TDFs Show 3Q Rebound

For the third quarter, the Callan Target Date Index bounced back from a poor second quarter with a return of 4.57%.

For the year ending September 30, 2012, returns stand at 17.28%. Across the more than 40 target-date fund (TDF) series represented in the Index, returns ranged as high as 19.24% for the trailing 12-month period to as low as 14.77%.   

The longer the date of the fund, the higher the median return in the third quarter: The median 2050 fund returned 5.98% for the quarter, while the median Retirement Income vintage managed a 3.35% return. Variation in returns was greatest for the target-date vintage just approaching retirement —2015 Funds. Callan said this points to the differences in ways target-date managers handle the glide path asset-allocation rolldown during the crucial period just leading into retirement.