The TDF Beat Marches On

Target-date mutual funds attracted $11.4 billion in the third quarter of the year, resulting in year-to-date intake through September of $51.7 billion, according to Strategic Insight Simfund MF. Net inflows are on track to surpass the annual record set in 2012 of $52.7 billion.

When looking at the top five providers of target-date funds (TDFs), the vast majority of target-date fund assets—nearly three-quarters—continue to be held by the three investment managers­ that also have recordkeeping units: Vanguard, Fidelity and T. Rowe Price. As of the end of the third quarter, Vanguard held $208.9 billion in assets in its target-date funds, which is 29% of the total $716.8 billion in target-date fund assets.

Fidelity Investments, the next most popular target-date fund provider in terms of total assets held, had $175.3 billion in the funds—a 24% market share—to end the third quarter.­ The third most popular, T. Rowe Price, held $128.5 billion in target-date fund assets—18% of the total—at the end of the quarter, followed by J.P. Morgan, with $35.3 billion in TDF assets (a 5% market share) and American Funds, with $32.8 billion in TDF assets (a 4% market share).

In terms of year-to-date net flows through the end of September, Vanguard was the standout, pulling in $27.1 billion, and continuing its dominant position. J.P. Morgan Funds attracted the second-largest amount of assets ($8.4 billion), followed by T. Rowe Price ($7.9 billion), American Funds ($6.7 billion) and TIAA-CREF ($2.2 billion).

Largest and Best-Selling Target-Date Mutual Fund Firms

Target-Date Organic Growth Rate by Objective
(YTD through September 2015)