Investing October 3, 2008

2010 Funds Have Rough Quarter

October 3, 2008 (PLANSPONSOR.com) - It's been a rough month for the markets, and a challenging quarter for 401(k) plan investments.
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Consequently, it seems likely that a growing number of 401(k) plan participants – and plan sponsors – will be curious to know how the target-date fund offerings on their menus have fared.

Varied Allocations

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Asset allocations in these target date funds vary widely, of course, mirroring variances in the glide path philosophies that underpin them (see Glide Paths – Getting From Here to There ) – and those variances are most evident in the target date fund closest to the target date.     That’s also the place/time when workers are potentially most vulnerable to the fluctuations in the market, of course.

According to Target Date Analytics (TDA), the “raw” average year-to-date performance of the four largest 2010 funds (the ones for folks closest to retirement) at September 30:   -13.73%.  

The following are returns provided by TDA based on Morningstar data.   The four funds listed hold about 90% of all the assets invested in 2010 funds, according to TDA. Their performance for the periods indicated is presented alongside the PLANSPONSOR On-Target Indexes, or OTI, a new industry standard for target-date funds.

  Fund   & ticker

align=”center”>  4-wks

align=”center”>  3 months 

align=”center”>  YTD

align=”center”>  12 months

align=”center”>   3 yr 

  Fidelity 2010 (FFFCX) 

align=”right”>  -6.92%

align=”right”> -8.62%

align=”right”> -12.95%

align=”right”> -13.60%

align=”right”>   1.46%

  T. Rowe 2010 (TRRAX) 

align=”right”>  -7.56%

align=”right”>   -8.11%

align=”right”>  -14.00%

align=”right”> -14.93%

align=”right”> 1.95%

  Vanguard 2010 (VTENX) 

align=”right”>  -6.06%

align=”right”> -6.32%

align=”right”> -11.23%

align=”right”>-11.30%

align=”right”> N/A

  Principal 2010 (PTTIX)  

align=”right”> -8.23%

align=”right”> -10.38%

align=”right”> -16.72%

align=”right”> -18.68%

align=”right”> -0.65%

      
  PLANSPONSOR OTI 2010  

align=”right”> -2.90%

align=”right”> -3.12%

align=”right”> -0.81%

align=”right”> 1.69%

align=”right”> 5.14%

You can find out more about the PLANSPONSOR On-Target Indexes at http://www.tdbench.com/Services.html

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