Total assets under management for target maturity funds reached a record high in the first quarter of 2012, or $429 billion, according to a report released by Morningstar.

The report, titled the Ibbotson Target Maturity Report 1Q 2012, also stated that the average return for target maturity funds during the quarter was nearly 9%, more than 3.5% below the S&P 500 Index but more than 8.5% better than the BarCap U.S. Aggregate Bond Index. Performance in the asset class was boosted by improved returns in the equities markets.

Moreover, for the second consecutive quarter, all target maturity funds with at least a one-year history ended the period with a positive return. Those funds furthest from retirement had the strongest relative performance as equities significantly outperformed fixed income.

Target maturity funds are investment products designed to mature at a specific year. They are growing in popularity as a vehicle for retirement investing.

Target maturity funds also saw the third-highest quarterly flow, of $15.8 billion, since the first target maturity fund was launched in 1994. The largest quarterly flows was fourth quarter 2007, followed by first quarter of 2011.