TDF Assets Soar 176%
Target-date funds (TDFs) have continued to rise at an extraordinary rate, according to data from Strategic Insight. In the five years from 2009 through 2014, target-date assets have risen 176% to $747.5 billion—a compound annual growth rate of 23%.
The target-date fund market continues to be concentrated among the largest providers, with the top five families accounting for 81% of total TDF assets. Vanguard is the largest such manager, holding $209.3 billion in assets across its target-date suite as of April 30. Fidelity is the next largest, with $191.9 billion in assets; T. Rowe Price has $137.1 billion; J.P. Morgan Funds holds $33.4 billion; and American Funds has $31.3 billion.
Not surprisingly, as of April 30, four of the top five
individual target-date funds in terms of assets under management (AUM) are
Vanguard funds, with retirement target dates in five-year increments between
2020 and 2035. T. Rowe Price’s Retire 2020 is the fifth largest fund.
| Target-Date Fund Asset Growth | |||||||||
| YEAR-END TOTAL ASSETS ($mm) | |||||||||
| 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | TOTAL ASSETS AS OF APRIL ($mm) | TOTAL GROWTH 2009–2014 | COMPOUND ANNUAL GROWTH RATE 2009 – 2014 | |
| Target-date fund AUM | $251,85 | $335,184 | $370,835 | $474,313 | $610,985 | $695,493 | $747,45 | 176% | 23% |
| Top Five Target-Date Funds by Assets | |||||||||
| YEAR-END TOTAL ASSETS ($MM) | |||||||||
| PORTFOLIO NAME | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | TOTAL ASSETS AS OF APRIL ($mm) | TOTAL GROWTH 2009–2014 | COMPOUND ANNUAL GROWTH RATE 2009 – 2014 |
| Vanguard Target Retirement 2025 | $10,949 | $14,987 | $16,357 | $21,269 | $28,021 | $32,318 | $35,384 | 195% | 24% |
| Vanguard Target Retirement 2020 | $6,577 | $10,071 | $12,288 | $17,324 | $23,878 | $28,525 | $31,276 | 334% | 34% |
| Vanguard Target Retirement 2035 | $7,563 | $10,353 | $11,361 | $15,218 | $21,131 | $24,514 | $27,058 | 224% | 27% |
| Vanguard Target Retirement 2030 | $4,712 | $7,505 | $9,392 | $13,816 | $19,778 | $23,824 | $26,665 | 406% | 38% |
| T. Rowe Price Retire 2020 | $9,389 | $12,154 | $13,353 | $16,390 | $20,679 | $24,081 | $25,746 | 156% | 21% |
| Total | $39,19 | $55,06 | $62,75 | $84,01 | $113,48 | $133,26 | $146,12 | 240% | 28% |
| Largest Target-Date Fund Managers | |||||||||
| YEAR-END TOTAL ASSETS ($mm) | |||||||||
| MANAGER NAME | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | TOTAL ASSETS AS OF APRIL ($mm) | TOTAL GROWTH 2009–2014 | COMPOUND ANNUAL GROWTH RATE 2009 – 2014 |
| Vanguard | $56,172 | $78,880 | $91,340 | $123,307 | $164,674 | $191,161 | $209,314 | 240% | 28% |
| Fidelity | $99,372 | $124,861 | $130,101 | $157,190 | $185,582 | $187,318 | $191,852 | 89% | 14% |
| T. Rowe Price | $42,092 | $55,726 | $62,861 | $80,235 | $105,736 | $126,008 | $137,131 | 199% | 25% |
| J.P. Morgan Funds | $1,624 | $3,251 | $5,539 | $9,373 | $18,807 | $28,510 | $33,369 | 1656% | 77% |
| American Funds | $6,243 | $8,916 | $10,219 | $13,269 | $18,681 | $27,537 | $31,312 | 341% | 35% |
| Total | $205,50 | $271,63 | $300,06 | $383,37 | $493,48 | $560,534 | $602,97 | 173% | 22% |
Source: Strategic Insight Simfund
Data as of April 30