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Assets in TRFs Outpace TDFs

TDFs are all the rage these days. But did you know that target risk funds (TRFs) have more assets? According to a Q1 2014 report by Ibbotson, a Morningstar subsidiary, TRFs have $722 billion of AUM. That compares to $618 billion for TDFs. Ibbotson tracks 548 funds managed by 83 companies. Outflows were negative, however, at $1.5 billion; with more conservative funds losing the most assets. Overall, TRFs gained 1.4% in Q1, compared with 1.8% for the S&P 500.

Gains in Q1 were led by funds that had the greatest concentration of REITs, commodities and longer duration bonds. Funds with less than 45% of equities saw outflows of $2.5 billion. The largest TRF manager by far is John Hancock, which enjoys an 11% market share, followed by Columbia, PacLife and MetLife. Of all TRFs, 61% are annuities.

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