Money poured into target date funds during the first quarter, led by
The Vanguard Group Inc. and
T. Rowe Price Group Inc.
Meanwhile, nearly $50 million flowed out of
AllianceBernstein LP's target date funds during the quarter.
“They have seen a few quarters in a row for outflows, and the performance of the funds has lacked a little bit recently,” said Jeremy Stempien, senior consultant for Ibbotson Associates Inc., which tracks funds moving into and out of target date funds.
Morningstar Inc.'s mutual fund research team at the end of last year had ranked
AllianceBernstein in the “bottom” category among target date fund families, along with OppenheimerFunds Inc.
Total net flows into target date funds reached $16.6 billion during the first quarter, up from $12.2 billion a year earlier, according to Ibbotson's latest Target Maturity Report.
Major players Vanguard and
T. Rowe Price experienced a surge in inflows during the first quarter. Vanguard pulled in some $5.47 billion in flows, while T. Rowe reaped $2.78 billion.
Up-and-coming target date fund provider J.P. Morgan Asset Management picked up $402 million in net flows during the first quarter.
In terms of performance, U.S. small-cap growth and real estate produced plum results for target date funds in the quarter, returning 9.2% and 7.5%, respectively.
Likewise, the U.S. small-cap-growth sector was the big winner for the 12-month trailing period, with a 31% gain. Commodities came in second with 28.5% in returns over the 12-month period, while real estate followed closely with returns of 25%.
Non-U.S. developed equity brought in just 10.9% over the past 12 months, but emerging-markets equity beat that performance, garnering a return of 18.8%.
High-yield bonds were the winner in the fixed-income category, with a return of 14.7% over the trailing 12 months.
Commodities vehicles heavy in energy allocations managed to fare well, compared with those that had a smaller weighting to the category, Mr. Stempien said.
The Standard and Poor's GSCI Commodity Index, which has a large allocation to energy, returned close to 11.5% for the quarter. The Dow Jones-
UBS Commodity Index — which has half the energy weighting the S&P GSCI index has — provided a mere 4.5% return during the period.
“I think it's a bit of an anomaly, due to a number of factors. The global turmoil affected energy and oil markets, and had a more drastic effect [on performance],” Mr. Stempien said.
“This would be another reason why it's important for fund families to make sure they're diversified, and that they can take damage and absorb anomalies in asset class returns,” he said.
E-mail Darla Mercado at [email protected].
