6. State Street
Target date fund assets: $120 billion
Market share: 4.3%
One of the Big Three index fund managers, State Street managed $120 billion in target date fund assets for 32 million clients as of the end of 2022.
7. JPMorgan
Target date fund assets: $88 billion
Market share: 3.1%
While JPMorgan is the largest bank in the United States, it ranks seventh in assets managed in target date funds.
8. Nuveen
Target date fund assets: $74 billion
Market share: 2.6%
Owned by TIAA, Nuveen manages TIAA-CREF target date funds, with the Lifecycle and Lifecycle Index funds being the largest.
9. Principal
Target date fund assets: $73 billion
Market share: 2.6%
Principal offers a target date fund that takes a hybrid active-passive investing approach as well as a more actively managed option. The company had $73 billion in assets managed under target date funds as of the end of 2022.
10. Schwab
Target date fund assets: $26 billion
Market share: 0.9%
The 10th largest bank also has the 10th most assets managed under target date funds. The Schwab Target Index fund mainly invests in Schwab exchange-traded funds (ETFs), while the Schwab Target fund invests largely in other Schwab funds.
When to invest in a target date fund
Target date funds are managed with the intention to maximize returns for a particular end date. That makes them most suitable for investing for retirement or college -- events that are guided by a timeline with a desired financial return attached.
Target date funds do come with fees -- known as expense ratios -- for the automatic rebalancing that occurs as the target date approaches. Those fees can reach 1%, although funds that invest primarily in ETFs can have lower expense ratios.
While it’s possible to manually rebalance your portfolio over time, target date funds allow investors to set it and forget it, which can be appealing for those who don’t want to worry about managing their retirement portfolio every year.
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