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Most other DC investments saw net outflows during the quarter, with domestic large-cap, company stock and domestic small- to mid-cap particularly hard hit by outflows. However, turnover—which reflects net transfer activity levels in the DC Index—was modest during the quarter, coming in at 0.43% (about 60% of typical levels). This likely owes to the fact that participants typically do not react strongly to short periods of market weakness. Domestic large-cap retains the biggest share of participant assets in the Index (24.3%). This asset class also has the distinction of having experienced quarterly net outflows more often than any other major asset class outside of company stock; with net outflows occurring nearly two-thirds of the time since the Index’s inception. Accordingly, large-cap stock has declined as a proportion of the Index from 32% in 2006 to just below 25%. In contrast, target-date funds have grown to represent 14.4% of overall Index assets (or more than 20% of assets in plans where they are available). Overall equity assets stand at 63.5%, which is slightly down from the first quarter. The purpose of the Callan DC Index is to understand the asset allocation, track fund flows and measure the performance of DC plans. The equally weighted index tracks cash flows and performance of nearly 80 plans, representing more than 800,000 DC participants and more than $100 billion in assets. It is updated quarterly and reflects 401(k) plans as well as other types of DC plans. Highlights of the index can be accessed at http://www.callan.com/research/dcindex/.
Most other DC investments saw net outflows during the quarter, with domestic large-cap, company stock and domestic small- to mid-cap particularly hard hit by outflows. However, turnover—which reflects net transfer activity levels in the DC Index—was modest during the quarter, coming in at 0.43% (about 60% of typical levels). This likely owes to the fact that participants typically do not react strongly to short periods of market weakness.
Domestic large-cap retains the biggest share of participant assets in the Index (24.3%). This asset class also has the distinction of having experienced quarterly net outflows more often than any other major asset class outside of company stock; with net outflows occurring nearly two-thirds of the time since the Index’s inception. Accordingly, large-cap stock has declined as a proportion of the Index from 32% in 2006 to just below 25%. In contrast, target-date funds have grown to represent 14.4% of overall Index assets (or more than 20% of assets in plans where they are available). Overall equity assets stand at 63.5%, which is slightly down from the first quarter.
The purpose of the Callan DC Index is to understand the asset allocation, track fund flows and measure the performance of DC plans. The equally weighted index tracks cash flows and performance of nearly 80 plans, representing more than 800,000 DC participants and more than $100 billion in assets. It is updated quarterly and reflects 401(k) plans as well as other types of DC plans.
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