RFGTX vs. ABALX
RFGTX (American Funds 2040 Target Date Retirement Fund Class R6) and ABALX (American Funds American Balanced Fund Class A) are both mutual funds - RFGTX is a Target Retirement Date fund actively managed by American Funds, while ABALX is a Diversified Portfolio fund managed by American Funds. Over the past 10 years, RFGTX returned 11.80%/yr vs 10.07%/yr for ABALX. With a 0.96 correlation, they move nearly in lockstep. RFGTX charges 0.36%/yr vs 0.56%/yr for ABALX.
Performance
RFGTX vs. ABALX - Performance Comparison
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Returns By Period
In the year-to-date period, RFGTX achieves a 8.60% return, which is significantly lower than ABALX's 9.47% return. Over the past 10 years, RFGTX has outperformed ABALX with an annualized return of 11.80%, while ABALX has yielded a comparatively lower 10.07% annualized return.
RFGTX
- 1D
- -0.51%
- 1M
- 2.87%
- YTD
- 8.60%
- 6M
- 9.19%
- 1Y
- 21.86%
- 3Y*
- 17.95%
- 5Y*
- 9.30%
- 10Y*
- 11.80%
ABALX
- 1D
- -0.46%
- 1M
- 2.87%
- YTD
- 9.47%
- 6M
- 10.29%
- 1Y
- 23.98%
- 3Y*
- 17.24%
- 5Y*
- 9.43%
- 10Y*
- 10.07%
RFGTX vs. ABALX - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | |
|---|---|---|---|---|---|---|---|---|---|---|
RFGTX American Funds 2040 Target Date Retirement Fund Class R6 | 8.60% | 19.52% | 14.80% | 19.33% | -17.53% | 16.88% | 18.79% | 24.37% | -5.51% | 21.98% |
ABALX American Funds American Balanced Fund Class A | 9.47% | 18.45% | 14.63% | 13.65% | -12.13% | 15.75% | 10.85% | 18.60% | -3.35% | 14.69% |
Correlation
The correlation between RFGTX and ABALX 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 | 0.97 |
Correlation (10Y) Calculated over the trailing 10-year period | 0.96 |
Correlation (All Time) Calculated using the full available price history since Jan 5, 2010 | 0.96 |
The correlation between RFGTX and ABALX has been stable across timeframes, ranging from 0.96 to 0.97 - a consistent structural relationship.
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Return for Risk
RFGTX vs. ABALX — Risk / Return Rank
RFGTX
ABALX
RFGTX vs. ABALX - Risk-Adjusted Trends Comparison
This table presents a comparison of risk-adjusted performance metrics for American Funds 2040 Target Date Retirement Fund Class R6 (RFGTX) and American Funds American Balanced Fund Class A (ABALX). 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.
| RFGTX | ABALX | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | -0.64 | ||
| Sortino ratioReturn per unit of downside risk | -0.86 | ||
| Omega ratioGain probability vs. loss probability | 1.40 | 1.53 | -0.13 |
| Calmar ratioReturn relative to maximum drawdown | 2.68 | 3.49 | -0.81 |
| Martin ratioReturn relative to average drawdown | 12.09 | 15.74 | -3.65 |
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month. | |||
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Sharpe Ratios by Period
| RFGTX | ABALX | Difference | |
|---|---|---|---|
Sharpe Ratio (1Y)Calculated over the trailing 1-year period | 2.17 | 2.81 | -0.64 |
Sharpe Ratio (5Y)Calculated over the trailing 5-year period | 0.70 | 0.90 | -0.20 |
Sharpe Ratio (10Y)Calculated over the trailing 10-year period | 0.84 | 0.95 | -0.11 |
Sharpe Ratio (All Time)Calculated using the full available price history | 0.78 | 0.81 | -0.03 |
Drawdowns
RFGTX vs. ABALX - Drawdown Comparison
The maximum RFGTX drawdown since its inception was -28.52%, smaller than the maximum ABALX drawdown of -40.20%. Use the drawdown chart below to compare losses from any high point for RFGTX and ABALX.
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Drawdown Indicators
| RFGTX | ABALX | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -28.52% | -40.20% | +11.68% |
Max Drawdown (1Y)Largest decline over 1 year | -8.39% | -7.03% | -1.36% |
Max Drawdown (3Y)Largest decline over 3 years | -13.48% | -10.68% | -2.80% |
Max Drawdown (5Y)Largest decline over 5 years | -24.85% | -18.76% | -6.09% |
Max Drawdown (10Y)Largest decline over 10 years | -28.52% | -22.34% | -6.18% |
Current DrawdownCurrent decline from peak | -0.51% | -0.46% | -0.05% |
Average DrawdownAverage peak-to-trough decline | -3.91% | -3.85% | -0.06% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 1.85% | 1.55% | +0.30% |
Volatility
RFGTX vs. ABALX - Volatility Comparison
American Funds 2040 Target Date Retirement Fund Class R6 (RFGTX) has a higher volatility of 3.05% compared to American Funds American Balanced Fund Class A (ABALX) at 2.71%. This indicates that RFGTX's price experiences larger fluctuations and is considered to be riskier than ABALX based on this measure. The chart below showcases a comparison of their rolling one-month volatility.
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Volatility by Period
| RFGTX | ABALX | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 3.05% | 2.71% | +0.34% |
Volatility (6M)Calculated over the trailing 6-month period | 8.16% | 6.82% | +1.34% |
Volatility (1Y)Calculated over the trailing 1-year period | 10.33% | 8.73% | +1.60% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 13.28% | 10.49% | +2.79% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 14.09% | 10.67% | +3.42% |
RFGTX vs. ABALX - Expense Ratio Comparison
RFGTX has a 0.36% expense ratio, which is lower than ABALX's 0.56% expense ratio.
Dividends
RFGTX vs. ABALX - Dividend Comparison
RFGTX's dividend yield for the trailing twelve months is around 5.72%, less than ABALX's 7.58% yield.
| Position | TTM | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
ABALX American Funds American Balanced Fund Class A | 7.58% | 8.27% | 6.87% | 2.05% | 2.30% | 4.30% | 4.35% | 3.49% | 5.49% | 4.72% | 4.24% | 5.60% |
RFGTX American Funds 2040 Target Date Retirement Fund Class R6 | 5.72% | 6.22% | 3.80% | 2.81% | 6.71% | 5.22% | 3.53% | 4.59% | 5.29% | 2.70% | 3.88% | 5.43% |
Frequently Asked Questions
With a correlation of 0.97, RFGTX and ABALX 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.
RFGTX has higher volatility (3.05%) compared to ABALX (2.71%). In terms of maximum drawdown, RFGTX dropped -28.52% vs ABALX's -40.20%.
ABALX currently has the higher Sharpe Ratio (2.81 vs 2.17), 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.
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