Target Date Funds Brochure

PNC Target Date Funds
Making Saving for Retirement
Simpler for You
Walking With You on the
Path to Retirement
We understand that with the number and variety of retirement savings options
available to you, choosing the right path can be overwhelming. The four PNC
Target Date Funds and PNC Retirement Income Fund are designed to take the
guesswork out of this otherwise daunting process. You choose one fund based
on when you want to retire and leave the rest – diversifying, managing risk,
monitoring the portfolio, staying on track – to us.
What is a
Target Date Fund?
While most mutual funds invest
directly in stocks, bonds, and
other securities, a target date
fund invests in multiple mutual
funds and other investment
products. You choose the target
date fund best aligned with your
expected retirement date. The
asset allocation mix of the fund
automatically shifts as the target
Why You Might Choose
a Target Date Fund
The advantage of investing in any target date fund is that with minimal
effort you gain broad asset class diversification and professional portfolio
management in a single investment.
• Simplified Decision-Making
Investing in an individual retirement account or participating in an employeesponsored plan typically requires you to independently research and mix
mutual funds, which can be confusing and time-consuming. With a target
date fund, you have the option to select just one fund based on your age and
expected retirement date.
• One-Step Diversification
date approaches. Each fund is
With one mutual fund investment, you buy into a fully diversified portfolio
managed for investors who plan
that includes a blend of investments providing exposure to a broad range
to begin withdrawing assets from
of asset classes.
their account around the fund’s
specified target date.
• Professional Management and Asset Reallocation
Portfolio managers with the knowledge and experience needed to provide
proper asset allocation based on your time horizon and risk tolerance
determine the blend of underlying investments in a target date fund, then
reallocate those investments as you approach retirement.
Target Date Funds Aren’t All The Same
Not all target date funds are built alike or managed with the same objectives.
Target date funds have existed for many years, but every mutual fund company
builds and manages its funds differently. Even funds with the same target date
can have very different asset allocations, investment strategies, and income
objectives at retirement.
It is important for investors to understand these differentiating qualities of the
target date funds they are considering before making their selection.
A Fund for Your Retirement Years
So what happens when you reach your target retirement date? Fortunately, you
have the option of remaining invested with PNC Funds. PNC Retirement Income
Fund is designed to be a seamless, next-step investment option for investors
once their target date is reached.
If you are invested in one of the PNC Target Date Funds, upon reaching your
target retirement date your assets automatically roll over into PNC Retirement
Income Fund. And you continue to benefit from the professional management
and asset allocation expertise you’ve enjoyed while invested in your PNC Target
Date Fund. Our goal at this stage is to ensure that you have current income so
that you are able to relax and enjoy your retirement.
Since investors in PNC Retirement Income Fund have reached their target
retirement date, and are likely to begin withdrawing money from their
retirement accounts, the Fund is less invested in equities and higher-volatility
asset classes, and more focused on lower-volatility assets such as fixed
income investments, than the PNC Target Date Funds.
To Learn More About
PNC Target Date Funds:
• Speak to your financial advisor
• Consult your plan administrator
• Visit pncfunds.com
Experienced Team Working for You
• Call 800-622-FUND (3863)
The talented team of investment professionals managing the PNC Target
Date Funds and PNC Retirement Income Fund average more than 17 years
of experience. The Funds benefit from the unique expertise brought by each
member of the team: portfolio management, product management, trading,
and risk management. Their combined knowledge makes them the optimal
team to guide you and your investments into retirement.
Our Objectives, Your Retirement Plan
OUR FUND
WHAT THE FUND AIMS TO DO Build a portfolio of investments
that will provide an appropriate
balance between capital
PNC Target 2040 Fund
appreciation and capital
preservation in light of the
Fund’s target date, with income
PNC Target 2030 Fund
as an additional goal as the Fund
nears its target retirement date.
PNC Target 2020 Fund
PNC Target 2050 Fund
PNC Retirement Income Fund
Seeks current income with capital
appreciation as a secondary goal
MANAGED FOR INVESTORS WHO…
Plan to begin withdrawing assets gradually from
their account around the year 2050
Plan to begin withdrawing assets gradually from
their account around the year 2040
Plan to begin withdrawing assets gradually from
their account around the year 2030
Plan to begin withdrawing assets gradually from
their account around the year 2020
Have already reached their target retirement date
Balancing Risk with Reward
Our goal is for your asset allocation to align with your risk tolerance at every stage of your investment. As
illustrated on this page, our portfolio’s asset allocation starts out aggressive, heavily invested in higher-risk
equities, with the goal of accumulating and growing your retirement assets early on. Around 10-15 years
prior to retirement, the risk of principal loss outweighs the potential rewards. So to protect your savings,
the strategy shifts from capital appreciation to capital preservation. This means the allocation to higher-risk
equities decreases as the allocation to lower-risk fixed income and cash investments increases. PNC Target
2050 Fund has the most aggressive asset allocation, while PNC Retirement Income Fund is invested the
most conservatively.
Understanding that investors have different retirement needs and different withdrawal strategies at
retirement, we manage “to retirement,” at which time the Funds maintain their lowest allocation to equities.
We aim for the inherent risk in the portfolio to be at its lowest when you are preparing for retirement and
your own tolerance for financial risk is also at its lowest.
Asset Allocation of the Funds
AGGRESSIVE
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
PNC Target 2050
Equities
PNC Target 2040
Fixed Income
Equity
• Diversifiers
• Large Cap
• Small Cap
• International
• Dividend Income
• International Small Cap
• Emerging Markets
Diversifiers
PNC Target 2030
PNC Target 2020
CONSERVATIVE
PNC Retirement Income
Cash
Fixed Income
• Core Fixed Income
• Intermediate
• Short Duration
• High Yield
• Money Markets
• Floating Rate
• TIPs
Risk Mitigation Diversifiers
• Commodities
• REITs
• TIPs
• Index Put Options
The pie charts above illustrate a hypothetical asset class mix for each of the four PNC Target Date Funds and
PNC Retirement Income Fund. The table lists the various underlying investments – equity and fixed income
funds, cash, and diversifying asset classes – that the Funds may include in their portfolios at any given time.
Our Funds are Built for Savers
PNC Target Date Funds and PNC Retirement Income Fund were created with savers in mind. Consider these
potential advantages:
• We Go Beyond Stocks and Bonds
In addition to traditional asset classes – equity (stocks), fixed income (bonds), and cash (money markets) –
the portfolio includes non-traditional asset classes such as commodities and real estate investment trusts
(REITs). These non-traditional asset classes typically react differently to market stimuli from the traditional
asset classes (equity and fixed income) and potentially reduce the risk of loss of assets at retirement. The
portfolio you receive is much more complex than the simple decision you make when you choose your fund.
• We Aim to Reduce Risk as You Near Retirement
The Funds’ managers follow a strategy that shifts from capital appreciation to capital preservation. Each
Fund’s asset allocation starts out aggressive but becomes increasingly conservative as the target date
approaches, reducing the potential risk of the portfolio and reflecting investors’ diminishing tolerance for risk.
• We Target Retirement Income You Can Sustain
Our portfolio is made for savers who are ultimately looking for sufficient wealth and sustainable retirement
income. The Funds’ managers strive to deliver attractive returns while defending the portfolios against
market downturns and inflation.
• We Want You to Have Choices When You Retire
Each PNC Target Date Fund maintains its lowest allocation to equity at the target date when the emphasis
shifts to generating income and preserving capital. This allows investors the flexibility to take a distribution,
allow their investment to automatically transition into PNC Retirement Income Fund, or design alternative
retirement options. It’s all about having choices.
IF THIS IS YOUR AGE
CHOOSE THIS PNC FUND
TICKERS
18-34
PNC Target 2050 Fund
PDTIX (Class I)
PDTJX (Class R)
PDTOX (Class T)
35-44
PNC Target 2040 Fund
PDTGX (Class I)
PDTHX (Class R)
PDTNX (Class T)
45-54
PNC Target 2030 Fund
PDTEX (Class I)
PDTFX (Class R)
PDTPX (Class T)
55-64
PNC Target 2020 Fund
PDTCX (Class I)
PDTDX (Class R)
PDTLX (Class T)
PNC Retirement Income Fund
PDTAX (Class I)
PDTBX (Class R)
PDTKX (Class T)
65+
The age ranges above are merely suggested guidelines. Depending on your actual age, number of years until
retirement, and risk tolerance, you may want to consider an alternate PNC Target Date Fund. We encourage you
to speak to a financial advisor to choose the fund that is most appropriate for you.
The Funds are subject to several stock and bond market risks, any of which could cause an investor to lose money. However, based
on the Funds’ current allocation between stocks and the less volatile asset class of bonds, the overall level of risk should be higher
than those funds that invest the majority of the assets in bonds, but lower than those investing entirely in stocks. As the Funds’
allocation between underlying funds gradually changes, their overall level of risk also will decline. In addition to the risks inherent in
the asset classes of the underlying funds, the Funds are also subject to asset allocation risk, which is the chance that the selection
of underlying funds and the allocation of fund assets will cause the Funds to underperform other funds with a similar investment
objective. For further details on all risks, please refer to the Funds’ prospectus. An investment in these Funds is not guaranteed,
and you may experience losses, including losses near, at, or after the target date. There is no guarantee that the Funds will provide
adequate income at and through your retirement.
Asset allocation cannot guarantee a profit or prevent a loss. An investment in any of the Funds is subject to interest rate risk, which
is the possibility that the Fund’s yield will decline due to falling interest rates and the potential for bond prices to fall as interest
rates rise. High yield bond investing includes special risks. Investments in lower rated and unrated debt securities are subject to a
greater loss of principal and interest than investments in higher rated securities. The values of mortgage-backed securities depend
on the credit quality and adequacy of the underlying assets or collateral and may be highly volatile. International investments are
subject to special risks not ordinarily associated with domestic investments, including currency fluctuations, economic and political
change and differing accounting standards that may adversely affect portfolio securities. These risks may be heightened in emerging
markets. Investments in value companies can continue to be undervalued for long periods of time and be more volatile than the
stock market in general. Investments in growth companies can be more sensitive to the company’s earnings and more volatile than
the stock market in general. Investments in small and mid capitalization companies present a greater risk of loss than investments
in large companies. The Funds may invest a portion of their assets in derivatives. Derivative instruments include options, futures
and options on futures. A small investment in derivatives could have a potentially large impact on the Funds’ performance. The
Funds may be unable to terminate or sell a derivatives position. Derivative counterparties may suffer financial difficulties and may
not fulfill their contractual obligations.
Past performance does not guarantee future results.
You should consider the investment objectives, risks, charges, and expenses of PNC Funds carefully before investing. A prospectus
or summary prospectus with this and other information may be obtained at 800-622-FUND (3863) or pncfunds.com. The prospectus
should be read carefully before investing.
NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
PNC Capital Advisors, LLC, a subsidiary of The PNC Financial Services Group, Inc., serves as investment adviser and coadministrator to PNC Funds and receives fees for its services. PNC Funds are distributed by PNC Funds Distributor, LLC,
which is not affiliated with the adviser and is not a bank.
©The PNC Financial Services Group, Inc. All rights reserved.
PNC-TDB-0516