PARFX vs. VFORX

Last updated Jun 5, 2026

PARFX (T. Rowe Price Retirement 2050 Fund) and VFORX (Vanguard Target Retirement 2040 Fund) are both Target Retirement Date funds. Over the past 10 years, PARFX returned 11.30%/yr vs 10.59%/yr for VFORX. With a 0.98 correlation, they move nearly in lockstep. PARFX charges 0.89%/yr vs 0.08%/yr for VFORX.

Performance

PARFX vs. VFORX - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in T. Rowe Price Retirement 2050 Fund (PARFX) and Vanguard Target Retirement 2040 Fund (VFORX). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, PARFX achieves a 10.80% return, which is significantly higher than VFORX's 9.41% return. Over the past 10 years, PARFX has outperformed VFORX with an annualized return of 11.30%, while VFORX has yielded a comparatively lower 10.59% annualized return.

PARFX

• 1D: -0.72%
• 1M: 3.01%
• YTD: 10.80%
• 6M: 11.21%
• 1Y: 24.61%
• 3Y*: 18.15%
• 5Y*: 8.75%
• 10Y*: 11.30%

VFORX

• 1D: -0.64%
• 1M: 2.96%
• YTD: 9.41%
• 6M: 10.03%
• 1Y: 22.81%
• 3Y*: 17.04%
• 5Y*: 8.56%
• 10Y*: 10.59%

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

PARFX vs. VFORX - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
PARFX T. Rowe Price Retirement 2050 Fund	10.80%	18.56%	13.90%	20.55%	-19.31%	17.22%	18.32%	25.12%	-7.93%	20.76%
VFORX Vanguard Target Retirement 2040 Fund	9.41%	18.77%	12.90%	18.56%	-17.00%	14.55%	15.48%	23.86%	-7.32%	18.45%

Correlation

The correlation between PARFX and VFORX is 0.98 - 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	0.98
Correlation (3Y) Calculated over the trailing 3-year period	0.97
Correlation (5Y) Calculated over the trailing 5-year period	0.97
Correlation (10Y) Calculated over the trailing 10-year period	0.97
Correlation (All Time) Calculated using the full available price history since Jan 4, 2007	0.98

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

Return for Risk

PARFX vs. VFORX — Risk / Return Rank

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

PARFX

PARFX Risk / Return Rank: 50
PARFX Sharpe Ratio Rank: 51
PARFX Sortino Ratio Rank: 49
PARFX Omega Ratio Rank: 51
PARFX Calmar Ratio Rank: 45
PARFX Martin Ratio Rank: 56

VFORX

VFORX Risk / Return Rank: 64
VFORX Sharpe Ratio Rank: 65
VFORX Sortino Ratio Rank: 63
VFORX Omega Ratio Rank: 62
VFORX Calmar Ratio Rank: 61
VFORX Martin Ratio Rank: 69

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.

PARFX vs. VFORX - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for T. Rowe Price Retirement 2050 Fund (PARFX) and Vanguard Target Retirement 2040 Fund (VFORX). 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.

	PARFX	VFORX	Difference
Sharpe ratio: Return per unit of total volatility	2.10	2.39	-0.29
Sortino ratio: Return per unit of downside risk	2.94	3.36	-0.42
Omega ratio: Gain probability vs. loss probability	1.39	1.44	-0.05
Calmar ratio: Return relative to maximum drawdown	2.56	3.02	-0.46
Martin ratio: Return relative to average drawdown	11.32	13.32	-1.99
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

PARFX vs. VFORX - Sharpe Ratio Comparison

The current PARFX Sharpe Ratio is 2.10, which is comparable to the VFORX Sharpe Ratio of 2.39. The chart below compares the historical Sharpe Ratios of PARFX and VFORX, 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

	PARFX	VFORX	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.10	2.39	-0.29
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.58	0.69	-0.11
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.74	0.78	-0.04
Sharpe Ratio (All Time) Calculated using the full available price history	0.47	0.50	-0.03

Drawdowns

PARFX vs. VFORX - Drawdown Comparison

The maximum PARFX drawdown since its inception was -53.67%, roughly equal to the maximum VFORX drawdown of -51.63%. Use the drawdown chart below to compare losses from any high point for PARFX and VFORX.

Drawdown Indicators

	PARFX	VFORX	Difference
Max Drawdown Largest peak-to-trough decline	-53.67%	-51.63%	-2.04%
Max Drawdown (1Y) Largest decline over 1 year	-9.77%	-7.70%	-2.07%
Max Drawdown (3Y) Largest decline over 3 years	-15.48%	-12.12%	-3.36%
Max Drawdown (5Y) Largest decline over 5 years	-28.08%	-24.32%	-3.76%
Max Drawdown (10Y) Largest decline over 10 years	-32.52%	-29.35%	-3.17%
Current Drawdown Current decline from peak	-0.72%	-0.64%	-0.08%
Average Drawdown Average peak-to-trough decline	-7.64%	-6.77%	-0.87%
Ulcer Index Depth and duration of drawdowns from previous peaks	2.20%	1.74%	+0.46%

Volatility

PARFX vs. VFORX - Volatility Comparison

T. Rowe Price Retirement 2050 Fund (PARFX) has a higher volatility of 3.56% compared to Vanguard Target Retirement 2040 Fund (VFORX) at 3.06%. This indicates that PARFX's price experiences larger fluctuations and is considered to be riskier than VFORX based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	PARFX	VFORX	Difference
Volatility (1M) Calculated over the trailing 1-month period	3.56%	3.06%	+0.50%
Volatility (6M) Calculated over the trailing 6-month period	9.58%	7.79%	+1.79%
Volatility (1Y) Calculated over the trailing 1-year period	11.87%	9.73%	+2.14%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	15.06%	12.43%	+2.63%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	15.42%	13.67%	+1.75%

PARFX vs. VFORX - Expense Ratio Comparison

PARFX has a 0.89% expense ratio, which is higher than VFORX's 0.08% expense ratio.

Dividends

PARFX vs. VFORX - Dividend Comparison

PARFX's dividend yield for the trailing twelve months is around 3.45%, more than VFORX's 2.53% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
PARFX T. Rowe Price Retirement 2050 Fund	3.45%	3.82%	1.69%	4.32%	7.60%	6.77%	4.27%	5.55%	8.33%	2.34%	3.11%	4.00%
VFORX Vanguard Target Retirement 2040 Fund	2.53%	2.77%	2.86%	2.38%	2.60%	20.68%	2.06%	2.28%	2.58%	0.04%	2.40%	2.99%

Frequently Asked Questions

Can I hold both PARFX and VFORX in my portfolio?

With a correlation of 0.98, PARFX and VFORX 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, PARFX or VFORX?

PARFX has higher volatility (3.56%) compared to VFORX (3.06%). In terms of maximum drawdown, PARFX dropped -53.67% vs VFORX's -51.63%.

Which has better risk-adjusted returns?

VFORX currently has the higher Sharpe Ratio (2.39 vs 2.10), 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.