While the organic growth of target-date funds has slowed, their growth is still competitive with that of other broad mutual fund asset classes, according to fund tracker Morningstar. Assets in these funds, which have become an established part of defined contribution plans, exceeded $500 billion in the first quarter of 2013, according to a research paper released by the company Thursday.

At the same time, fees in target-date funds continue to fall: Their asset-weighted average expense ratio dropped to 0.91 percent in 2012 from 0.99 percent the year before, said the survey.

Assets for these funds were $534 billion at the end of the first quarter of 2013, compared to $157 billion at the end of 2008 and $375 billion at the end of 2011. Growth has slowed since the initial surge after target-date funds were approved as default funds for retirement plans in 2006, says Josh Charlson, Morningstar analyst.

Vanguard, Fidelity and T. Rowe Price are the market's leaders, and still control about three-fourths of target-date fund assets, despite the impressive growth of some smaller players. At the same time, four firms, American Independence, Columbia, Oppenheimer and Goldman Sachs, stopped selling the funds altogether.

Morningstar notes that more target-date assets are being shifted to passively managed investments. While 68 percent of assets in these funds were in actively managed products at the end of last year, inflows to passively managed funds surpassed those into active vehicles for the first time in 2012.

The allocations also are shifting, according to the survey. Target-date fund managers have significantly increased their allocations to non-U.S. equities. Since 2005, international stocks have risen from 24 percent of the average 2040 fund's equity allocation to 36 percent at the end of last year. Emerging-markets bond funds appeared in nine target-date series in 2008, compared with 18 in 2012.

The survey concluded that the average gradual reallocations of these funds toward safer investments, the so-called "glide path," should reasonably meet the typical worker's spending needs in retirement.

Josh Charlson, Morningstar’s fund-of-funds strategist and the study's lead author, says, “Though the asset allocation or fund selection among target-date investments vary, target-date funds are relatively suitable investments for retirement savings. Investors realize that, too, and continue to put their money in these funds.”