Asset Allocation Funds See Q2 Losses

However, the funds earned 11.9% for the 12-month period through June, driven by the strong performance of U.S. equities. Target-date funds with exposure to commodities, real estate investment trusts (REITs), and emerging market equities over the past year underperformed.

Following record fund flows of $23 billion into target maturity funds in the first quarter, second-quarter flows of $12 billion were back to normal levels. As of the end of the second quarter, total assets in target-date funds were an estimated $545 billion—a 27% increase from a year ago.

Target-risk funds lost 0.5% on average for the second quarter but gained 10.9% over the past 12 months, according to the Ibbotson Quarterly Target-Risk Fund Report. Flows into target risk funds were healthy with more than $3.7 billion flowing into the category during the quarter. Moderate funds gathered a majority of the flows.

The target-date fund report is here.  

The target-risk fund report is here.