TDF assets grew 5 percent in 1QNews added by Benefits Pro on May 22, 2014

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By Lisa Barron

Flows into target-date funds were strong in the first quarter of this year, up 5 percent or $30 billion, according to a report by Ibbotson.

That outpaces target-risk funds, which lost$1.5 billion from January through March.

Total assets in TDFs amounted to more than $648 at the end of March, representing an increase of 22 percent from a year ago, the report said.

Performance, however, was not as solid as cash flows. For the quarter, the average TDF of the 463 funds Ibbotson looked at gained 1.5 percent, slightly less than the S&P’s 1.8 percent gains.

Ibbotson attributed the discrepancy to different international equity exposure and exposure to real estate and commodities. Funds with less international exposure and more real estate and commodities exposure did better.

For the 12 months ending in March, however, TDFs performed well, with the average fund gaining 12.1 percent on the strength of domestic equity markets.

Ibbotson also found that Vanguard, T. Rowe Price and JP Morgan had 60 percent of the gains, although BlackRock’s iShares, Allianz and JP Morgan led in growth by percentage of assets.

Fidelity, Vanguard and T. Rowe still have 73 percent of TDF market share, but that number is dropping, the report found.

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