Overview
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- The S&P Target Date® Scorecard provides performance comparisons and analytics covering the U.S. target date fund (TDF) universe.
- The S&P Target Date Index Series is a consensus-driven, multi-asset benchmark for TDFs. It is designed to be an accurate representation of TDFs in the U.S. market and to be the basis against which managers can assess their performance.
- The series is constructed from indices that represent the actual allocations of funds in the U.S. target date space.
- The assets used in the construction of the index series are all investable, and the weights are published in advance of the index series’ rebalancing.
- S&P Dow Jones Indices also produces S&P Target Date Style Indices. The “To” style indices aim to reduce the impact of market drawdowns around the expected retirement date, while the “Through” style indices aim to mitigate longevity risk—the risk of outliving one’s assets in retirement.
- The series consists of 13 S&P Target Date Indices, 11 S&P Target Date “To” Indices and 12 S&P Target Date “Through” Indices. New index vintages are launched in five-year intervals.
Market Commentary
2024 was marked by investors watching for a long-awaited Fed rate cut—which finally occurred three times at the year’s end—which both buoyed and weighed on markets broadly. The Magnificent 7 also continued to drive U.S. equity markets, with positive news on earnings or other metrics propping up investor sentiment, and negative news driving down performance.
With the crescendo of a long U.S. political season ending in November with the election of President Donald Trump, markets and consumer sentiment initially strengthened then entered a period of volatility with the introduction of potential tariffs later that month. This reignited concerns about a global trade war, leading to further inflation and economic slowdown.
Beyond the U.S., escalating geopolitical risks contributed to market instability. Central banks worldwide faced challenges in balancing inflation control with economic growth, increasingly building stockpiles of safe-haven assets like gold, which helped drive up gold prices.
In addition to gold, prices of commodities such as silver and copper surged, driven by factors including trade tensions and supply constraints. These fluctuations especially affected economies dependent on commodity exports and influenced inflation expectations globally.
Equities
- Region: The U.S. generally outperformed other regions in 2024, with emerging markets outperforming developed market equities. The S&P 500® TR was up 25.02%, versus the S&P Developed Ex-U.S. BMI NTR, up 3.25%, and the S&P Emerging BMI NTR, up 11.60%.
- Capitalization: Within the U.S., large caps outperformed both small caps (the S&P SmallCap 600® TR at 8.70%) and mid caps (the S&P MidCap 400® TR at 13.93%).
- REITs: Developed ex-U.S. REITs substantially underperformed U.S. REITs. The S&P Developed Ex-U.S. REIT NTR posted -8.64%, while the Dow Jones U.S. Select REIT Index TR was up 8.10%.
Fixed Income
- Short-Term: Shorter dated paper was the second-best performing segment within fixed income, with the S&P U.S. Treasury Bond 0-1 Year Index up 5.19%.
- High Yield: High yield outperformed all other bond sectors, with the S&P 500 High Yield Corporate Bond Index posting 5.63%.
- S. Aggregate: 2024 saw choppy performance for the broad U.S. bond market, as inflation remained a concern for investors waiting for Federal Reserve action. The S&P U.S. Aggregate Bond Index posted 1.82%.
- TIPS: TIPS were up modestly, with lessened yet sticky inflation, with the S&P U.S. TIPS Index posting 2.38%.
Commodities
- The S&P GSCI TR had a solid year, up 9.25%.
