Rather than offer the complete lineup of a target-date series in their 401(k) plan, sponsors are selecting only those funds that fit the age and demographics of their employees. This could result in under-funded target-date funds that could put the entire lineup in jeopardy, according to a new report, “Trends in Date-Date Portfolios on Recordkeeper Platforms,” from Financial Research Corp. And most asset managers are not anticipating these demand hurdles, FRC said.

The report is based on the analysis of target-date funds in 50,000 401(k) plans, representing 90% of all 401(k) plan assets. It looks at distribution trends among target-date funds and offers ways to grow these types of funds.

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.