Last year was not good to target date funds, especially those sponsored by Vanguard. Overall, target date funds experienced their first year of net outflows since at least 1994, when Morningstar began to track the data.
Vanguard’s Target Retirement series had its biggest annual drop in net flows, collecting less than $3 billion, or under one-tenth of its $31 billion of net flows in 2019.
Fidelity’s Freedom Index Series, though, posted the biggest inflows among the top 10 target date mutual fund series, collecting $15.6 billion, or 25% more than in 2019, according to analysis by Morningstar’s Jason Kephart.
These inflows catapulted the Fidelity series to the top spot for flows, displacing Vanguard’s series for the first time since 2008.
The Fidelity funds were one of only two series of TDFs that took in more than $1 billion in 2020 and experienced higher net flows than the prior year.
The other series was JPMorgan SmartRetirement Blend, which collected $4.1 billion and posted a 157% increase in net flows.