These retirement funds lost less than the market during the recent downturn. iStockphoto By Ryan Ermey, Associate Editor From Kiplinger's Personal Finance, January 2015 When the stock market tumbles, investors, especially those nearing retirement, nervously eye their portfolios. But if you own the right target-date fund, one that’s appropriate for your time horizon, you should breathe a little easier. Tool: Mutual Fund Finder These all-in-one portfolios hold a mix of stocks and bonds that shifts to a more conservative stance over time. Consider the 2020 target funds from Vanguard and T. Rowe Price, which are geared toward investors who plan to retire in about five years. From September 18 through October 15, during which Standard & Poor’s 500-stock index fell 7.3%, Vanguard Target Retirement 2020 (VTWNX) and T. Rowe Price Retirement 2020 (TRRBX) dipped 4.1% and 5.0%, respectively. The funds lost a tad more than the typical 2020 portfolio partly because they tilt more toward stocks than their rivals. The average 2020 portfolio has 50% of its assets in stocks; the Vanguard and Price funds have 60% and 63%, respectively. But the heavier stock exposure also explains their superior five-year results. The funds differ in one important way. While the Vanguard target funds maintain relatively fixed glide paths (the change in asset mix over time), Price’s target funds can tweak allocations based on the managers’ assessment of market conditions. For example, the managers recently trimmed the 2020 fund’s allocation to stocks and junk bonds. * Annualized for three and five years. @ Rankings exclude share classes of this fund with different fee structures or higher minimum initial investments. Sources: Morningstar, Vanguard.