The Vanguard Target Retirement 2045 Fund ("VTIVX") is a target-date fund designed for individuals who aim to retire in, or within a few years of, 2045. The fund automatically adjusts its investment allocation so that it becomes more conservative as it gets closer to the retirement year of 2045. It provides broad diversification, but decreases exposure to equities and increases exposure to bonds as the target date approaches. It will continue to adjust its asset allocation for seven years after 2045, until it equals the allocation of the Vanguard Target Retirement Income Fund ("VTINX"), which is composed of 30% equities and 70% bonds.
The fund invests all of its assets in four different Vanguard index funds. The names and descriptions of these funds, along with their relative portfolio weights, are presented in detail below.
The Vanguard Total Stock Market Fund Investor Shares ("VTSMX") seeks to mimic the performance of the CRSP US Total Market Index, which measures the investment return of the overall stock market. The index invests across all market capitalizations and represents approximately 100% of investable companies in the U.S. equity market. The fund invests in 3,728 different equity securities, and of those the top 10 holdings, represent 15.5% of the fund's assets. It has $385.9 billion of assets under management (AUM) and has a 54% portfolio weighting in the Vanguard Target Retirement 2045 Fund.
The Vanguard Total International Stock Index Fund Investor Shares ("VGTSX") aims to mirror the performance of the FTSE Global All Cap ex US Index, which tracks the return of stocks issued by companies located in developed and emerging markets. The fund invests in 42 different countries in every major region of the world. Its top five countries by portfolio weight are Japan, the United Kingdom, France, Switzerland and Germany, which together comprise 51.50% of the portfolio. The top five weighted emerging market countries the fund invests in are China, Taiwan, India, South Africa and Brazil, which together comprise 12.1% of the fund's total assets. Overall, the fund invests in 6,010 individual stocks, has $183.4 billion of AUM and has a 36% portfolio weighting in the Vanguard Target Retirement 2045 Fund.
The Vanguard Total Bond Market II Index Fund Investor Shares ("VTBIX") provides a broad diversified exposure to the domestic bond market. It seeks to mimic the performance of the Barclays U.S. Aggregate Float Adjusted Index, which tracks and measures the performance of investment-grade, taxable, fixed-income securities in the United States with maturities greater than one year. The fund's two largest treasury and government mortgage-backed securities comprise 60.8% of its total portfolio. The fund has an average effective maturity of 7.9 years. Its yield to maturity is 2.32%, and its average duration is 5.7 years. The fund invests in 7,147 different fixed income securities from 10 different types of issuers and has a 7% portfolio weighting in the Vanguard Target Retirement 2045 Fund.
The Vanguard Total International Bond Index Fund Investor Shares ("VTIBX") offers exposure to investment-grade bonds of non-U.S. issuers. It tracks the performance of the Barclays Global Aggregate ex-USD Float Adjusted RIC Capped Index, which includes international government, agency and corporate securities from developed and emerging market countries. The fund aims to fully hedge price movements from currency exposures with a capped exposure limit of 20% for any single bond issuer, including foreign governments. Its top five weighted countries are Japan, France, Germany, the United Kingdom and Italy, which together comprise 60.4% of the total portfolio. Its top five weighted emerging market countries are Mexico, Poland, Malaysia, Thailand and South Africa, which together total only 3.1% of the portfolio. The fund invests in 3,965 different bonds from 36 different countries and has a 3% portfolio weighting in the Vanguard Target Retirement 2045 Fund.