Casey Quirk Predicts Target Date Retirement Fund Growth

October 3, 2011 ( - Target date retirement funds (TDRFs) will represent nearly half of the total $7.7 trillion in U.S. defined contribution assets by 2020, according to a forecast from Casey, Quick & Associates.  

The forecast also predicts low cost passive funds along with innovative, customized active accounts, will be the fastest growing strategies adopted by investors, squeezing mutual funds, which are now dominant.

By 2020, assets invested in passive strategies and innovative active portfolios will capture an increasing share of the overall target date market by 2020, approximately 74% vs. almost 52% in 2010, according to a Casey Quirk press release. Some innovations Casey Quirk expects will capture market share within target date structures this decade are tactical asset allocation, hedge fund-like strategies, mixing active and passive and proprietary and non-proprietary strategies, and retirement income. 

“As target date retirement funds mature, the landscape will favor innovators providing strategies common in the defined benefit world, and low cost passive providers,” said Casey Quirk Partner David Bauer, in the announcement. “There is tremendous opportunity but managers must thoroughly examine the market complexities before jumping in.” 

Assets in TDRFs totaled approximately $550 billion, or 12.5% of the overall $4.4 trillion U.S. defined contribution market in 2010. By 2020, TDRFs will contain approximately $3.7 trillion, or 48% of the overall total.