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Target Date Fund Assets Still Climbing

Target maturity funds picked up more than $13 billion in the fourth quarter of 2012, bringing the industry’s total assets to some $485 billion, a 29% increase from a year ago, according to data from Ibbotson Associates.

The “big three” of Vanguard, Fidelity, and T. Rowe Price continued to garner the majority of flows, capturing 69% of net flows during the quarter, according to the latest Ibbotson Target Maturity Report. Other target maturity fund providers that saw large inflows this quarter include Wells Fargo Advantage, John Hancock, TIAA-CREF, J.P. Morgan, and American Funds.

During the period, roughly 75% of target maturity providers experienced positive flows into their funds. However, AllianceBernstein, Principal Funds, and ING Retirement Funds experienced the largest outflows in the quarter, totaling $360 million.

“Beginning the year with more than $375 billion, AUM at the end of 2012 was at an all-time high, just shy of $485 billion,” wrote authors Jeremy Stempien, Director, Investments and Cindy Galiano, Director, Investments at Ibbotson Associates.

“Looking back since the beginning of 2000, the average annual growth of target maturity fund assets has been 43% year-over-year. The growth rate for 2012 (year-over-year) was 29% which is significantly less than the average since 2000. This 29% growth rate is, though, in line with the average over the past three years of 25%.”