62 9.19 3.46 1.58 3.64 -2.33

1.05 1.21 1.16 1.18 1.13 0.84 0.33 0.22 0.47 NMF

A

3.82%

figure provided by fund as of 06-30-13 1

Sector Weightings

% of Stocks

Rel M* MdTgRk High

3 Year Low

% Rel Category

Cyclical 30.75 0.78 BasicMat 4.88 0.84 6 4 CnsmrCyc13.20 1.11 13 10 FinanSvs 11.43 0.65 12 10 Real Est 1.24 0.31 1 1 Sensitive 41.16 1.09 CommSrvs 6.67 1.70 9 7 Energy 9.44 1.04 12 9 Industrl 13.26 1.10 15 13 Technlgy 11.79 0.93 13 11 Defensive28.09 1.23 CnsmrDef 9.46 1.10 11 9 Hlthcare 14.47 1.43 14 10 Utilities 4.16 0.99 5 4

h r t y u j i o p a k s d f

Market Cap % Giant 52.4 Large 33.6 Mid 12.0

Small Micro

1.7 0.3

coordination among the various fixed-income managers. That’s in marked contrast to the

Avg $mil:

42,985

Address:

American Funds Target Date Retiremt Ser Los Angeles, CA 90071-1447 800-421-4225

Minimum Purchase: Min Auto Inv Plan:

$250 $250

Add: $50 IRA: $250

Composition - Net

Add: $50

Cash 9.2 Stocks 64.9 Bonds 23.7 Other 2.2 Foreign 31.5

Sales Fees:

5.75%L, 0.10% 3Yr:$818 Annually

Web Address: Inception: Advisor: Subadvisor: NTF Plans:

www.americanfunds.com

Management Fee:

02-01-07

Actual Fees:

Mgt:0.10% Dist:0.23%

Capital Research and Management Company

Expense Projections: Income Distribution:

5Yr:$1005 10Yr:$1544

None

(% of Stock)

Schwab Instl NTF

Mutual Funds ß ®

© 2013Morningstar, Inc.All rights reserved. The information herein isnot represented orwarranted to be accurate, correct, complete or timely. Pastperformance isnoguarantee of future results.Access updated reports at To order reprints, call 312-696-6100. mfb.morningstar.com.

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