Flash Crash
(5/3/2010 - 7/2/2010)
In early May 2010, the U.S. financial markets experienced one of the most turbulent periods in their history. The S&P 500 dropped precipitously, followed by a period of elevated velocity, until early July, when the broad U.S. stock market began its eventual recovery.
-4.54%
-13.48%
Prudential Day One 2010 Fund
2010 Target Date Fund Category Average
S&P 500
-5.44%
European Debt Crisis
$500,000
$1,000,000
$100,000
9/14/2010
8/5/2010
7/2/2010
$85,000
$90,000
$95,000
$105,000
$110,000
5/3/2010
$420,000
$440,000
$460,000
$520,000
$540,000
$480,000
$560,000
$820,000
$880,000
$1,040,000
$1,140,000
$1,180,000
$920,000
$960,000
$1,100,000
Max drawdowns
what happened?
How Were Participants Impacted?
•
$91,056
$89,234
$100,030
$98,867
$101,489
$100,157
$455,281
$446,168
$500,152
$494,333
$507,445
$500,783
$910,562
$892,336
$1,000,303
$988,666
$1,014,889
$1,001,567
The Prudential Day One 2010 Fund rebounded 40 days earlier, leading to an additional savings of $1,332 by time the category average recovered.
By August 5, 2010, the portfolio invested in the Prudential Day One 2010 Fund would have recovered from the market correction.
After the market correction, an investment in the 2010 Target Date Fund Category Average participants lost more than the Prudential Day One 2010 Fund.
Consider a hypothetical portfolio that has a balance of $100,000 at the beginning of the correction.
During this time period, the S&P dropped -13.48% and the average 2010 target date fund (the vintage closest to retirement) returned -5.44%.
Over the same period, the Prudential Day One 2010 Fund lost just -4.54%, less than the average 2010 fund. Limiting market losses helped participants recover their losses a full 40 days before the recovery of the category average.
The Prudential Day One 2010 Fund rebounded 40 days earlier, leading to an additional savings of $6,661 by time the category average recovered.
Consider a hypothetical portfolio that has a balance of $500,000 at the beginning of the correction.
The Prudential Day One 2010 Fund rebounded 40 days earlier, leading to an additional savings of $13,322 by time the category average recovered.
Consider a hypothetical portfolio that has a balance of $1,000,000 at the beginning of the correction.
-5.46%
-18.64%
-9.22%
2/8/2012
10/28/2011
10/3/2011
5/2/2011
The Prudential Day One 2010 Fund rebounded 103 days earlier, leading to an additional savings of $7,433 by time the category average recovered.
By October 28, 2011, the portfolio invested in the Prudential Day One 2010 Fund would have recovered from the market correction.
After the market correction, an investment in the average 2010 target date fund lost participants more than the Prudential Day One 2010 Fund.
The Prudential Day One 2010 Fund rebounded 103 days earlier, leading to an additional savings of $37,166 by time the category average recovered.
The Prudential Day One 2010 Fund rebounded 103 days earlier, leading to an additional savings of $74,331 by time the category average recovered.
$70,000
$80,000
$120,000
$340,000
$380,000
$580,000
$660,000
$680,000
$760,000
$840,000
$1,030,000
$1,160,000
$1,240,000
$1,320,000
$89,942
$83,034
$100,602
$94,470
$107,482
$100,049
$449,712
$415,171
$503,008
$472,349
$537,411
$500,245
$899,425
$830,342
$1,006,017
$944,699
$1,074,822
$1,000,491
-4.29%
-11.97%
-5.41%
Prudential Day One 2015 Fund
2015 Target Date Fund Category Average
6/8/2016
The Prudential Day One 2015 Fund rebounded 56 days earlier, leading to an additional savings of $3,993 by time the category average recovered.
4/13/2016
By April 13, 2016, the portfolio invested in the Prudential Day One 2015 Fund would have recovered from the market correction.
8/25/2015
After the market correction, an investment in the average 2015 target date fund lost participants more than the Prudential Day One 2015 Fund.
7/20/2015
The Prudential Day One 2015 Fund rebounded 56 days earlier, leading to an additional savings of $19,967 by time the category average recovered.
The Prudential Day One 2015 Fund rebounded 56 days earlier, leading to an additional savings of $39,935 by time the category average recovered.
$115,000
$940,000
$970,000
$1,080,000
$1,120,000
$92,472
$90,110
$100,501
$96,598
$104,476
$100,483
$462,359
$450,549
$502,506
$482,992
$522,380
$502,413
$924,719
$901,098
$1,005,011
$965,983
$1,044,761
$1,004,826
-5.22%
-12.71%
-6.86%
4/14/2016
The Prudential Day One 2015 Fund rebounded 26 days earlier, leading to an additional savings of $1,710 by time the category average recovered.
3/19/2016
By March 19, 2016, the portfolio invested in the Prudential Day One 2015 Fund would have recovered from the market correction.
2/11/2016
11/4/2015
The Prudential Day One 2015 Fund rebounded 26 days earlier, leading to an additional savings of $8,552 by time the category average recovered.
The Prudential Day One 2015 Fund rebounded 26 days earlier, leading to an additional savings of $17,104 by time the category average recovered.
$90,391
$87,436
$100,152
$98,216
$102,264
$100,554
$451,956
$437,178
$500,759
$491,078
$511,322
$502,770
$903,912
$874,357
$1,001,517
$982,156
$1,022,644
$1,005,539
-10.22%
-5.24%
Prudential Day One 2020 Fund
2020 Target Date Fund Category Average
4/2/2019
The Prudential Day One 2020 Fund rebounded 223 days earlier, leading to an additional savings of $2,223 by time the category average recovered.
8/22/2018
By August 22, 2018, the portfolio invested in the Prudential Day One 2020 Fund would have recovered from the market correction.
2/8/2018
After the market correction, an investment in the average 2020 target date fund lost participants more than the Prudential Day One 2020 Fund.
1/29/2018
The Prudential Day One 2020 Fund rebounded 223 days earlier, leading to an additional savings of $11,114 by time the category average recovered.
The Prudential Day One 2020 Fund rebounded 223 days earlier, leading to an additional savings of $22,229 by time the category average recovered.
$850,000
$910,000
$1,060,000
$1,090,000
$92,815
$91,413
$100,108
$97,343
$102,342
$100,119
$464,076
$457,063
$500,540
$486,717
$511,709
$500,595
$928,151
$914,126
$1,001,080
$973,435
$1,023,419
$1,001,190
-7.4%
-19.4%
-8.4%
The Prudential Day One Fund and the category average recovered on the same day, but the experience was smoother for those in the Prudential Day One 2020 Fund.
3/16/2019
12/31/2018
9/21/2018
$86,676
$85,011
$100,011
$100,146
$433,379
$425,056
$500,054
$500,731
$866,757
$850,111
$1,000,107
$1,001,461
(5/2/2011 - 10/3/2011)
While the European Debt Crisis began in 2009 with debt/default concerns in Greece, the US stock market dropped precipitously (S&P 500: -18.6%) from May 2011 - October of 2011, when default concerns spread to other member countries in the European Union (EU). In May 2011, the eurozone and the International Monetary Fund (IMF) approved a bailout package for Portugal. Despite earlier bailouts provided to Greece, worries persisted that Greece was still likely to default on its debt and that it may be forced out of the EU. Fears then spread to Italy and Spain, which lead to rescue packages for both countries. Finally, in the last days of September, signs of a eurozone rescue plan emerged, calming fears of a global crisis.
(7/20/2015 - 8/25/2015)
Drop in Oil Prices
(11/4/2015 - 2/11/2016)
(1/29/2018 - 2/8/2018)
(9/21/2018 - 12/31/2018)
NEXT
Tap the dots to learn more.
The European Debt Crisis, which began in 2009 with debt/default concerns in Greece, heated up in 2011. Default fears spread to other member countries in the European Union, spooking the global markets.
From May 2, 2011 to October 3, 2011, the S&P 500 dropped -18.64% and the average 2010 target date fund (the fund vintage closest to retirement) returned -9.22%.
Over the same period, the Prudential Day One 2010 Fund lost just -5.46%, less than the average 2010 fund. Limiting market losses helped participants recover their losses over three months before the category average.
In the summer of 2015, investors around the globe feared that the economic slowdown in China would be more dramatic than Chinese officials were reporting. A sell-off in the Chinese stock markets and reactive measures by the Central Bank in China sparked a pullback in the U.S. markets that lasted five weeks.
From July 20, 2015 to August 25, 2015, the S&P 500 lost -11.97% and the average 2015 target date fund (the fund vintage closest to retirement at that time) declined by -5.41%.
In the same time period, the Prudential Day One 2015 Fund lost -4.29%, less than the average 2015 fund. Limiting market losses helped participants recover their losses nearly two months earlier than the recovery of the category average.
A drop in oil prices, soft U.S. consumer data, a slow-down in China, and anticipated interest rate hikes in the U.S. all contributed to a U.S. market sell-off in late 2015 and into 2016.
Between November 4, 2015 and February 11, 2016, the S&P lost -12.71% and the average 2015 target date fund (the fund vintage closes to retirement at that time) declined by -6.86%.
Over the same period, the Prudential Day One 2015 Fund lost -5.22%, less than the average 2015 fund. Limiting market losses helped participants recover their losses more quickly than the recovery of the category average.
In early 2018, the U.S. economy appeared to be charged by new tax cuts, as positive jobs and earning reports showed signs of growth. Investors feared that a heating economy would spark inflation and further interest rate hikes, which led to a short-lived market pullback in the U.S.
From January 29, 2018 to February 8, 2018, the S&P 500 Index lost -10.20% and the average 2020 target date fund (the fund vintage closest to retirement at that time) declined by -5.24%.
Over the same time period, the Prudential Day One 2020 Fund lost just -4.29%, less than the average 2020 fund. Limiting market losses helped participants recover their losses quicker than the recovery of the category average.
A combination of factors drove the increased volatility and stock market decline in the U.S. in late 2018, including trade tensions, concerns about inflation and rising interest rates, excess oil supply, and worries about increased regulation in technology sector. Fueled by a partial U.S. government shutdown, the U.S. stock market had its worst December on record.
From September 21, 2018 through December 31, 2018, the S&P dropped -19.4% and the average 2020 target date fund (the fund vintage closest to retirement at that time) declined by -8.4%.
Over the same time period, the Prudential Day One 2020 Fund lost just 7.4%, less than the average 2020 fund.
$1,150,000
$530,000
Rising Rates and Trade Tensions
China Slowdown
Inflation Fears
Raising Rates and Trade Tensions
Coronavirus Pandemic
(2/19/2020 - 3/23/2020)
In mid-February, amid the realization that the COVID-19 virus was indeed a global pandemic, and that it was likely to have an enormous (and negative) impact on the U.S. economy, there was a precipitous sell-off in the U.S. equity markets.
In the less than six weeks from February 19th to March 23rd, the S&P dropped 33.5% and the average 2025 target date fund returned -20.8%. Over the same time period, the Prudential Day One 2025 Fund returned -18.4%, significantly less that of the average 2025 fund.
As the markets dropped, many older retirement plan participants sold out of their target date funds, locking in losses and impairing their retirement outcomes.
-18.36%
-33.47%
-20.84%
Prudential Day One 2025 Fund
2025 Target Date Fund Category Average
$60,000
$300,000
$350,000
$400,000
$450,000
$550,000
$600,000
$650,000
$700,000
$800,000
$900,000
$1,200,000
$1,300,000
$1,400,000
7/17/2020
6/13/2020
6/4/2020
2/19/2020
By July 17, 2020, the Prudential Day One 2020 Fund would have recovered from the market correction, while the average 2020 fund would not yet have recovered.
3/22/2020
Downloadable Pdf Available
Fund Performance pdf
