Let's take a look at how the TDF industry has grown since 1994.
By Clayton Fresk on November 1, 2019
In a previous post, we talked about the advent of the Target Date Fund (TDF) back in 1994. Now we’ll take a quick look at how the industry has grown since then.
This first chart shows the number of TDF series outstanding by year:
By our calculations, 220 different TDF series have been launched since 1994. However, after the bear market in 2008, we saw some of these series begin to close. Since 2008, there have been 52 TDF series that have shuttered, leaving 168 different series existing today.
Next, we’ll look at the growth of Assets Under Management (AUM) in the TDF industry, starting in 2000:
We can see the TDF universe has grown from about $9 billion AUM in 2000 to over $2.2 trillion AUM as of 2Q19. This is a growth of nearly 2,500%. These numbers do not include the custom target date (cTDF) universe which, as of the end of 2017, accounted for an additional $430 billion according to research undertaken by the Defined Contribution Institutional Investment Association (DCIIA).1
Obviously, the TDF market has blossomed over the past years both in the number of series offered and AUM growth. We’ll continue to delve into this market deeper and provide further education on the current state of affairs and our thoughts on what’s to come.
Author: Clayton FreskClayton Fresk joined Stadion Money Management in 2009 and currently serves as Portfolio Manager of Stadion’s Retirement investment strategies, which comprises oversight of Stadion’s managed account, target-date, and risk-based strategies. He provides thought leadership for Stadion’s participant level, customized retirement solutions, in order to ensure that its glide path technology and asset allocation are able to support all intermediaries in the defined contribution ecosystem. Clayton holds the Chartered Financial Analyst designation and is a member of the CFA Institute and the CFA Society of Minnesota. He also received an MBA degree and a Bachelor's degree in Finance & Marketing from the University of Minnesota.
There is no guarantee of the future performance of any Stadion account. Material has been derived from sources considered to be reliable, but the accuracy and completeness cannot be guaranteed. Results based on available universe of Target Date Fund Series, which includes registered mutual funds, and non-registered collective investment funds and insurance accounts. Collective investment funds and insurance accounts are only available for investment to qualified retirement plan assets such as 401(k) plans.
The commentary, analysis and opinions expressed are those of Stadion’s investment Team. The commentary, analysis and opinions referenced are as of the date of publication and are subject to change without notice. This material is for informational purposes only and should not be considered investment advice. This is not a recommendation to buy or sell a particular security. The investment strategy or strategies discussed may not be suitable for all investors.
Investors must make their own decisions based on their specific investment objectives and financial circumstances. Stadion Money Management, LLC (“Stadion”) is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about Stadion’s investment advisory services can be found in its Form ADV Part 2, which is available upon request.
©2019 Stadion Money Management, LLC. All rights reserved. Stadion and the Stadion S are registered service marks of Stadion Money Management, LLC. StoryLine is a service mark of Stadion Money Management, LLC.