Despite a 3% improvement in fourth quarter results, target date funds posted a decline of 0.86% for 2015 — their first such yearly loss since 2008, according to Callan Associates, the developer of the Callan Target Date Index.

“After the carnage of 2008, when the median target date fund lost 26.41%, target date fund managers generally decreased their glide path allocations to equities and improved their overall diversification,” said Lori Lucas, head of Callan’s Defined Contribution practice, in a statement.

The range of performance within the category appears to be narrowing, the investment consulting firm says.

In 2008, the range between the best- and worst-performing target date funds was more than 22 percentage points. The range differed by fewer than two percentage points in 2015, according to Callan.

In the fourth quarter, target date funds benefited from domestic equity exposure; the S&P 500 gained 7% in the period. Bonds, however, dropped roughly 0.6% as measured by the Barclays U.S. Aggregate Index.

According to Callan, its target date index includes 44 target date fund series, including both mutual funds and collective trusts.

Target date funds rebounded nicely in the final quarter of 2015 after a rough middle of the year, returning 3.01% as measured by the Callan Target Date Index. Unfortunately, the positive fourth quarter performance was not enough to pull TDFs out of negative territory for the year.

During the fourth quarter, the median target date fund underperformed the Callan Target Date Index by 18 basis points; it fell short by seven basis points for the full-year 2015. On a trailing five-year basis, the median target date manager has underperformed the benchmark by 35 basis points.

Long-dated funds outperformed near-dated funds in the fourth quarter, Callan says. The median 2050 target date fund, for instance, gained 4.3%, while the median 2010 target date fund gained about 1.8%.

For 2015, greater equity exposure “proved a liability,” the fund consultancy states, with the median long-dated target date fund losing -1.3%; the median near-dated target date fund returned 0.6%.

The median target date fund’s expense ratio is 0.60%, with ratios ranging as high as 0.82% and as low as 0.16%, according to Callan. “Much of the difference between the high and the low expense ratios is driven by active versus passive implementation of target date glide paths,” it explained in a statement.

— Check out Target Date Funds Boost Retirement Planners’ Confidence: Poll on ThinkAdvisor.