03 April 2018
Mercer's research experts review over 50 target date fund strategies. Get the latest insights and findings during 2017 in our annual publication.
- Total target date fund (TDF) provider assets increased from $1.3 trillion in Q4 2016 to $1.7 trillion in Q4 2017.
- Largest provider now has a 36% market share and almost 2.5 times its nearest competitor.
- While AUM growth is strong, there’s continued evidence that assets still roll out of TDFs around retirement, and some evidence this could be happening earlier than retirement.
- In general, TDFS still have a strong home (US) equity bias.
- Fee compression continues, but focusing on fees alone may not be in participants’ best interests. The difference in performance of TDFs are more significant than the difference in fees.
- Given these differences, Plan Sponsors should ensure they are continually reviewing their TDFs.