PNC Target Date Funds. Making Saving for Retirement Simpler for You

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1 PNC Target Date Funds Making Saving for Retirement Simpler for You

2 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 date approaches. Each fund is managed for investors who plan to begin withdrawing assets from their account around the fund s specified target date. 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 With one mutual fund investment, you buy into a fully diversified portfolio that includes a blend of investments providing exposure to a broad range of asset classes. 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.

3 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. Experienced Team Working for You To Learn More About PNC Target Date Funds: Speak to your financial advisor Consult your plan administrator Visit pncfunds.com Call FUND (3863) The talented team of investment professionals managing the PNC Target Date Funds and PNC Retirement Income Fund average more than 22 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 MANAGED FOR INVESTORS WHO PNC Target 2050 Fund PNC Target 2040 Fund PNC Target 2030 Fund PNC Target 2020 Fund Build a portfolio of investments that will provide an appropriate balance between capital appreciation and capital preservation in light of the Fund s target date, with income as an additional goal as the Fund nears its target retirement date. their account around the year 2050 their account around the year 2040 their account around the year 2030 their account around the year 2020 PNC Retirement Seeks current income with capital Have already reached their target retirement date Income Fund appreciation as a secondary goal

4 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 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 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>CONSERVATIVE PNC Target 2050 PNC Target 2040 PNC Target 2030 PNC Target 2020 PNC Retirement Income Equities Fixed Income Diversifiers Cash Equity Diversifiers Large Cap Small Cap International Dividend Income International Small Cap Emerging Markets 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.

5 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 PNC Target 2050 Fund PDTIX (Class I) PDTJX (Class R) PNC Target 2040 Fund PDTGX (Class I) PDTHX (Class R) PNC Target 2030 Fund PDTEX (Class I) PDTFX (Class R) PNC Target 2020 Fund PDTCX (Class I) PDTDX (Class R) 65+ PNC Retirement Income Fund PDTAX (Class I) PDTBX (Class R) 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.

6 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 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-0914