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Target Maturity Funds Have Tough Second Quarter

(Cont...)

The quarter’s tumultuous performance didn’t have much of an effect on flows into target maturity funds. Flows held up with a very strong $13.9 billion inflow. Fidelity, Vanguard and T. Rowe Price continued to garner the majority of flows, capturing 73% of net flows. Other target maturity fund providers that saw large inflows were J.P. Morgan, John Hancock, TIAA-CREF and BlackRock. There was some contraction in the industry this quarter as well, with three fund providers deciding to close their target maturity series (Oppenheimer, Goldman Sachs and Columbia).

Despite the nearly 3% loss on average, target maturity funds continue to see total assets climb to all-time highs. As of the end of Q2, total assets in target maturity funds were nearly $431.5 billion, a slight 0.6% increase from a quarter ago. Fidelity, Vanguard and T. Rowe Price hold around 75% of total assets, but other fund families continue to make headway in this space. PIMCO again saw a significant increase with assets in its series rising by 12.8% to more than $298 million. Although PIMCO’s total assets are a small percentage of the industry’s total, the series has more than tripled over the past three quarters. Other target maturity fund providers that saw significant increases during the period include BlackRock, Invesco, and JP Morgan with increases of 9.3%, 8.0%, and 7.0%, respectively.

Ibbotson Associates, an independent provider of asset-allocation, manager selection and portfolio construction services, is part of the Morningstar Investment Management division of Morningstar Inc.

The Ibbotson Target Maturity Report is available here

Jill Cornfield 

PLANSPONSOR staff
editors@plansponsor.com

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