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The performance data shown is past performance and is no guarantee or reliable indicator of future results.
All investments are subject to risk, including the possible loss of principal. Results from other time periods may differ. Active investing may have higher costs than passive investing and may underperform the broad market or passive peers with similar objectives. Passive investing may lag the performance of actively managed peers as holdings are not reallocated based on changes in market conditions or outlooks on specific securities.
For more information on the methodology of this analysis, please visit troweprice.com/complete-performance-study.
Analysis by T. Rowe Price. Comparable passive funds are (1) mutual funds and exchange-traded funds (ETFs) classified as an “index fund” in the Morningstar Direct database and (2) in the same Morningstar category as the active funds being analyzed. All Active Managers represents the actively managed (non-index fund) mutual funds and ETFs in the Morningstar Direct database, excluding those managed by T. Rowe Price. The performance of the T. Rowe Price active funds and the All Active Managers funds were compared against the comparable passive funds using 10-year rolling monthly periods from 1/1/05 to 12/31/24. The analysis was conducted at the Morningstar category level, analyzing all open-end funds and ETFs within U.S. Morningstar categories where passive funds are present. Oldest share class returns are used for analysis. Money market funds are excluded from the analysis.
All Funds
1 115 funds covering 9,303 rolling 10-year periods.
2 579 funds covering 48,375 rolling 10-year periods. The active assets under management (AUM) as of 12/31/24 across all funds considered in the analysis are aggregated, and those funds offered at any point in the analysis period by the largest five active fund managers by AUM, identified by Morningstar, other than T. Rowe Price are grouped together here. Source: Morningstar.
3 5,562 funds covering 393,259 rolling 10-year periods, excluding T. Rowe Price.
Equity Funds
1 53 funds covering 5,440 rolling 10-year periods.
2 328 funds covering 31,586 rolling 10-year periods. The active assets under management (AUM) as of 12/31/24 across all funds considered in the analysis are aggregated, and those funds offered at any point in the analysis period by the largest five active fund managers by AUM, identified by Morningstar, other than T. Rowe Price are grouped together here. Source: Morningstar.
3 3,112 funds covering 257,282 rolling 10-year periods, excluding T. Rowe Price.
Fixed Income Funds
Fixed income securities are subject to credit risk, liquidity risk, call risk, and interest rate risk. As interest rates rise, bond prices generally fall.
Volatility is measured via standard deviation, annualized and net of fees, over 10-year rolling periods from 1/1/05 to 12/31/24.
31 T. Rowe Price funds are analyzed over 2,182 rolling 10-year periods.
Target Date Funds
1 Average was time-weighted based on the percentage of total rolling performance periods provided by each Retirement Fund.
For more information on the methodology of this analysis, the full study can be accessed at troweprice.com/TDPassiveStudy.
The performance data shown is past performance and is no guarantee or reliable indicator of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. To obtain the most recent month-end performance, visit troweprice.com.
Analysis by T. Rowe Price. Source: Morningstar. The target date funds included in the combined portfolios were (1) defined as passive by Morningstar as they were listed as index-based within their Morningstar Institutional Category, and (2) with the Morningstar universe sharing the same target date as each Retirement Fund. Combined portfolios were equally weighted and based on the oldest share class of each competing passive target date fund. The Retirement 2005 Fund was excluded from the study, as it had a limited number of passive peer constituents in the Morningstar universe; the Retirement 2065 Fund was excluded due to lack of a 10-year track record.
Although in the same category, there may be material differences among target date funds, including fees, expenses, and the portfolio mix of investments. Active investing may have higher costs than passive investing and may underperform the broad market or passive peers with similar objectives. Passive investing may lag the performance of actively managed peers as holdings are not reallocated based on changes in market conditions or outlooks on specific securities. Results for other time periods will differ.
The principal value of the Retirement Funds is not guaranteed at any time, including at or after the target date, which is the approximate year an investor plans to retire (assumed to be age 65) and likely stop making new investments in the fund. If an investor plans to retire significantly earlier or later than age 65, the funds may not be an appropriate investment even if the investor is retiring on or near the target date. The funds’ allocations among a broad range of underlying T. Rowe Price stock and bond funds will change over time. The funds emphasize potential capital appreciation during the early phases of retirement asset accumulation, balance the need for appreciation with the need for income as retirement approaches, and focus on supporting an income stream over a long-term postretirement withdrawal horizon. The funds are not designed for a lump-sum redemption at the target date and do not guarantee a particular level of income. The funds maintain a substantial allocation to equities both prior to and after the target date, which can result in greater volatility over shorter time horizons.
The fund's overall level of risk will directly correspond to the risks of the underlying funds in which it invests. By investing in many underlying funds, the fund has exposure to the risks of different areas of the market, such as the inherent volatility of the equity markets, which may be increased to the extent that the fund invests in small- and mid-cap stocks. Fixed income securities involve interest rate (as rates rise, the price of a fixed income security generally falls), credit, and prepayment risks. International investments are subject to special risks, including currency fluctuations and social, economic, and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. No target date fund is considered a complete retirement program, and there is no guarantee of principal invested or that any single fund will provide sufficient retirement income at or through retirement.
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