Between now and 2018, target-date funds as a percentage of 401(k) contributions are predicted to rise to 35 percent.

In recent years, target-date funds have become a preferred investment option of 401(k)s and other defined contribution plans. In January of 2013, the Employee Benefits Research Institute (EBRI) reported that nearly three-quarters of 401(k) plans include target date funds in their investment line-up at year-end 2011.

That share is likely to grow, judging by new research from Cerulli Associates. The Boston-based firm projects that target-date funds as a percentage of 401(k) plan assets will rise to $1.7 trillion by 2018, capturing a whopping 63.4 percent of assets — nearly two-thirds of the market pie. This compares with an estimated $762 billion this year.

Over the same period, target-date contributions as a percentage of 401(k) contributions are predicted to rise 35 percent from less than one-fifth of DC plan contributions currently.

“Plan sponsors, consultants and advisors have increased focus on target-date decisions as plan assets allocated to target-date funds have increased, says Cerulli Director Bing Waldert in a prepared statement. “The leaders among target-date providers have not changed during the past three years, but below the top tier, some asset managers have demonstrated the ability to grow their target-date assets.

“Existing target-date managers remaining in the market must demonstrate risk management expertise,” he adds. “The majority of target-date managers believe that asset allocation and risk management capability will be the primary drivers of future target-date growth over the next three years.”

Cerulli’s forecast for target-date funds appears in the first quarter 2014 report of “The Cerulli Edge: Retirement Edition.” In addition to target-date funds, the report examines qualified default investment alternatives (QDIAs), investment vehicles used by fund managers for retirement plan contributions in the absence of direction from plan participants.

The report also features “quantitative insights” respecting defined benefit plans, defined contributions, annuities and insurance, retirement income and individual retirement accounts (IRAs).