Target-date fund assets totaled $485 billion as of Dec. 31, an all-time high, according to the latest quarterly report by Ibbotson Associates, a unit of Morningstar.
It is a 4.3% increase from the previous record of $465 million set at the end of the third quarter and a 29% increase from the previous year.
The report tracks 403 target-date funds representing 46 fund families with a track record of at least a year.
Fidelity Investments, T. Rowe Price and Vanguard Group captured 69% of net inflows during the fourth quarter. Overall, 75% of target-date fund providers had net inflows during the quarter, according to the report.
For the three months ended Dec. 31, the average target-date fund returned a relatively flat 1.7%, which still outperformed both the Barclays Aggregate Bond index, which returned 0.2%, and the S&P 500, which dropped 0.4%.
For the year ended Dec. 31, the average fund returned 13.1%, below the S&P 500 index's 16% return but still above the Barclays Aggregate Bond index, which returned 4.2%.