Use of target-date funds is up significantly thanks to their status as qualified default investment alternatives under the Pension Protection Act of 2006 and the growth of automatic enrollment in company-sponsored plans, according to a new Vanguard study.

Since their inception in 2004, target-date funds now account for just under $60 billion of Vanguard’s total $1.2 trillion in assets under management. Net cash flows have grown steadily year over year, from $2.3 billion in 2004 to a peak of $14 billion in 2007, dipping to $13 billion in 2008 and $12.9 billion in 2009. Inflows for the first quarter of 2010 are already at $5 billion, however, indicating target-date finds upward trajectory is back on track.

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