Morningstar has issued its 2015 Target-Date Fund Landscape Report, which shows that asset-weighted average investor returns of target-date funds are 1.1 percentage points higher than the funds’ average total returns. This finding suggests that, on average, target-date fund investors are using the funds effectively, according to the research firm.

“The positive gap between investor returns and total returns in target-date funds indicates those investors are capturing all of the funds’ total return, and more, thanks to the timing of their purchases and sales,” explained Janet Yang, Morningstar’s director of multi-asset class manager research, in a statement. “Target-date funds are default investments for many retirement plans, and the steady inflows during the strong market environment in recent years likely explains this positive gap.”

The fund-research group also says flows into target-date funds (TDFs) accounted for more than 30% of the overall net new inflows to their respective fund firms in 2014, on average. Overall, target-date funds represented about 8% of these firms’ total mutual fund assets as of year-end 2014.

TDF assets topped the $700-billion mark last year, when investors added $50 billion in net new assets into these funds. Organic growth, though, was 8% vs. 10.5% in 2013. Vanguard pushed Fidelity out of the top spot and became the industry’s largest target-date mutual fund provider in July 2014. Along with T. Rowe Price, these three fund group account for 71% of TDF industry assets.

Index-based target-date series slightly outpaced their actively managed peers in 2014, thanks to lower fees and above-average exposure to well-performing asset classes, such as U.S. equities, according to Morningstar. The target-date industry’s asset-weighted expense ratio dropped to 0.78% in 2014 from 0.84% in 2013.

Longer-dated funds aimed at younger investors—which tend to have higher equity stakes—topped shorter-dated funds meant for investors closer to retirement. The typical 2050 target-date fund, with an average equity allocation of almost 90%, gained roughly 1 percentage point more than the average 2015 TDF, which had close to a 40% equity stake, in 2014.

Just three TDF managers invest over $1 million of their personal assets in the fund series they manage, and more than half of the industry’s target-date series are run by managers who have made no investments in the TDFs they oversee.