According to the “Target Maturity Report,’ the average target-maturity fund declined 7.4% during the first quarter, while the S&P 500 Index lost 11%. On an annual basis, the average target-maturity fund lost 31.7%, while the S&P 500 Index lost 38.1%

Ibbotson noted that over the years as the number of fund families increased dramatically, equity exposure increased. For investors of equivalent ages above 39 years old, the average 2009 glide path has 4% more equity exposure than the average 2004 path, the report said.

According to Ibbotson, the propensity of investors to focus on absolute return rather than risk-adjusted returns led some fund manufacturers to adopt more aggressive glide paths, but the firm advises investors, advisers, and plan sponsors to consider their unique risk preferences and risk capacity when establishing or selecting an appropriate glide path.

Beginning with this quarterly report, Ibbotson included performance information about the recently released Morningstar Lifetime Allocation Indexes as an aid in benchmarking.

Quarterly Target-Maturity Fund Performance (Q1 2009)

Date Max Average Min # of Funds
Income 0.9% – 3.3% -10.5% 24
2000 -1.9% -3.3% -4.7% 2
2005 -3.4% -4.6% -5.7% 7
2010 -0.5% -4.7% -7.5% 32
2015 -1.7% -6.1% -12.2% 30
2020 -2.7% -6.7% -9.8% 36
2025 -4.3% -8.0% -11.6% 27
2030 -4.4% -8.4% -11.2% 36
2035 -5.1% -9.2% -11.9% 26
2040 -4.6% -9.3% -11.9% 35
2045 -5.8% -9.7% -12.9% 22
2050 -3.8% -9.4% -12.3% 24
2055 -6.7% -8.9% -10.1% 3
Total 304

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