Returns on target-date funds continue to disappoint, with the five largest 2010 funds trailing the S&P 500 by 11 percentage points since the market’s March 9 low. They are up an average of 25% since that date, well below the benchmark index’s 36% rise, The Wall Street Journal reports.

Many managers of target-date funds continue to defend and maintain their considerable equity exposure, despite the fact that 2010 target-date funds lost an average of 25% last year, with one plummeting as much as 40%. The managers say the market’s crash in 2008 was an anomaly and that in order for people to have enough money to last 30 years in retirement, equity exposure of 50% or higher is necessary.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.