Mercer | Target Date Funds Highlights and Trends

Target Date Funds Highlights and Trends - Mercer US

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Target Date Funds Highlights and Trends
Calendar03 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.
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