Target date funds which have a clear-cut investment objective: to secure its investors a financially secure retirement; grew 70% from 2006 to 2007, as assets reached about USD 182.5 bn at year-end, according to Financial Research Corp. of Boston. The boost in sales continues a five-year upswing, with assets increasing at least 60% each year since 2002. They have also been attracting critics. These funds are known for their simplicity, however, analysts and advisers point to issues involving diversification, management style and costs.

"The tragedy is that the simplicity belies the reality that none of these formulaic asset allocation solutions can produce plan values that come anywhere near what someone would need for a financially secure retirement," said Elliot Fineman, of the Compass Institute LLC, a Chicago-based research firm that studies market cycles. Despite criticisms, investors are flocking to the funds. In 2000, there were 23 target date funds, according to Lipper Inc. of New York. Today, there are 289. Fidelity Investments of Boston, The Vanguard Group Inc. of Malvern, Pa., and T. Rowe Price Group Inc. of Baltimore represented 74% of all net sales in target date funds last year, FRC said. However, majority of these funds have less than a three-year history, making judgment difficult, said Andrew Clark, Lipper's Denver-based head of research for the Americas. "Target dates are not the be-all and end-all of retirement planning," he said.

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