AAATX vs. LTEBX

Last updated Jun 3, 2026

AAATX (American Funds 2010 Target Date Retirement Fund) and LTEBX (American Funds Limited Term Tax-Exempt Bond Fund) are both mutual funds - AAATX is a Target Retirement Date fund managed by American Funds, while LTEBX is a Municipal Bonds fund managed by American Funds. Over the past 10 years, AAATX returned 6.20%/yr vs 1.80%/yr for LTEBX. At a 0.01 correlation, their price movements are largely independent. AAATX charges 0.34%/yr vs 0.57%/yr for LTEBX.

Performance

AAATX vs. LTEBX - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in American Funds 2010 Target Date Retirement Fund (AAATX) and American Funds Limited Term Tax-Exempt Bond Fund (LTEBX). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, AAATX achieves a 3.76% return, which is significantly higher than LTEBX's 0.80% return. Over the past 10 years, AAATX has outperformed LTEBX with an annualized return of 6.20%, while LTEBX has yielded a comparatively lower 1.80% annualized return.

AAATX

• 1D: -0.16%
• 1M: 0.87%
• YTD: 3.76%
• 6M: 4.45%
• 1Y: 11.67%
• 3Y*: 10.06%
• 5Y*: 5.04%
• 10Y*: 6.20%

LTEBX

• 1D: 0.00%
• 1M: 0.28%
• YTD: 0.80%
• 6M: 1.24%
• 1Y: 4.99%
• 3Y*: 3.94%
• 5Y*: 1.37%
• 10Y*: 1.80%

*Multi-year figures are annualized to reflect compound growth (CAGR)

AAATX vs. LTEBX - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
AAATX American Funds 2010 Target Date Retirement Fund	3.76%	12.73%	7.83%	8.44%	-9.50%	9.02%	8.84%	13.51%	-2.85%	9.97%
LTEBX American Funds Limited Term Tax-Exempt Bond Fund	0.80%	6.02%	1.97%	3.82%	-5.12%	-0.01%	4.01%	4.67%	1.08%	2.95%

Correlation

The correlation between AAATX and LTEBX is 0.39, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.39
Correlation (3Y) Calculated over the trailing 3-year period	0.36
Correlation (5Y) Calculated over the trailing 5-year period	0.32
Correlation (10Y) Calculated over the trailing 10-year period	0.19
Correlation (All Time) Calculated using the full available price history since Feb 5, 2007	0.01

Over the past year, AAATX and LTEBX have become more correlated (0.39) than their long-term average of 0.01, meaning their price movements have been converging.

Return for Risk

AAATX vs. LTEBX — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

AAATX

AAATX Risk / Return Rank: 65
AAATX Sharpe Ratio Rank: 72
AAATX Sortino Ratio Rank: 74
AAATX Omega Ratio Rank: 73
AAATX Calmar Ratio Rank: 49
AAATX Martin Ratio Rank: 57

LTEBX

LTEBX Risk / Return Rank: 66
LTEBX Sharpe Ratio Rank: 85
LTEBX Sortino Ratio Rank: 89
LTEBX Omega Ratio Rank: 94
LTEBX Calmar Ratio Rank: 33
LTEBX Martin Ratio Rank: 28

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

AAATX vs. LTEBX - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for American Funds 2010 Target Date Retirement Fund (AAATX) and American Funds Limited Term Tax-Exempt Bond Fund (LTEBX). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

	AAATX	LTEBX	Difference
Sharpe ratio Return per unit of total volatility	2.46	2.74	-0.27
Sortino ratio Return per unit of downside risk	3.58	4.32	-0.74
Omega ratio Gain probability vs. loss probability	1.48	1.74	-0.26
Calmar ratio Return relative to maximum drawdown	2.70	2.21	+0.49
Martin ratio Return relative to average drawdown	11.59	6.89	+4.70
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

AAATX vs. LTEBX - Sharpe Ratio Comparison

The current AAATX Sharpe Ratio is 2.46, which is comparable to the LTEBX Sharpe Ratio of 2.74. The chart below compares the historical Sharpe Ratios of AAATX and LTEBX, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Sharpe Ratios by Period

	AAATX	LTEBX	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.46	2.74	-0.27
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.78	0.60	+0.18
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.93	0.77	+0.16
Sharpe Ratio (All Time) Calculated using the full available price history	0.56	1.47	-0.91

Drawdowns

AAATX vs. LTEBX - Drawdown Comparison

The maximum AAATX drawdown since its inception was -40.44%, which is greater than LTEBX's maximum drawdown of -8.33%. Use the drawdown chart below to compare losses from any high point for AAATX and LTEBX.

Drawdown Indicators

	AAATX	LTEBX	Difference
Max Drawdown Largest peak-to-trough decline	-40.44%	-8.33%	-32.11%
Max Drawdown (1Y) Largest decline over 1 year	-4.42%	-2.33%	-2.09%
Max Drawdown (3Y) Largest decline over 3 years	-5.57%	-2.91%	-2.66%
Max Drawdown (5Y) Largest decline over 5 years	-14.99%	-8.33%	-6.66%
Max Drawdown (10Y) Largest decline over 10 years	-15.13%	-8.33%	-6.80%
Current Drawdown Current decline from peak	-0.16%	-1.06%	+0.90%
Average Drawdown Average peak-to-trough decline	-4.35%	-1.06%	-3.29%
Ulcer Index Depth and duration of drawdowns from previous peaks	1.03%	0.75%	+0.28%

Volatility

AAATX vs. LTEBX - Volatility Comparison

American Funds 2010 Target Date Retirement Fund (AAATX) has a higher volatility of 1.54% compared to American Funds Limited Term Tax-Exempt Bond Fund (LTEBX) at 0.70%. This indicates that AAATX's price experiences larger fluctuations and is considered to be riskier than LTEBX based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	AAATX	LTEBX	Difference
Volatility (1M) Calculated over the trailing 1-month period	1.54%	0.70%	+0.84%
Volatility (6M) Calculated over the trailing 6-month period	3.83%	1.48%	+2.35%
Volatility (1Y) Calculated over the trailing 1-year period	4.81%	1.81%	+3.00%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	6.53%	2.32%	+4.21%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	6.68%	2.34%	+4.34%

AAATX vs. LTEBX - Expense Ratio Comparison

AAATX has a 0.34% expense ratio, which is lower than LTEBX's 0.57% expense ratio.

Dividends

AAATX vs. LTEBX - Dividend Comparison

AAATX's dividend yield for the trailing twelve months is around 6.59%, more than LTEBX's 2.59% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
AAATX American Funds 2010 Target Date Retirement Fund	6.59%	6.84%	5.16%	3.53%	3.41%	3.78%	3.72%	3.48%	3.79%	2.51%	2.67%	4.60%
LTEBX American Funds Limited Term Tax-Exempt Bond Fund	2.59%	3.39%	2.34%	1.74%	0.87%	1.24%	1.92%	2.19%	2.04%	2.21%	1.92%	2.34%

Frequently Asked Questions

Can I hold both AAATX and LTEBX in my portfolio?

AAATX and LTEBX have a correlation of 0.39, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, AAATX or LTEBX?

AAATX has higher volatility (1.54%) compared to LTEBX (0.70%). In terms of maximum drawdown, AAATX dropped -40.44% vs LTEBX's -8.33%.

Which has better risk-adjusted returns?

LTEBX currently has the higher Sharpe Ratio (2.74 vs 2.46), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.