Oct 29, 2012 ---
Ibbotson Associates reported
target-date fund (TDF) returns experienced gains in the third quarter.
The average target-date fund returned 5.1% in the third
quarter; for the 12-month period ending September 30, the average
target-date fund returned a gain of nearly 19%, due to double-digit U.S. equity
returns in the fourth quarter of 2011 and first quarter of 2012.
Ibbotson noted that flows into target-date funds have
remained strong with nearly $12 billion flowing into the category during the
TDFs continue to see total assets climb; as of the end of
3Q, total assets in target-date funds were nearly $466 billion, a 36% increase
from a year ago with Fidelity, Vanguard and T. Rowe Price holding around 75% of
Equities across the globe and across market
capitalizations rebounded well in 3Q, boosting performance in diversified
strategies such as TDFs. Non-U.S. developed and merging market equities
outperformed U.S. equities. Within the U.S., large cap outperformed small cap
and value outperformed growth. Commodities posted the strongest gains,
returning almost 10% for the quarter. U.S. REITs [real estate investment
trusts] showed moderate performance with a 1% return.
Fixed-income performance was more muted than equity
returns this quarter. The higher credit seeking segments of fixed income, such
as high-yield bonds, topped the list with a 4.5% increase during the period.
Those asset classes with longer durations demonstrated decent performance, as
can be seen with Treasury inflation-protected securities (TIPS) and U.S.
aggregate bonds relative to U.S. short-term bonds and cash.
Ibbotson included performance information on the
Morningstar Lifetime Allocation Indexes as an aid in benchmarking.
More information is athttp://corporate.morningstar.com/ib/documents/TargetMaturity/IA_TM_Report_-_3Q2012.pdf.