Use of target-date funds is increasing, study finds

04/16/2010 | Financial-Planning.com

Vanguard Group released a study showing a significant increase in the use of target-date funds. The Pension Protection Act of 2006 has bolstered the funds by qualifying them as default investment alternatives. The study also cites growth of automatic enrollment in the funds through company-sponsored plans. However, Vanguard representative Linda Wolohan said people aren't buying them solely because they are the default option. "People are actively choosing these funds," Wolohan said. "A lot of people say target-date funds are growing because they're the default, which is true, but a lot of people are buying them on their own."

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