Vanguard target retirement funds
The Vanguard target retirement funds  are target date funds provided by Vanguard aimed for retirement. As lifecycle offerings they provide investors with a variety of highly diversified all-in-one portfolios. The products are structured as funds-of-funds, charging only weighted averages of the expense ratios associated with the underlying holdings, which are primarily indexed. While the funds are ostensibly designed for investors retiring in a given year (approximately), they may be used for other goals or for markedly different retirement dates, depending on a particular shareholder's objectives and risk tolerance. The funds have a low $1,000 minimum investment for opening a fund account.
Each of the funds, excepting the Vanguard Target Retirement Income Fund] (TR "Income") , has a date specified in its name. The funds become more conservative over time, shifting their asset allocations from equities toward fixed income. The funds' prospectus  indicates that within seven years of the stated date, a given offering's asset allocation will come to resemble that of TR Income Fund  which has a static allocation and is intended primarily for the needs of retired persons.
As of 10/2015, the twelve target retirement funds hold a total of about $193.1 billion in assets; (for comparison, Vanguard Total Stock Market Index holds $400 billion).
Vanguard LifeStrategy funds are similar to TR Funds, but do not implement a glide path. Both LifeStrategy funds and target retirement funds can be used as an all-in-one portfolio. (See also Vanguard funds: life strategy funds vs target retirement funds.
Comparison with generic target date funds
Vanguard Target date funds are target retirement funds primarily build from index funds and charging only weighted averages of the expense ratios associated with the underlying funds. Both of these characteristics make these funds very desirable.
As other target date funds, the Vanguard target retirement funds have the advantage of diversification and asset allocation on auto pilot. Also the criticism are similar: possible mismatch between target retirement year and asset allocation choice, tax inefficiency and possible unsatisfactory allocation choices.
Despite the already low expense ratios, Vanguard could theoretically create even cheaper versions. The underlying holdings are presently all investor class but all the funds utilized already have admiral share classes. Admiral class TR funds would theoretically serve individual shareholders with substantial balances. On the other hand, Vanguard incurs substantial costs in creating and maintaining the TR vehicles. These costs are not passed on directly to their shareholders, and the absence of additional share classes could be viewed as a sort of reimbursement. Vanguard does offer institutional target date retirement funds for institutional accounts.
Choosing a Vanguard target retirement fund
Target retirement funds are marketed for investors who want simplicity of managing their investments. These funds make assumptions about their potential investors; one of which is asset allocation, the single most important decision an investor has to make. They can not know the amount of risk willing to be undertaken by the individual investor.
When choosing a fund, the Bogleheads recommendation is to ignore the fund's date. Instead, determine the amount of risk the investor is willing to tolerate and work backwards to find a fund that matches the chosen stock/bond allocation. The investor may be surprised to find a large discrepancy between the planned retirement date and the fund's target date. Remember that the fund does not know the individual investor.
There are some disadvantages to this method (see below), but the beginning investor should not be dissuaded. Rebalancing at a later time is always an option, especially if the fund is held in a tax-advantaged account.
Summary asset allocation
As of December 2015, TR Fund asset allocations range from 90/10 (stock/bonds) to 30/70 (stocks/bonds).
Detailed fund allocations
As of December 2015, the TR Funds' equity allocations varied from 30% (TR Income) to 90% (TR 2040-2060). More detailed allocation information is provided in the following table. Note: Continuous updates of these figures are available at Vanguard Institutional.
|Vanguard Total Stock Market Index Fund||54.0||53.9||54.1||54.4||53.6||49.2||44.6||40.1||35.8||29.3||20.9||18.2|
|Vanguard Total International Stock Index Fund||36.1||36.0||36.0||36.0||35.7||32.7||29.8||26.7||23.6||19.4||13.6||11.6|
|Vanguard Total Bond Market II Index Fund||7.0||7.1||6.9||7.0||7.5||12.7||18.0||23.3||28.1||30.0||35.5||37.6|
|Vanguard Total International Bond Index Fund||3.0||3.0||3.0||3.0||3.2||5.4||7.6||9.9||12.0||12.8||13.6||15.9|
|Vanguard Short-Term Inflation-Protected Securities Index Fund||0.5||8.5||14.9||16.7|
Vanguard's launched its first six TR Funds on 10/27/2003: TR 2045, 2035, 2025, 2015, 2005, and Income. Five additional funds were opened on 06/07/2006: TR 2050, 2040, 2030, 2020, and 2010. The TR 2055 fund was opened on 8/10/2010; the TR 2060 fund was opened on 01/19/2012. The funds' fiscal year ends on 9/30 of each year.
In the years since launching the TR funds, Vanguard has made two significant changes to the funds' asset allocation: gradually increasing and broadening the international exposure in both equities and bonds; and, in 2006, increasing the funds' asset allocation to equities. These and other changes are detailed in the sections below.
2006 target retirement changes
In March 2006 Vanguard made changes to the asset allocations of its existing TR Funds, increasing their aggressiveness with a larger equity allocation of roughly 10 to 20 percentage points, depending on the fund.  The original TR Fund allocations are provided in the Funds' preliminary prospectus, dated 08/05/2003. Note the five year differential in making comparisons with current breakdowns.
|Vanguard Total Stock Market Index Fund||72||64||48||40||35||20|
|Vanguard European Stock Index Fund||13||11||08||07|
|Vanguard Pacific Stock Index Fund||05||05||04||03|
|Vanguard Total Bond Market Index Fund||10||20||40||50||50||50|
|Vanguard Inflation-Protected Securities Fund||15||25|
|Vanguard Prime Money Market Fund||05|
2010 target retirement fund changes
On September 27, 2010, Vanguard announced that it would replace the three underlying international portfolios with a single broad international stock index fund. Vanguard also increased the overall international equity exposure of these funds from approximately 20% to approximately 30% of the equity allocations.
Under the simplified approach, most of the Target Retirement Funds were comprised of three broad index funds. Target Retirement Funds with target dates greater than five years from the current year offered allocations constructed using only three funds:. As the funds transitioned into the Target Income portfolio, the funds added an inflation-indexed bond fund and a money market fund to the strategic asset allocation.
Allocations in the funds, prior to the change, are documented in the following table, dating from October, 2008.
|Vanguard Total Stock Market Index Fund||72.2||72.1||72.0||72.1||68.2||62.2||56.3||50.2||42.9||32.8||24.3|
|Vanguard European Stock Index Fund||9.8||9.9||10.0||9.9||9.4||8.5||7.8||6.9||5.9||4.6||3.5|
|Vanguard Pacific Stock Index Fund||4.5||4.5||4.4||4.6||4.1||4.0||3.4||3.1||2.7||1.9||1.5|
|Vanguard Emerging Markets Stock Index Fund||3.7||3.7||3.9||3.7||3.6||3.3||3.1||2.6||2.2||1.7||1.3|
|Vanguard Total Bond Market Index Fund||9.8||9.8||9.7||9.7||14.7||22.0||29.4||37.2||40.0||42.2||44.6|
|Vanguard Inflation-Protected Securities Fund||6.3||14.2||19.4|
|Vanguard Prime Money Market Fund||2.6||5.4|
2011 target retirement fund changes
On May 11, 2010 Vanguard announced  that it was dropping the minimum investment in its target retirement funds from $3,000 to $1,000.
2013 target retirement fund changes
In June 2013 Vanguard added the Vanguard Total International Bond Index Fund to the Vanguard target retirement funds. The new international bond fund represented 20% of the fixed income allocation for each of the funds.
Vanguard also replaced the Vanguard Inflation-Protected Securities Fund with Vanguard Short-Term Inflation-Protected Securities Index Fund in Vanguard Target Retirement Income Fund, Vanguard Target Retirement 2010 Fund, and Vanguard Target Retirement 2015 Fund. 
The allocations prior to the change are indicated in the table below.
|Vanguard Total Stock Market Index Fund||62.9||62.9||62.9||62.9||62.9||60.0||54.8||49.4||44.3||38.3||29.9||24.3|
|Vanguard Total International Stock Index Fund||27.1||27.1||27.1||27.1||27.1||26.0||23.7||21.6||19.3||16.8||13.2||9.2|
|Vanguard Total Bond Market Index Fund||9.9||9.9||9.9||9.9||9.9||14.0||21.5||29.0||36.4||39.8||41.6||44.7|
|Vanguard Inflation-Protected Securities Fund||5.1||13.6||19.9|
|Vanguard Prime Money Market Fund||1.7||5.0|
2015 target retirement changes
On February 26, 2015, Vanguard announced "the international equity allocation for both types of funds [target retirement funds and LifeStrategy funds] will increase from 30% to 40% of equity exposure, and the international fixed income allocation will rise from 20% to 30% of nominal fixed income exposure." According to Vanguard, the changes were completed before the end of the 2015 calendar year.
Allocations in the funds, prior to the change, are documented in the following table, dating from June 2013.
|Vanguard Total Stock Market Index Fund||63.2||63.2||63.2||63.4||63.4||60.2||55.1||49.7||44.4||38.3||29.3||21.2|
|Vanguard Total International Stock Index Fund||26.7||26.7||26.6||26.5||26.5||25.1||22.7||20.6||18.4||15.7||12.1||8.9|
|Vanguard Total Bond Market II Index Fund||8.1||8.1||8.1||8.1||8.1||11.8||17.8||23.7||29.8||32.2||35.4||39.6|
|Vanguard Total International Bond Index Fund||2.0||2.0||2.1||2.0||2.0||2.9||4.1||5.8||7.4||9.2||11.8||14.1|
|Vanguard Short-Term Inflation-Protected Securities Index Fund||4.6||11.4||16.2|
- Target Retirement List link
- Vanguard Target Retirement Income Fund (TR "Income")
- TR Income Fund
- Vanguard press release, 2006.
- Vanguard:Changes In Target Retirement Funds, forum discussion
- Vanguard adjusts international equity exposure in Target Retirement Funds and other balanced funds
- Vanguard streamlines construction and improves diversification of Target Retirement Funds
- Vanguard cuts fund minimums, opens door to new investors
- International bond index fund and ETF now available, Vanguard news release, June 14, 2013
- Vanguard enhances diversification for target date funds and other all-in-one funds 26 Feb 2015
- Vanguard increases international equity, bond allocations in target-date funds - Pensions & Investments 26 Feb 2015
- Vanguard's approach to target-date funds Vanguard Research, 10/11/2010.
- Bond diversification in Vanguard Target Retirement Funds,Vanguard Research, November 28, 2014.