As you know from my work here on the efficient frontier, how you invest can be as important as what you invest in. I’m a fan of target maturity funds because they take care of the allocation as one ages. Oftentimes, investors get to retirement and all of a sudden realize too late that they have too much of their portfolio invested in stocks.
Target date funds aren’t perfect, though. I do have concerns about the overlap of these funds and the glut of money in only a handful of stocks. Below you can see the biggest holdings of some of America’s largest target date funds from different companies (Sources: Morningstar, Bloomberg).
The Vanguard Target Retirement 2035 Fund, which owns the Vanguard Total Stock Market Index Fund Institutional Plus Shares as its largest equity holding.
| Rank | Equity | % of Portfolio |
| 1 | Microsoft | 6.27% |
| 2 | Apple | 5.17% |
| 3 | Nvidia | 4.18% |
| 4 | Amazon.com | 3.29% |
| 5 | Meta Platforms | 2.18% |
| 6 | Alphabet | 1.69% |
| 7 | Eli Lilly | 1.47% |
| 8 | JPMorgan Chase | 1.40% |
| 9 | Braodcom | 1.31% |
| 10 | UnitedHealth Group | 1.11% |
The American Funds 2030 Trgt Date Retire F2, which owns the American Balanced Fund R-6 as its largest equity holding.
| Rank | Equity | % of Portfolio |
| 1 | Microsot | 5.66% |
| 2 | Broadcom | 5.40% |
| 3 | UnitedHealth Group | 2.13% |
| 4 | Meta Platforms | 2.09% |
| 5 | Philip Morris International | 1.98% |
| 6 | Eli Lilly | 1.86% |
| 7 | Home Depot | 1.72% |
| 8 | Taiwan Semiconductor | 1.60% |
| 9 | Alphabet | 1.53% |
| 10 | JPMorgan Chase | 1.44% |
The T. Rowe Price Retirement 2030 Advisor, which owns the T Rowe Price Growth Stock Fund as its largest equity holding.
| Rank | Equity | % of Portfolio |
| 1 | Microsoft | 13.43% |
| 2 | Nvidia | 9.77% |
| 3 | Amazon.com | 8.19% |
| 4 | Apple | 8.02% |
| 5 | Alphabet | 5.73% |
| 6 | Meta Platforms | 4.66% |
| 7 | Eli Lilly | 3.45% |
| 8 | Visa | 3.11% |
| 9 | Mastercard | 2.42% |
| 10 | UnitedHealth Group | 2.22% |
Action Line: You can see the overlap in these portfolios, as many of the top ten holdings are the same. When you want to discuss crafting a portfolio that suits your needs and goals, I’m here.
