The 25 largest managers of defined contribution mutual fund assets reported an aggregate of $1.988 trillion in proprietary-fund assets for the year ended June 30, a 17.8% increase from the $1.688 trillion a year earlier, according to the latest survey by Pensions & Investments.
The asset growth for the latest period trampled the advance of 5% for the previous survey, which covered the 18 months through June 30, 2012.
The three largest firms — Fidelity Investments, Vanguard Group Inc. and Capital Research & Management Co. — accounted for 58% of the DC-plan mutual fund assets in the P&I survey. The five biggest firms — adding Pacific Investment Management Co. LLC and T. Rowe Price Group Inc. to the top three — represented nearly 73% of the total.
Fidelity Investments, Boston, held onto first place with $485.1 billion, up 11.8% from the previous survey; Vanguard Group, Malvern, Pa., was a surging second with $441.1 billion, up 19.8%; and Capital Research & Management, Los Angeles, which offers the American Funds family, remained in third place with $228.8 billion, up 9.7%.
T. Rowe Price, Baltimore, rose to fourth place with $149.4 billion in DC mutual fund assets, up 18.6% from its fifth-place finish in the previous survey. PIMCO, Newport Beach, Calif., dropped to fifth from fourth even though its mutual fund assets rose 7.2% to $140.8 billion.
A common theme among managers is the role of target-date strategies in propelling DC asset gains.
“Our target-date growth is across the board, and we're seeing an increased target-date fund penetration in smaller markets,” said Michael Falcon, managing director and head of retirement for J.P. Morgan Asset Management, New York. “Over 70% of net flows into the DC space are target-date mutual funds, commingled trusts and separate accounts.”
In the latest P&I survey, J.P. Morgan's proprietary target-date strategies rose 81% to $26.67 billion compared to $14.7 billion for the previous survey.
Overall, J.P. Morgan's DC mutual fund assets rose 54% to $45.2 billion from $29.3 billion, enabling the firm to vault into eighth place from 10th in P&I"s ranking.
The top 20 managers of proprietary target-date strategies used by DC plans ran a combined $601.8 billion as of June 30, a gain of 36.8% from the year earlier.
Fidelity remained the target-date strategy leader with $148.6 billion, up 15%. Vanguard was second with $127.8 billion, up 38%. T. Rowe Price advanced one position, recording a 63.4% gain to $83.1 billion. BlackRock Inc., New York, dropped to fourth from third, even though its target-date strategies' assets gained 32.7% to $77.6 billion.