AAOTX vs. VT

Last updated Jul 11, 2026

AAOTX (American Funds 2065 Target Date Retirement Fund Class A) and VT (Vanguard Total World Stock ETF) are both funds - AAOTX is a Target Retirement Date fund managed by American Funds, while VT is a Global Equities fund tracking the FTSE Global All Cap Index. Over the past 5 years, AAOTX returned 9.25%/yr vs 10.78%/yr for VT. With a 0.98 correlation, they move nearly in lockstep. AAOTX charges 0.73%/yr vs 0.06%/yr for VT.

Performance

AAOTX vs. VT - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in American Funds 2065 Target Date Retirement Fund Class A (AAOTX) and Vanguard Total World Stock ETF (VT). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, AAOTX achieves a 10.58% return, which is significantly lower than VT's 12.41% return.

AAOTX

• 1D: 0.82%
• 1M: 1.47%
• 6M: 7.42%
• YTD: 10.58%
• 1Y: 19.92%
• 3Y*: 18.50%
• 5Y*: 9.25%
• 10Y*: —

VT

• 1D: 0.40%
• 1M: 1.22%
• 6M: 9.67%
• YTD: 12.41%
• 1Y: 24.11%
• 3Y*: 19.87%
• 5Y*: 10.78%
• 10Y*: 12.58%

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

AAOTX vs. VT - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020
AAOTX American Funds 2065 Target Date Retirement Fund Class A	10.58%	20.36%	15.20%	21.16%	-19.94%	16.85%	46.68%
VT Vanguard Total World Stock ETF	12.41%	22.43%	16.49%	22.02%	-18.00%	18.27%	47.19%

Correlation

The correlation between AAOTX and VT is 0.97 - these two move nearly in lockstep. At this level, holding both provides almost no diversification benefit. If you already own one, adding the other does little to reduce portfolio risk.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.97
Correlation (3Y) Calculated over the trailing 3-year period	0.97
Correlation (5Y) Calculated over the trailing 5-year period	0.98
Correlation (All Time) Calculated using the full available price history since Mar 27, 2020	0.98

The correlation between AAOTX and VT has been stable across timeframes, ranging from 0.97 to 0.98 - a consistent structural relationship.

Return for Risk

AAOTX vs. VT — Risk / Return Rank

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

AAOTX

AAOTX Risk / Return Rank: 47
AAOTX Sharpe Ratio Rank: 46
AAOTX Sortino Ratio Rank: 44
AAOTX Omega Ratio Rank: 46
AAOTX Calmar Ratio Rank: 43
AAOTX Martin Ratio Rank: 56

VT

VT Risk / Return Rank: 66
VT Sharpe Ratio Rank: 66
VT Sortino Ratio Rank: 65
VT Omega Ratio Rank: 66
VT Calmar Ratio Rank: 61
VT Martin Ratio Rank: 71

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.

AAOTX vs. VT - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for American Funds 2065 Target Date Retirement Fund Class A (AAOTX) and Vanguard Total World Stock ETF (VT). 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.

Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.

	AAOTX	VT	Difference
Sharpe ratio: Return per unit of total volatility	1.52	1.73	-0.21
Sortino ratio: Return per unit of downside risk	2.15	2.41	-0.26
Omega ratio: Gain probability vs. loss probability	1.28	1.31	-0.03
Calmar ratio: Return relative to maximum drawdown	2.01	2.44	-0.43
Martin ratio: Return relative to average drawdown	8.87	10.41	-1.54

AAOTX vs. VT - Sharpe Ratio Comparison

The current AAOTX Sharpe Ratio is 1.52, which is comparable to the VT Sharpe Ratio of 1.73. The chart below compares the historical Sharpe Ratios of AAOTX and VT, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

AAOTX vs. VT - Drawdown Comparison

The maximum AAOTX drawdown since its inception was -27.57%, smaller than the maximum VT drawdown of -50.27%. Use the drawdown chart below to compare losses from any high point for AAOTX and VT.

Drawdown Indicators

	AAOTX	VT	Difference
Max Drawdown Largest peak-to-trough decline	-27.57%	-50.27%	+22.70%
Max Drawdown (1Y) Largest decline over 1 year	-9.82%	-9.67%	-0.15%
Max Drawdown (3Y) Largest decline over 3 years	-15.53%	-16.51%	+0.98%
Max Drawdown (5Y) Largest decline over 5 years	-27.57%	-26.38%	-1.19%
Max Drawdown (10Y) Largest decline over 10 years	—	-34.24%	—
Current Drawdown Current decline from peak	-0.63%	-0.72%	+0.09%
Average Drawdown Average peak-to-trough decline	-5.94%	-6.99%	+1.05%
Ulcer Index Depth and duration of drawdowns from previous peaks	2.22%	2.26%	-0.04%

Volatility

AAOTX vs. VT - Volatility Comparison

American Funds 2065 Target Date Retirement Fund Class A (AAOTX) and Vanguard Total World Stock ETF (VT) have volatilities of 4.74% and 4.90%, respectively, indicating that both stocks experience similar levels of price fluctuations. This suggests that the risk associated with both stocks, as measured by volatility, is nearly the same. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	AAOTX	VT	Difference
Volatility (1M) Calculated over the trailing 1-month period	4.74%	4.90%	-0.16%
Volatility (6M) Calculated over the trailing 6-month period	10.77%	11.41%	-0.64%
Volatility (1Y) Calculated over the trailing 1-year period	12.97%	13.61%	-0.64%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	14.88%	16.19%	-1.31%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	15.11%	17.15%	-2.04%

AAOTX vs. VT - Expense Ratio Comparison

AAOTX has a 0.73% expense ratio, which is higher than VT's 0.06% expense ratio.

Dividends

AAOTX vs. VT - Dividend Comparison

AAOTX's dividend yield for the trailing twelve months is around 3.98%, more than VT's 1.58% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
AAOTX American Funds 2065 Target Date Retirement Fund Class A	3.98%	4.41%	2.52%	1.71%	3.67%	1.34%	0.60%	0.00%	0.00%	0.00%	0.00%	0.00%
VT Vanguard Total World Stock ETF	1.58%	1.82%	1.95%	2.08%	2.20%	1.82%	1.66%	2.32%	2.53%	2.11%	2.39%	2.45%

Frequently Asked Questions

Can I hold both AAOTX and VT in my portfolio?

With a correlation of 0.97, AAOTX and VT move almost identically. Holding both adds very little diversification - you're essentially doubling your position in the same market segment. Choosing one is usually more capital-efficient.

Which is riskier, AAOTX or VT?

VT has higher volatility (4.90%) compared to AAOTX (4.74%). In terms of maximum drawdown, AAOTX dropped -27.57% vs VT's -50.27%.

Which has better risk-adjusted returns?

VT currently has the higher Sharpe Ratio (1.73 vs 1.52), 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.