The rising influence of target date funds on markets

The market structure has changed significantly since the global financial crisis. Most recently, the share of pro-cyclical investment strategies has increased markedly thanks to the enormous growth of index funds and the advance of systematic strategies (e.g. Robo Advisor). However, with socalled target date funds, which invest anti-cyclically and follow a life cycle model, a counterweight is increasingly emerging – with three noticeable impacts on markets.