TDFs continue to break records, with an estimated $518 billion in AUM, according to a report from Morningstar’s Ibbotson. The $23 billion in Q1 2013 was a 44% increase from the previous record of $16 billion set in Q1 2011, with assets rising 21% year over year. Only 25% of the funds beat their Morningstar index, however, with the average return lagging the S&P 500.
The top three TDF providers — Fidelity, Vanguard and T Rowe — led the way, with a whopping 76% market share. Following were JP Morgan, American Century, American Funds, Hancock and TIAA-CREF, each with more than $650 million in flows for the quarter. Only ING, DWS and AllianceBernstein had net outflows.
Overall, the top five TDF providers include Fidelity, Vanguard, T Rowe, American Funds and Wells Fargo — all bundled providers. For DCIOs that don’t have a viable TDF strategy or don’t own a major record keeper with influence over the QDIA selection, the assets available are dwindling quickly.
