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Diversification Pays Off for Target-Date Funds

2012 leaders were well-served by global, real estate stakes.

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It was a very, very good year for target-date funds.

Target-date funds boomed in 2012 on both the growth and performance fronts. In many respects, of course, these investments--key tools in so many investors' 401(k) plans--were just partaking in the general success of the markets. But the funds' highly diversified nature also gave the offerings an additional edge last year, and true disappointments were in a distinct minority.

Josh Charlson does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.