A fund’s target date is the approximate year an investor expects to retire and start withdrawing from their account. Funds farthest from the target dates are nearly all-equity to emphasize growth potential; the asset mix grows more conservative as investors move toward — and into — retirement.
Investments in Retirement Strategies are not guaranteed against loss of principal — account values may be more or less than the amount invested — including at the target date. Investing in Retirement Strategies does not guarantee sufficient retirement income.
While diversification and shifting to a more conservative investment mix over time helps to manage risk, it does not guarantee earnings growth. There is the potential to lose money in any investment program. You do not have the ability to actively manage the investments within a Retirement Strategy. The portfolio managers control security selection and asset allocation.
A Word About Risk: The Strategy allocates its investments among multiple asset classes, which will include U.S. and foreign securities, as well as equity and fixed income securities. The risks associated with each of these classes are described in the prospectus. The Strategy may at times use certain types of investment derivatives, such as options, futures, forwards and swaps. These instruments involve risks different from, and in certain cases, greater than, the risks presented by more traditional investments. The Strategy invests in foreign securities, which may include emerging markets securities, whose risks may be magnified due to changes in foreign exchange rates and the possibility of substantial volatility due to political and economic uncertainties in foreign countries. Changes in interest rates will affect the value of the Strategy’s investments in Underlying Portfolios that invest in fixed-income securities. In addition, a bond’s credit rating reflects the issuer’s ability to make timely payments of interest or principal—the lower the rating, the higher the risk of default. If the issuer’s financial strength deteriorates, the issuer’s rating may be lowered and the bond’s value may decline. Funds that invest in small-cap and mid-cap stocks are often more volatile than large-cap stocks—smaller companies generally face higher risks due to their limited product lines, markets and financial resources. The Strategy systematically rebalances its allocations in these asset classes to maintain their target weighting. There can be no assurance that rebalancing will achieve its intended result, and the costs of rebalancing may be significant over time.
As of January 31, 2009, Class B shares are no longer available for purchase by new investors. For additional information, see the Fund’s current prospectus.
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Past performance is no guarantee of future results. For each fund with at least a three-year history, Morningstar calculates a Morningstar RatingTM based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund's monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages.) The Overall Morningstar Rating for a fund is derived from a weighted average of the performance figures associated with its three-, five- and ten-year (if applicable) Morningstar Rating metrics.
Investors should consider the investment objectives, risks, charges and expenses of the Fund/Portfolio carefully before investing. For copies of our prospectus or summary prospectus, which contain this and other information, click here or contact your AB representative. Please read the prospectus and/or summary prospectus carefully before investing.
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