2010 Funds Have Rough Quarter
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.
Varied Allocations
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