Target Date Fund Assets Surge to $4.8T as CITs Gain Market Share

Brian Anderson

3 hours ago

Target-date assets surged to $4.8 trillion in 2025, up more than 20% year over year, according to Morningstar’s 2026 Target-Date Fund Landscape research report, published today.

The report confirms target-date funds keep getting bigger, with assets up 11.9% annualized over the past decade, cementing their role as the default retirement investment. Asset growth ensured that, despite fee decreases, managers still collected an additional $580 million in revenue in 2025.

Speaking of those fees, record-low mutual fund fees saved investors saved investors significant money, even as rising assets more than offset those cuts for managers. Fees have been cut in half over the last decade. A 2-basis point drop in target-date mutual fund fees last year across $2 trillion in mutual funds translated into more than $80 million in investor savings. The asset-weighted average expense ratio fell to 27 basis points, down from 29 basis points in 2024.

Another baseline finding is confirmation that collective investment trusts (CITs) continue to gain share. After surpassing mutual funds as the dominant vehicle in 2024, CITs represent 54% of total assets (up from 52% the prior year) as of the end of 2025, as plan sponsors favor lower-cost vehicles. Notably, all new target-date launches in 2025 came in CIT form.

More key takeaways from the research:

The market remains highly concentrated. Five firms control 80% of assets, and Vanguard alone holds about 37%, or $1.8 trillion. Some firms, cush as Fidelity and Capital Group, dominate in mutual funds; others such as State Street and BlackRock lead in CITs.
Vanguard led the industry in target date asset growth in 2025, adding $35.9 billion in net new assets. Capital Group ranked second, with $24.0 billion in new target date assets. Third-place State Street brought in $22.2 billion.
Target date launches remained strong through 2025, driven entirely by the launch of 21 new CIT series. Like previous years, several of the new CIT series are based on existing lineups from major mutual fund providers, such as T. Rowe Price.
Portfolios are taking on more equity risk, particularly early in the glide path, as managers raise stock allocations to boost long-term growth.
Asset-allocation glide paths have become more equity-heavy, with most of the increase coming early in the saving years. The median equity exposure for those who are 45 years from retirement stood at 93% as of the end of 2025, up from 89% a decade prior.
Closures picked up in 2025, with six mutual fund and four CIT series shutting down. Most were small with under $1 billion in assets at liquidation.
As of December 2025, Morningstar Manager Research analysts assigned Medalist Ratings to 29 target-date mutual fund and exchange-traded fund series and 33 target date CIT series.

Morningstar’s annual report on target-date funds analyzes flows, fees, asset composition, market dominance, strategy performance, and more. Check it the complete report—including Medalist Ratings—at this link.