PR Newswire
CHICAGO, May 12, 2020
CHICAGO, May 12, 2020 /PRNewswire/ -- Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment research, today published its annual Target-Date Strategy Landscape Report. The 2020 report examines investors' usage of target-date strategies throughout 2019 and amid recent market volatility, as well as key trends behind target-date adoption, how firms are adapting to meet investor preferences, and recent regulatory changes that may alter the target-date landscape going forward.
Target-date strategies are portfolios that combine stocks and bonds, systematically shifting the mix as they approach the specified target retirement date. The majority of target-date assets are in mutual funds, but collective investment trusts (CITs) have outgrown target-date funds in recent years to account for approximately 40% of the industry's market share. Unlike target-date funds, CITs are only available through qualified retirement plans, and asset-management companies can negotiate fees with each plan separately.
"Bear markets tend to test investors' resolve, and we saw this among normally stolid target-date investors. While target-date strategies performed largely as expected, some strategies nearer to the retirement date skidded to big losses, rattling investors," said Jason Kephart, strategist for the multi-asset and alternative strategies research team at Morningstar. "However, when we look at the landscape over a longer period, the long-term trends remain. Investors are opting for low-cost strategies and demanding flexibility and choice, which has increasingly led them to invest in CITs. Meanwhile, the passing of the SECURE Act in December 2019 could lead to potential inclusion of guaranteed income products in target-date strategies."
The Target-Date Strategy Landscape report is available here to download. Key findings from the report include:
Morningstar today published a Fund Spy article on Morningstar.com that reviews the latest ratings for 28 target-date fund series that Morningstar covers, available here.
Morningstar Target-Date Fund Series Reports
Morningstar Target-Date Fund Series Reports (the Reports) are designed to help individual investors, financial advisors, consultants, plan sponsors, and other interested fiduciaries make informed decisions when selecting a series of target-date funds. The methodology for the Reports is available here.
Morningstar Target-Date Fund Series Reports and Morningstar's Analyst Ratings for target-date series are available in Morningstar DirectSM, the company's global investment analysis platform for institutional investors, and in Morningstar Office CloudSM, Morningstar® Advisor WorkstationSM, and Morningstar® Analyst Research CenterSM, the company's investment planning and research platforms for financial advisors.
About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The Company offers an extensive line of products and services for individual investors, financial advisors, asset managers, retirement plan providers and sponsors, and institutional investors in the debt and private capital markets. Morningstar provides data and research insights on a wide range of investment offerings, including managed investment products, publicly listed companies, private capital markets, debt securities, and real-time global market data. Morningstar also offers investment management services through its investment advisory subsidiaries, with approximately $179 billion in assets under advisement and management as of March 31, 2020. The Company has operations in 27 countries. For more information, visit www.morningstar.com/company. Follow Morningstar on Twitter @MorningstarInc.
Morningstar's Manager Research Group consists of various wholly owned subsidiaries of Morningstar, Inc. including, but not limited to, Morningstar Research Services LLC. Analyst Ratings are subjective in nature and should not be used as the sole basis for investment decisions. Analyst Ratings are based on Morningstar's Manager Research Group's current expectations about future events and therefore involve unknown risks and uncertainties that may cause such expectations not to occur or to differ significantly from what was expected. Analyst Ratings are not guarantees nor should they be viewed as an assessment of a fund's, CIT's or separately managed account's underlying securities' creditworthiness. This press release is for informational purposes only; references to securities or a separately managed account investment strategy in this press release should not be considered an offer or solicitation to buy or sell the securities or to invest in accordance with that strategy.
©2020 Morningstar, Inc. All Rights Reserved.
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Media Contact: Sarah Wirth, +1 312 244-7358 or [email protected]
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SOURCE Morningstar, Inc.
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