Competition for Target Date Funds is Heating Up

Fact-Based Trends from Cogent Reports™    

Competition For Target Date Funds is Heating Up | Cogent Reports

Competition for target date funds in the DC market is showing no sign of abating. DC Specialists (producers managing $50M+ in DC AUM) are looking outside the two dominant target date fund providers—American Funds and Vanguard.  While American Funds and Vanguard continue to square off for the greatest proportion of target-date-fund dollars among this elite plan advisor segment (34% versus 33%), three investment managers are gaining ground. One in five DC specialists is likely to endorse Fidelity (23%), BlackRock (21%) and T. Rowe Price (21%) for sponsor consideration, compared with a respective 15%, 17% and 14% reported one year ago.

Target Date Funds Provider Recommended Most Often | Cogent Reports

Among this elite group of producers, target date fund provider selection primarily hinges on fee structure, followed by performance, risk-adjusted returns and risk management/downside protection. Diversification across asset classes and glidepath also play an influential role.

Top Selection Criteria for Target Date Fund Providers | Cogent Reports

This increased competition is a welcome sign for challenger brands, as DC specialists often serve as harbingers of trends to come. The fact that these elite advisors are expanding their recommendation set signals an opportunity for asset managers to grow their target-date-fund presence among other DC advisor segments.

 

For more information on DC specialists and all retirement plan advisors, review an overview of the Retirement Plan Advisor Trend™ report.

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Sonia Sharigian

About Sonia Sharigian

Sonia is a product director for Cogent Reports with more than 10 years of experience in journalism, marketing and research. She has managed numerous qualitative and quantitative studies in financial services industry research, as well as the hospitality, consumer packaged goods and retail sectors. Prior to Market Strategies, Sonia served as a community manager for Communispace Corporation, where she helped major brands generate game-changing insights via online communities. She also worked as a public relations specialist for Putnam Investments and as a staff reporter for Community Newspaper Company. Sonia earned an MBA from Boston University School of Management and a bachelor’s degree in communications from Simmons College. She is an ardent Patriots fan who recently became hooked on sprint triathlons.

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