TDF Assets Continue Climb Through July

Target-date funds, that time-tested method for retirement saving accumulation, are showing no signs of slowing down so far this year: Total assets for the savings vehicles hit a record $1.856 trillion among top providers tracked by data provider Simfund through the end of July.

TDF assets grew steadily each month from April through July among the largest 25 providers, as driven primarily by market growth and inflows from passively invested vehicles, according to Simfund. The market data provider, like PLANADVISER, is owned by ISS STOXX.

The top providers, as ranked by only TDF asset flow through July by Simfund, were as below. Capital Group, the leader for the time period as seen below, noted a larger figure when taking into account the full family of its TDFs of $10.1 billion.

Source: ISS MI Simfund

When looking at total TDF assets by firm overall, the leaders are: Vanguard, Fidelity Investments, Capital Group’s American Funds and T. Rowe Price, according to Simfund.

Michael Cagnina, a senior vice president and managing director for SEI Investment Co.’s institutional business, has also seen continued growth in the total TDF space, according to a defined-contribution-investment-only assessment sent via email. That includes a mix of passive and active strategies, and “an increasing number of plan sponsors are adopting all-passive target-date series, while others integrate active management selectively,” he says.

At SEI, Cagnina notes, the firm takes a blended approach with plan sponsor clients, using active management in “less efficient market segments” and in areas where indices are difficult to replicate. In all cases, plan fiduciaries still must balance the cost for reward of strategies, he said.

“In this context, governance and cost-efficiency are key considerations, as plan sponsors must navigate the trade-offs between active management’s potential for outperformance and the typically lower fees associated with passive strategies,” says Cagnina.

Simfund’s dataset, which dates back to 1990, hit its previous highest TDF asset peak in 2021 at $1.765 trillion.

Correction: This story originally showed total flows for firms that included open-end funds, which changed the top ten firms listed and outcomes. This version now corrects to only consider TDF flows. We apologize for this error.