A new research study projects that custom target-date strategies will account for 22% of 401(k) target-date assets by 2016.
Cerulli Associates, Boston, released this finding in “The Cerulli Report: State of Large and Mega Defined Contribution Plans: Investment Innovation and the Plan Sponsor Perspective.”
The Cerulli report pegs the value of custom target-date fund assets in defined contribution plans at $218 billion in 2016, up 370% from the $46.4 billion posted in 2011.
The forecast contrasts markedly with declining growth rates recorded since the 2007-2008 period, when asset values dipped 9.2%. During the 2008-2009, 2009-2010 and 2010-2011 periods, target date mutual fund assets in DC plans grew by 58.8%, 29.6% and 10.2%, respectively, the report notes.
The 2012-2016 projection is, however, in line with the triple-digit, aggregate growth rate recorded between 2002 and 2007. During this period, target date mutual fund assets in DC plans grew by an aggregate 321%.