The defined contribution marketplace “really is migrating in a steady and strong way to being a target-date dominant area,” he said. J.P. Morgan's total target-date assets rose 41.1% to $67 billion as of June 30, keeping it in fifth place.
Leveraging relationships with the firms' defined benefit clients has positioned the firm's defined contribution business well, Mr. Galateria said.
Other top target-date managers were Fidelity, which retained its No. 2 position despite reporting a 0.9% decline in its target-date assets to $165 billion. T. Rowe Price rose a notch to third place with $139.6 billion, up 21.9% from 2014, and BlackRock Inc., New York, fell to fourth from third despite reporting a 9.5% gain in its target-date assets to $131.4 billion.
John Panagakis, TIAA-CREF senior managing director and head of asset management business development, also cited the rising popularity of target-date funds and index funds as part of TIAA-CREF's growth story. The New York-based firm advanced five positions in the mutual fund rankings to No. 9 with $45.6 billion in proprietary assets as of June 30, up 22.3% from 2014. During that period, TIAA-CREF's target-date assets rose 25% to $22 billion.
Re-enrollment, 403(b) plan consolidation, and cost consciousness have been tailwinds for TIAA-CREF's target-date strategies, Mr. Panagakis said.
In total, the 20 largest managers of proprietary target-date strategies used by DC plans managed $961.2 billion as of June 30, up 18.2% from 2014.
P&I's survey also ranked the largest managers of custom target-date strategies. AllianceBernstein LP overtook BlackRock to become the largest custom target-date strategy manager with $33.6 billion, up 133% from last year. The jump was due to a restatement of assets and a large client gain.
BlackRock ranked second with $27.3 billion, up 3.4% from 2014.
J.P. Morgan ranked third among the largest custom target-date managers with $12.3 billion. Although a small part of the overall universe, there is “a steady flow of (custom target-date) opportunities that come out year to year,” said J.P. Morgan's Mr. Galateria.
As defined contribution plans “continue to be an ever-growing share of the market” and plan design gets more comprehensive, it follows that plan executives are exploring custom target-date strategies, said Lorie Latham, a director at Towers Watson & Co. However, it takes “scale and buying power” to employ custom strategies, she said. Along those same lines, Ms. Latham said she has seen an uptake in DC outsourcing. Plan executives that want that customization but don't have a large internal staff may outsource.
Chuck Black, senior vice president, investment services, at Fidelity Investments, said although plan executives are inquiring about custom target-date strategies, the pickup rate appears low.