SOURCE: BrightScope

BrightScope

September 29, 2015 08:00 ET

BrightScope Reveals the Top 10 Target Date Series

Vanguard Group and T.Rowe Price Top the List With Most in 401k Assets; Four Fidelity Series Make the List

SAN DIEGO, CA--(Marketwired - Sep 29, 2015) - BrightScope (www.brightscope.com), a leading provider of independent financial information and investment research, today announced the Top 10 Target Date Series (TDS), ranked by total 401K assets. Target date series' are a group of target date funds -- there is an average of 12 funds in each series on this list -- designed to simplify asset management for investors and plan sponsors by automatically shifting allocation to help participants meet retirement goals.

"We've seen strong growth in the target date fund space driven by lower fees, a strong equity market and a shift in distribution model," said Brooks Herman, Head of Data & Research at BrightScope. "Four years ago, BrightScope predicted that Target Date Assets would top $2 trillion by 2020, and we stand by that prediction today."

Notable Target Date Fund trends:

  • The distribution channel is getting more competitive: Based on a sample of activity in 10,000 401k plans from 2010-2013, BrightScope observed a decrease in proprietary target date assets from 57% (2010) to 55% (2011) to 52% (2012) to 50% (2013). Plan sponsors are looking off-platform for the best target date funds for their employees.
  • Fees continue to fall: In examining fees for the lowest cost share class for each target date series in 2014, the average fee was .65 percent, down from .67 in 2013 and down almost 10 percent overall since 2011.
  • Assets are increasing: As of February 2015, Target Date Fund assets jumped to more than $700 billion in Investment Act of 1940 funds, an increase of 12 percent over last year's figures. When collective investment trusts and pooled separate accounts are added, BrightScope estimates total target date assets to be closer to $1.1 trillion, a 22 percent increase over last year's estimate and a 280 percent increase over the past five years.

Businesses and Target Date Funds:

  • General Mills 401k Plan began using target date funds for the first time, giving Vanguard a $625 million mandate win in 2013
  • SunTrust Banks, Inc. 401k plan moved from T Rowe Price target date funds to Vanguard in 2013
  • ADP TotalSource Retirement Savings Plan moved from MassMutual to Voya Target Date Funds in 2013

BrightScope's Top 10 Target Date Series:

Provider Name - Target Date Series Name - Total 401k Assets

1. Vanguard Group -Target Retirement - $78.1B
2. T. Rowe Price - Retirement - $59.4B
3. Fidelity - Freedom K - $45B
4. Fidelity - Freedom - $39.7B
5. JPMorgan - SmartRetirement - $11.3B
6. Wells Fargo - Advantage Dow Jones Target - $10.3B
7. Fidelity - Advisor Freedom - $10B
8. Fidelity - Freedom Index - $4.7B
9. Principal Financial Group - LifeTime - $4.5B
10. American Century Investments - One Choice - $4B

*Note: these rankings are accurate as of September 24, 2015
**
Fidelity Freedom Funds are separated in two funds: Freedom funds and Freedom K funds.

BrightScope obtains its data directly from publicly available sources, including regulatory filings from the Securities and Exchange Commission. Financial advisors can supplement these primary sources by claiming their profile. By analyzing and interpreting this data, BrightScope provides unparalleled insight into the financial management industry.

About BrightScope
BrightScope is a financial information company that brings transparency to the financial services marketplace through independent research and analysis. Delivered through intuitive online tools, BrightScope data drives better decision-making for individual investors, corporate plan sponsors, asset managers, broker-dealers, and financial advisors. Information on more than 700,000 financial advisors and nearly 33,000 active advisory firms, as well as ratings for nearly 50,000 retirement plans and analysis on over 30,000 fund share classes, are available for free at www.brightscope.com.