|
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
Way back in 1994, the first target date funds were introduced. Back then, a target date of say, 2010, seemed so far away. But, here we are now just 14 months from 2010—the first major target date.
A large cohort of investors are scheduled to hit the shores of retirement in 2010. Basically, it’s the folks that were born in the mid 1940’s. You’ll recall that the baby boom is defined as the 18-year period from 1946 to 1964. So, a lot of the money invested in 2010 funds belongs to the leading edge baby boomers.
As of late 2008 there was about $26 billion invested in 2010 target date funds. As a point of reference, a total of $192 billion was invested in all target date funds as of late 2008 (that is the asset total in retail target date funds and doesn’t account for the assets in collective trust target date products). Target date funds linked to the year 2020 have the single largest asset base, at around $42 billion.
The distribution of assets among the 32 2010 funds in existence as of 10/31/2008 are hardly proportional. As shown below, the 6 largest 2010 funds possess about 92% of all 2010 assets.
Six Largest 2010 Target Date Funds
(as of 10/31/08) |
Total Net Assets
($ Million) |
Percentage of All 2010 Target Date Fund Assets
(Largest 6 funds have 92% of all 2010 assets) |
Fidelity Freedom 2010 |
10,574 |
50% |
T. Rowe Price Retirement 2010 |
4,416 |
21% |
Vanguard Target Retirement 2010 |
2,252 |
11% |
Principal L/T 2010 |
1,381 |
6% |
American Funds Target Date Rtmt 2010 |
450 |
2% |
Wells Fargo DJ 2010 |
411 |
2% |
Data Source: Morningstar and Target Date Analytics (www.TDBench.com)
Display article as PDF for printing.
Would you like to send this article to a friend?
Remember, if you have a question or comment, send it to
. |
