The three largest target-date families account for over 70 percent of all target-date assets, according to Morningstar.

Vanguard's 2025 fund allocates 67 percent of assets to public stocks, while Fidelity and T. Rowe Price's allocate 70 and 69 percent respectively.

For the 2035 glide path, Vanguard allocates 81 percent to stocks, while Fidelity allocates 91 percent, and T. Rowe Price allocates 82 percent.

That is about twice the level of stocks held in the average defined benefit plan, according to research for Towers Watson that Fandetti cites.

"If no reasonably well-advised pension fund would invest in so lop-sided a manner as do the largest target-date funds, how can such an allocation to public equities be appropriate for an individual investor," asks Fandetti.

He goes on to show that returns on the funds have moved virtually in lock step with the stock market. In August, the overall market lost 6 percent, the exact same as Fidelity's 2035 fund. Vanguard and T. Rowe Price's 2035 funds lost 5.4 and 5.5 percent, respectively.

For 2015, Vanguard's 2035 fund has lost 2.5 percent, while Fidelity's has lost 1.3 percent and T. Rowe Price's has lost 1.1 percent. By comparison, Vanguard's Total Stock Market Index fund has lost 2.7 percent.

In 2008, when Vanguard's Total Stock Market Index fund fell by 37 percent, Fidelity's 2035 target date fund lost 37.8 percent, while Vanguard's 2035 fund dropped 34.7 percent and T. Rowe Price's fell 39 percent.

Part of the reason for the imbalance in target-date funds can be explained by profit motive, says Fandetti.

Actively managed equity funds command more in fees. At an average fee of 78 basis points, the $700 billion in assets in all target date funds generates nearly $5.5 billion in annual revenues industry-wide, says Fandetti.

He also says that the Department of Labor's "virtual endorsement" of target-date funds as qualified default investment alternatives leaves fund companies with "little incentive to change their current approach to target-date fund management."

Fandetti doesn't necessarily endorse higher fixed-income allocations, nor is he intending to "impugn" all fund managers.

Low bond yields and elevated stock prices leave retirement investors with few options.

And without the availability of alternative like private equity, achieving long-run returns in the middle single digits requires high levels of public stocks.

"Alternatives are no panacea, of course," writes Fandetti.

But the unusually high allocations to public company stock, when compared to defined benefit fund allocations, suggests "retirement savers need and deserve better choices," said Fandetti.