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All investments involve some risk, including the AARP Funds. You should read this section carefully and understand these risks.
Several types of risk may affect the Funds:
If the financial health of a security issuer declines, the price of its debt securities could decline or become more volatile, or the issuer could default on its securities (fail to pay interest or principal when due). High-yield securities have more credit risk than investment-grade securities.
Asset-backed securities are debt securities backed by pools of assets like mortgages, auto loans, and leases. Payments of principal and interest from the loans backing these securities are passed through to the investors in these securities. The values of these securities vary with changes in interest rates. Asset-backed securities that are not backed by mortgages have additional risks. For example, some of these loans may be unsecured, meaning that there is no collateral for the loan. If the issuer defaults, there is no collateral to collect to cover losses. Borrowers also may be protected by state and federal consumer credit laws that may be very favorable to borrowers at the expense of investors. Asset-backed securities can be more difficult to value or trade if a regular trading market does not exist for these securities.
The investment adviser of a Fund or Underlying Fund may make investment decisions that fail to produce the intended result. These may include decisions about how to allocate assets among different Underlying Funds, when to rebalance a Fund, when to change Underlying Fund allocations, or which securities to buy and sell and when.
The market values of stocks, bonds, and other securities may go up and down as securities markets react to economic, political, geographic, or regulatory factors. These factors may affect the entire market or just certain securities, industry segments, or economic sectors. In general, stock prices have fluctuated more than bond prices over longer time periods. Price changes may be temporary or may last for extended periods.
There is no guarantee of a Fund's performance. You should expect that the value of your investment in the Fund might go up or down. You might lose money if you invest in the Fund, or make less money than you expect. An investment in a Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
A Fund may temporarily stray from preferred allocations among the Underlying Funds and not perform as well as if it had invested according to the preferred allocations at all times.
For more information about the risks of the Funds and the Underlying Funds, please review the AARP Funds prospectus.
To the extent that a Fund invests in an Underlying Fund, it is exposed to the risks of that Underlying Fund. For example, even though the Aggressive, Moderate, and Conservative Funds invest primarily in the same three Underlying Funds, each Fund will have a different risk profile, because each Fund divides its assets differently among the three Underlying Funds. Below is a look at the risks of the Underlying Funds as they relate to the risks of each of the Funds.
AARP Aggressive Fund
This Fund's investments are weighted toward the Underlying Stock Fund and the Underlying International Fund rather than the Underlying Bond Fund. This means that the Fund will have greater exposure to the risks of investing in the Underlying Stock Fund and the Underlying International Fund than the risks of investing in the Underlying Bond Fund.
AARP Moderate Fund
This Fund's investments are weighted roughly evenly between the Underlying Bond Fund on the one hand and the Underlying Stock Fund and the Underlying International Fund on the other. This means that the Fund will have exposure to the risks of investing in all three portfolios.
AARP Conservative Fund
This Fund's investments are weighted toward the Underlying Bond Fund. This means that the Fund will have greater exposure to the risks of investing in the Underlying Bond Fund than the risks of investing in the Underlying Stock Fund or the Underlying International Fund.
AARP Income Fund
This Fund invests most of its assets in the Underlying Bond Fund. This means that the Fund will have significant exposure to the risks of investing in the Underlying Bond Fund, but normally will not have exposure to the risks of investing in the Underlying Stock Fund or the Underlying International Fund.
The underlying investments of the AARP Income Fund are primarily in taxable bonds; your investment in the fund is subject, but not limited to the same interest rate, inflation and credit risk associated with the underlying bonds.
AARP MoneyMarket Fund
This Fund invests substantially all of its assets in the Underlying Money Market Fund. This means that the risks of the Fund are substantially the same as those of the Underlying Money Market Fund.
An investment in the AARP Money Market Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund.
Below is a list of the main risks that may affect the performance of one or more of the Funds, listed alphabetically. Not all risks apply to all Funds; to see which risks apply to a given Fund, see the Fund Summary in the prospectus.
For more information on these risks please review the AARP Funds prospectus (PDF 1.2mb)
There is no guarantee of the Funds' performance. You should expect that the value of your investment in a fund may go up or down, because the values of all investments do that. You might lose money if you invest in the Funds, or make less money than you expect or hope.
The mutual funds described in this site are sold only to U.S. residents.
An Investment in the Funds involves risk, including possible loss of principal. Please consider the investment objectives, risks, charges and expenses of the AARP Funds carefully before investing. The prospectus contains this and other important information about the Funds. To get a prospectus containing this and other information, click here (PDF) or call 1-866-218-6142. Read it carefully before you invest.
While AARP has licensed the use of its name to AARP Funds and endorses the services provided by AARP Financial Inc., AARP does not offer financial products or services itself and cannot recommend that you or any specific individual should purchase any particular product or service. AARP Financial Inc. is an investment adviser and a subsidiary of AARP.
The Financial Advisors are registered representatives of ALPS Distributors, Inc., a registered broker-dealer, and as investment adviser representatives of AARP Financial Inc., an investment adviser. AARP Financial Inc. offers investment advisory services and is not affiliated with ALPS Distributors, Inc.
AARP Funds are distributed by ALPS Distributors, Inc.
