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Data and Research July 20, 2023
American Funds Led Target-Date Funds Inflows in Q2
While American Funds experienced inflows several firms saw net outflows from their funds in the quarter, according to Simfund.
Reported by Alex Ortolani
Capital Group’s target-date fund suite experienced the strongest inflows the second quarter, the latest data from ISS Market Intelligence’s Simfund shows, which, like PLANSPONSOR, is owned by Institutional Shareholder Services Inc.
American Funds brought $5.1 billion into its TDF investments in the quarter, still the highest among competitors, but less than the $7 billion in Q1, according to Simfund’s TDF market insights. The Vanguard Group’s TDF inflows were close behind at $4.2 billion in the quarter, and Fidelity Investments came in a distant third in inflow size at $844 million.
Other firms saw net outflows from their funds in the quarter, most notably T. Rowe Price ($650 million), J.P. Morgan Funds ($627.9 million), and Principal Funds ($240.2 million).
The inflows by manager were:
TDF Manager | Q2 Net New Flows, MM |
American Funds | 5,106.4 |
The Vanguard Group | 4,155.3 |
Fidelity | 843.8 |
BlackRock | 811.3 |
State Street Global | 480.1 |
TIAA | 383.5 |
PIMCO LLC | 253.2 |
MFS | 200.0 |
Voya Investments | 136.1 |
Schwab | 109.8 |
GuideStone Capital Management | 109.8 |
Dimensional Fund Advisors | 57.2 |
Natixis Advisors | 40.0 |
Total | $12.6 Billion |
Overall assets held in TDFs ended Q2 strong as markets strengthened, compared with the end of 2022 and the start of 2023. Overall assets clocked in at $1.6 trillion at the end of June, a 12% increase when compared to all of 2022’s $1.46 trillion in assets.
If the trend holds for the year, TDF assets could hit another record in 2023: TDF assets have grown year-over-year in every 12-month period except two going back to 1990, according to Simfund. The growth dropped off once during the global financial crisis of 2008 and again in 2018 on global slowdowns in growth.
TDF Assets 2020 | TDF Assets 2021 | TDF Assets 2022 | TDF Assets Q2 2023 |
1,549,922 | 1,765,407 | 1,459,159 | 1,633,369 |
Vanguard and Fidelity still hold commanding leads ahead of American Funds in terms of total assets held. As of the end of Q2, Vanguard had $585.4 billion in TDF assets, followed by Fidelity at $338.2 billion and American Funds at $248 billion. T. Rowe Price ($160.1 billion) and TIAA ($81.5 billion) round out the top five.
About 59% of 401(k) plan participants are invested in some form of TDF, according to the latest research from the Investment Company Institute.