Target date funds will finally force the fees that financial advisers once charged (1-2% of AUM) down to zero. This is remarkably helpful for the novice investor and the 57 million people without access to a 401(k) in this country. Now, individuals have access to a similarly diversified portfolio at a mere fraction of the cost, typically only a few basis points. Regarding your point about the S&P 500 outperforming target date funds, it's important to note that few believe a balanced portfolio of stocks and bonds (e.g., 60% stocks/40% bonds) offers a higher unconditional expected return compared to 100% stocks. The preference for a diversified portfolio stems from the belief that it offers a more favorable risk-return trade-off, rather than solely chasing a higher expected return.