In a research study by Financial Research Corp on target date funds it is found that the managers have increased their allocations to equities, on average. Average target date fund had 68% of its assets invested in stocks, up dramatically from 55% five years earlier. In a separate study, "The Quarterly Report of Lifecycle Funds," it is found that even though recent market volatility presented the first real challenge to life cycle funds since market declines early in the decade, the funds enjoyed net sales of $14.9 billion in the first quarter and asset growth of 1%.

While target date funds may not make much sense for high-net-worth clients, 401(k) participants who lack investment expertise may find them useful, said Lisa Falcone, a financial adviser with Newton, Mass.-based Sapers & Wallack Inc., which manages $200 million in assets. "If you have no investment knowledge whatsoever and you're not comfortable picking funds and don't want to be bothered, then target funds are the way to go," she said.