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Retirement Planning > Retirement Investing

Target-date fund performances hit highs and lows in 2008

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Those who invested in target-date mutual funds might have come out of 2008 either unscathed or forced to delay retirement, according to the Associated Press and the latest performance tabulations. Results varied widely, and depending on which 2010 fund investors were in, their loss may have been as small as 3.6 percent, or as big as 41 percent, reports the AP.

“Investors in target-date funds weighted more heavily toward stocks than less-volatile bonds must ask if they’ve got the stomach to stick it out after being burned last year. And they need to be aware that target-date funds are complex and merit scrutiny, even though they can appear on paper to be the investing equivalent of autopilot,” writes Mark Jewell for the Associated Press.

Volatile performances are forcing employers to grapple with defaulting plan participants into an appropriate target-date fund.

“Since target-date funds invest in a slew of asset classes and have a moving asset allocation, it hasn’t been clear how companies should benchmark their performance. As a result, many companies were just measuring the performance of the underlying funds that make up their target-date funds against their appropriate benchmarks. But now, with so many target-date fund indexes in development, plan sponsors are wondering how to choose which one is best for them,” writes Jessica Marquez for Workforce Management.

Below are target-date mutual funds with 2010 retirement targets that posted the smallest and largest losses in 2008, and 2008 losses of the largest 2010 funds, ranked by assets (from the Associated Press and Morningstar):

Fund Name Ticker 2008 loss
DWS Target 2010 KRFAX -3.6 percent
NestEgg Dow Jones 2010 NECSX -9.1 percent
Wells Fargo Advantage DJ 2010 STNRX -11.2 percent
MFS Lifetime 2010 MFSAX -14.3 percent
Barclays Global Investors LP 2010 STLBX -17 percent

Fund Name Ticker 2008 loss
Oppenheimer Transition 2010 OTTAX -41.3 percent
AllianceBernstein 2010 Retirement Strategy LTDAX -32.9 percent
Goldman Sachs Retirement Strategies 2010 GRCAX -30.8 percent
Principal LifeTime 2010 Inst PTTIX -30.3 percent
JHancock2 Lifecycle 2010 JLAAX -29.8 percent

Fund Name Ticker 2008 loss
Fidelity Freedom 2010 FFFCX -25.3 percent
T. Rowe Price Retirement 2010 TRRAX -26.7 percent
Vanguard Target Retirement 2010 VTENX -20.7 percent
Principal LifeTime 2010 Inst PTTIX -30.3 percent
Fidelity Advisor Freedom 2010 A FACFX -26.6 percent


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