Consequently, it seems likely that a growing number of 401(k) plan participants—as well as plan sponsors and their advisers—will be curious to know how the target-date fund offerings on their menus have fared.
Asset allocations in these target-date funds vary widely, of course, mirroring variances in the glide path philosophies that underpin them (see “Invest-O-Matic,’ “FAAF: Glide Paths – Getting From Here to There’)—and those variances are most evident in the target-date fund closest to the target date. That’s also the place/time when workers are potentially most vulnerable to the fluctuations in the market, of course.
According to Target Date Analytics (TDA), the “raw” average year-to-date performance of the four largest 2010 funds (the ones for folks closest to retirement) at September 30: -13.73%.
The following are returns provided by TDA based on Morningstar data. The four funds listed hold about 90% of all the assets invested in 2010 funds, according to TDA. Their performance for the periods indicated is presented alongside the PLANSPONSOR On-Target Defensive Index (OTI), one of four new benchmarks for target-date funds released by PLANSPONSOR.
|Fund & ticker||4 wks||3 months||YTD||12 months||3 yr|
|Fidelity 2010 (FFFCX)||-6.92%||-8.62%||-12.95%||-13.60%||1.46%|
|T. Rowe 2010 (TRRAX)||-7.56%||-8.11%||-14.00%||-14.93%||1.95%|
|Vanguard 2010 (VTENX)||-6.06%||-6.32%||-11.23%||-11.30%||N/A|
|Principal 2010 (PTTIX)||-8.23%||-10.38%||-16.72%||-18.68%||-0.65%|
|PLANSPONSOR OTI 2010||-2.90%||-3.12%||-0.81%||1.69%||5.14%|
More information about the PLANSPONSOR On-Target Indexes is available at http://www.tdbench.com/IndexData.html