The Markets April 25, 2008

Asset Allocated Funds Grow As Retirement Assets Increase

Total U.S. retirement assets climbed to $17.8 trillion as of September 30, 2007, up from $17.5 trillion on June 30, 2007, according to a quarterly data series from the Investment Company Institute (ICI).
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The ICI data show retirement savings account for almost 40% of all household financial assets in the United States. IRAs held $4.8 trillion of retirement assets at the end of the third quarter of 2007, while employer-sponsored defined contribution plans held $4.5 trillion – of which $3.1 trillion was held in 401(k) plans, ICI said.

Lifecycle funds, or target-date funds, managed $168 billion of retirement assets at the end of the third quarter of 2007, compared to $153 billion at the end of the second quarter. Almost 90% of assets held in lifecycle funds are from retirement accounts, ICI found.

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In addition, lifestyle funds, or target-risk funds, managed $234 billion as of September 30, up from $221 billion on June 30. Almost half of assets held in lifestyle funds are from retirement accounts.

The ICI data also showed mutual funds managed 47% of IRA assets and managed $2.4 trillion in assets in 401(k), 403(b), and other defined contribution plans at the end of the third quarter of 2007. Mutual funds managed 53% of defined contribution plan assets.

Over $1.7 trillion in defined contribution plan assets were invested in equities as of September 30, 2007, while $365 billion was invested in hybrid funds, $176 billion in bond funds, and $126 billion in money market funds.

Complete ICI data can be obtained here.

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