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Laxman Pai, Opalesque Asia:

Target-date funds (TDFs) received $153.3 billion in net inflows in 2022, of which $121 billion flowed into collective investment trusts (CITs), with mutual funds receiving $32.3 billion, despite high market volatility, said a study.

According to Morningstar, while down on the year, that performance was far better than the broader universe of mutual funds and ETFs, which had net outflows of $370 billion, the first year with new outflows since Morningstar started tracking the data in 1993.

Meanwhile, market depreciation drove a roughly 14% drop in target-date-fund assets in 2022 to $2.82 trillion. The decline came off a record year for TDFs in 2021 when the investment vehicles popular in retirement plans hit a record high of $3.27 trillion, Morningstar stated in its annual report on target-date strategies.

The 2023 report examines the latest trends across the target-date industry, including the target-date series that are gathering the most inflows, the ongoing adoption of CITs as plan sponsors' preferred vehicle, and the continued critical role fees play when selecting a series.

CITs are on pace to overtake mutual funds as the most popular target-date vehicle in the next two years. These vehicles account for 47% of all target-date strategy assets as of the end of 2022.

In the meantime, the opportunity for environmental, social, and governance (ESG) target-date series has broadened, as the Department of Labor modified its ......................

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