TIPS and REITs remain the most popular non-traditional asset classes in target-date portfolios, according to Pensions & Investments' most recent survey of the largest U.S. retirement plans.
Among top 200 plans responding to the question of alternatives available in target-date portfolios, 84% indicated TIPS as an option (up from 76.3% in 2013). Also, 61.3% of sponsors said REITs are used in target-date portfolios – a 10-percentage-point increase from 2013.
Commodities and private real estate followed with 49.3% and 26.7%, respectively.
One caveat – it should be noted that not all plans responded in both years. When comparing plans that responded in both years, REITs, private real estate and hedge funds/funds of funds each increased by about 3 percentage points – to 55.6%, 27% and 6.3%, respectively, in 2014.