TDF Assets Through Q3 Dip Slightly, Still Outpacing ‘22

Assets in target-date funds among the top ten providers through the third quarter of 2023 ended down from Q2 but are still on pace to exceed those of a relatively down year in 2022, according to the latest data from ISS Market Intelligence’s Simfund.

Total investor assets in TDF strategies among the top ten managers landed at $1.58 trillion through the first three quarters of the year, dropping below total at the end of Q2, $1.63 trillion, according to data provided by Simfund, which, like PLANADVISER, is owned by Institutional Shareholder Services Inc. Both figures are greater than 2022’s $1.46 trillion in total assets in TDF investments.

The slight decline comes amid market volatility and weaker traffic moving into TDFs. When taking into account both inflows and outflows, total assets going into TDFs were $8.17 billion in Q3, compared with $10.84 billion in Q2, according to the data.

Those inflows were off a high for the year of $17.5 billion in Q1, which had followed a dismal total outflow picture for TDFs in Q4 2022 of negative $7 billion.

The leader of those top 10 TDF inflows was American Funds, owned by Capital Group, for the second consecutive quarter at $3.97 billion. BlackRock Inc. had the second most inflows at $2.34 billion, and the Vanguard Group was third at $2.13 billion, according to Simfund’s data.

TDF managers hit most by outflows in the quarter were J.P. Morgan Funds at negative $2.2 billion, T. Rowe Price at a decline of $894 million and American Century at $253 million in outflows.

When tracking just inflows into TDFs by manager, BlackRock overtook Vanguard for the second strongest investments as compared with last quarter. Meanwhile, Fidelity Investments slipped from third to fourth for net new flows, and TIAA overtook State Street Global.

2023 is on pace to mark another year-over-year increase for TDF assets, the most popular investment vehicle within workplace retirement plans.

If the year does indeed land above 2022’s $1.46 trillion in assets, the total assets in the investment strategy will have grown year-over-year in every 12-month period except for three going back to 1990, according to Simfund.