Overview
- 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
In the first half of 2024, U.S. equity markets demonstrated resilience amid fluctuating economic conditions, buoyed by strong corporate earnings and a robust labor market. However, inflationary pressures persisted, leading the Federal Reserve to maintain a cautious stance on interest rates.
Globally, markets faced headwinds from geopolitical tensions and varying recovery rates post-pandemic. Emerging markets showed promise, particularly in Asia, as consumer demand rebounded.
In fixed income, yields remained volatile as investors navigated the Fed's policy signals, with a slight upward trend in long-term rates reflecting inflation concerns.
Commodities experienced mixed performance; energy prices surged due to supply constraints, while agricultural commodities faced downward pressure from favorable weather conditions. Overall, the first half of 2024 showcased a complex interplay of growth and inflation dynamics across markets.
Equities
- Region: The U.S. outperformed other regions in the first half of 2024, with emerging markets outperforming developed market equities. The S&P 500® TR gained 15.29%, versus the S&P Developed Ex-U.S. BMI NTR at 4.20% and the S&P Emerging BMI NTR at 7.93%.
- Capitalization: Within the U.S., large caps outperformed both small caps (the S&P SmallCap 600® TR was slightly down, at -0.72%) and mid caps (the S&P MidCap 400® gained 6.17%).
- REITs: Developed ex-U.S. REITs substantially underperformed U.S. REITs. The S&P Developed Ex-U.S. REIT NTR lost 6.92%, while the Dow Jones U.S. Select REIT Index TR fell 0.55%.
Fixed Income
- Short-Term: Shorter-dated paper was the best-performing segment within fixed income, with the S&P U.S. Treasury Bond 0-1 Year Index up 2.40%.
- High Yield: High yield was up slightly in the first half of 2024, with the S&P 500 High Yield Corporate Bond Index posting 1.62%.
