From the March 2009 issue of Research Magazine • Subscribe!

T. Rowe Grows Target-Date Funds

T. Rowe Price Group says target-date retirement investment portfolios continue to be a significant source of assets under management for T. Rowe.

During the 2008 fourth quarter, net inflows of $0.7 billion originated in target-date retirement portfolios. Assets in target-date investment portfolios were $26.0 billion at December 31, 2008, and now account for 9.4 percent of the firm's AUM and 15.3 percent of its mutual fund assets.

The group's results for the full-year 2008 included net revenues of $2.1 billion, net income of $491 million, and diluted earnings per share of $1.82, down $.58 per share from 2007. Assets under management stand at about $277 billion.

This is down 31 percent from the beginning of 2008 as cash inflows from investors of $17.1 billion have been more than offset by market valuation declines, net of income of $140.3 billion, and $.5 billion of fund distributions not reinvested.

Some 78 percent of T. Rowe Price funds surpass their comparable Lipper averages on a total-return basis for the five-year period ended December 31, 2008, at least 67 percent outperforming the average for the three- and 10-year periods, and 54 percent outperforming for the one-year period, the company says.

Net cash outflows to investors in the fourth quarter of 2008 were less than 1 percent of assets under management, or $2.4 billion. Lower market valuations, net of income and fund distributions not reinvested, reduced assets under management by $66.3 billion in the fourth quarter of 2008.

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