Target-date funds get plenty of praise in Morningstar's latest report, although it also found that growth in TDFs in 2014 fell into the single-digits for the first time in a decade, despite netting nearly $50 billion for the year.

Starting with the positive, the report said annualized asset-weighted average investor returns — which take into account when funds flow into any given series — came in at 6.1 percent over the past 10 years. That's 1.1 percent higher than the typical funds' average total returns – an indication, it said, that investors are using TDFs effectively.

The report also said longer-dated funds tended to beat shorter-dated funds. This is unsurprising in the context of a strong stock market, as TDFs are more heavily invested in equities early on to promote higher returns with higher potential risks and shift their asset mix to more conservative investments, such as bonds, as the investor gets older.