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Investors don't know what they own in their portfolios

You can probably name the starting lineup of your favorite baseball team or the cast of that television show you can't miss. But what about the top performers in your retirement portfolio?

Only two-thirds of Americans can describe the investment products they hold in their portfolios, down from 76 percent five years ago, according to a new analysis from retirement market researcher Hearts & Wallets. (Tweet This)

On the bright side, investors are more aware of their asset allocation--with three-quarters being able to identify their mix of assets last year, up from 68 percent in 2013. That's good news because asset allocation is a major contributor to investment performance, even though there is a debate about exactly how much asset allocation contributes to performance.

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"Maybe that's enough for most investors to only know their asset allocation and not their specific investments," said Laura Varas, co-founder of Hearts & Wallets. "On the other hand, maybe investors should know what they own... and the lack of awareness poses a challenge for financial services firms."

The decline of the star mutual fund managers is partly to blame for investors' disinterest in specific products as the bull market heads into its seventh year, Varas said. In 1990s, she noted, ordinary investors sought out Fidelity's Magellan Fund because Peter Lynch was a household name.

The rise of target-date funds, which shift their asset mix based on the expected year of retirement, also means investors are more likely to know their asset allocation than specific funds. "Peter Lynch has a personality," Varas said. "Fidelity's 2040 target-date fund doesn't."

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Assets in target-date funds grew to more than $700 billion in 2014, according to mutual fund research firm Morningstar. But for the first time in the past decade, inflows to the funds were in the single digits (8 percent) last year compared with 10.5 percent in 2013.

"It's not surprising that as the target-date industry has continued to mature, growth would slow," Janet Yang, Morningstar's director of multi-asset class manager research, said in a statement. "Nevertheless, target-date funds still notched the third-highest organic growth rate of any U.S. category last year, further cementing their status as the investment of choice for U.S. workers' retirement savings." (U.S. equity and taxable bond funds are the only two domestic categories to receive more net inflows than target-date funds last year.)

Hearts & Wallets estimates that 56 million U.S. households (out of 123 million) prefer goal-based investment products, like target-date funds, to build portfolios by themselves or with an advisor. The company's research is based on annual surveys of 5,500 U.S. households since 2009; its latest survey was conducted in July 2014, but the study was released Monday.

More investors continue to buy exchange-traded funds to replace their traditional mutual funds, Vargas said. Online brokers now reach 40 percent of U.S. households, up from 26 percent in 2013. But most investors are relatively passive, with 3 in 4 online brokerage account owners trading no more than six times a year, according to Hearts & Wallets' estimates. This indicates a majority of people are using the accounts to hold investments, Varas said.

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Target-date funds, which launched in 1994, are the first generation of goal-based products for retirement, Varas said. Robo-advisors, such as Betterment and Wealthfront, challenge these funds because they can create personalized portfolios of exchange-traded funds that can cost less than many target dates, she said.

"Target-date funds are like the Model T of [goal-based] retirement strategies," Vargas said. "I don't know what the next 'car' will be."