PLANADVISER - September/October 2017 - 12

investment focus
Active Management Picks Up
Participants have not moved largely into passive funds
DATA from Strategic Insight Simfund
shows that 85% of the mutual fund
asset allocation in defined contribution
(DC) plans, excluding targetdate
and money market funds,
is in
actively managed funds. While passive
investing may be as popular as ever
across the industry as a whole, active
management retains a significant presence
in DC plans. Among the actively
managed mutual funds in DC plans,
56% of the assets are invested in U.S.
equity funds. Twenty-five percent are
in international equity funds, and 19%
are in fixed income.
On the passively managed side,
there is clearly a heavy weighting to
U.S. equity, with 75% of the assets in
passively managed funds
invested
in this asset class. Many investors,
both retirement plan participants and
managers of target-date funds (TDFs),
use index funds as their core portfolio
holdings, emphasizing this trend. A
mere 14% of the assets in passively
managed mutual funds in defined
contribution plans are invested in
international equity funds, and just
12% in fixed income.
Looking at flows into active vs.
passive over the trailing 12 months
ending with this year's second quarter,
the flows are largely evenly split, with
$13.9 billion being invested in actively
managed funds in DC plans, and $14.6
billion being invested in passively
managed funds.
However, looking at the individual
quarters, it appears that actively
managed funds may be coming into
favor again among retirement plan
participants. After redemptions of
$305 million from actively managed
funds in the third quarter of 2016
as well as $3.9 billion in the fourth
quarter, retirement plan participants
have been returning-in a big way-to
actively managed funds, investing $7.9
billion in them in the first quarter of
2017 and $10.3 billion in the second
quarter. -Lee Barney
DC Mutual Fund Asset Allocation
n U.S. equity
n International equity
n Fixed income
19%
14%
Active
25%
56%
Passive
75%
12%
* The aggregate data set used in this analysis represents $1.79 trillion,
or 44%, of the $4.07 trillion in total DC mutual fund assets.
Top 5 Categories, by DC Assets
n Active n Passive
12k
9k
6k
3k
-3k
-6k
-9k
-12k
-15k
Large growth
Large blend
Large value
DC Mutual Fund Net New Flows, by Quarter
n Active n Passive
$15m
$12m
$900
$600
$300
$0
Source: Strategic Insight Simfund
Q3'16
$-300
$-600
Immediate
long term
Foreign
large growth
Q4'16
Q1'17
Q2'17
Trailing 12 mos.
All data as of June 30, 2017
12 | planadviser.com september-october 2017
Net new flows ($mm)
Net new flows ($mm)

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PLANADVISER - September/October 2017

Table of Contents for the Digital Edition of PLANADVISER - September/October 2017

Onboarding New Clients
2017 Retirement Plan Adviser Survey
A Focus on the TDK Market
Reharvesting
Annuities in DC Plans
Keeping Them Happy
Laden With Student Debt
When Advisers Tout Their Own Services
PLANADVISER - September/October 2017 - Cover1
PLANADVISER - September/October 2017 - Cover2
PLANADVISER - September/October 2017 - 1
PLANADVISER - September/October 2017 - 2
PLANADVISER - September/October 2017 - 3
PLANADVISER - September/October 2017 - 4
PLANADVISER - September/October 2017 - 5
PLANADVISER - September/October 2017 - 6
PLANADVISER - September/October 2017 - 7
PLANADVISER - September/October 2017 - 8
PLANADVISER - September/October 2017 - 9
PLANADVISER - September/October 2017 - 10
PLANADVISER - September/October 2017 - 11
PLANADVISER - September/October 2017 - 12
PLANADVISER - September/October 2017 - 13
PLANADVISER - September/October 2017 - 14
PLANADVISER - September/October 2017 - 15
PLANADVISER - September/October 2017 - 16
PLANADVISER - September/October 2017 - 17
PLANADVISER - September/October 2017 - 18
PLANADVISER - September/October 2017 - 19
PLANADVISER - September/October 2017 - 20
PLANADVISER - September/October 2017 - 21
PLANADVISER - September/October 2017 - 22
PLANADVISER - September/October 2017 - 23
PLANADVISER - September/October 2017 - 24
PLANADVISER - September/October 2017 - 25
PLANADVISER - September/October 2017 - 26
PLANADVISER - September/October 2017 - 27
PLANADVISER - September/October 2017 - 28
PLANADVISER - September/October 2017 - 29
PLANADVISER - September/October 2017 - Onboarding New Clients
PLANADVISER - September/October 2017 - 31
PLANADVISER - September/October 2017 - 32
PLANADVISER - September/October 2017 - 33
PLANADVISER - September/October 2017 - 34
PLANADVISER - September/October 2017 - 35
PLANADVISER - September/October 2017 - 2017 Retirement Plan Adviser Survey
PLANADVISER - September/October 2017 - 37
PLANADVISER - September/October 2017 - 38
PLANADVISER - September/October 2017 - 39
PLANADVISER - September/October 2017 - 40
PLANADVISER - September/October 2017 - 41
PLANADVISER - September/October 2017 - 42
PLANADVISER - September/October 2017 - 43
PLANADVISER - September/October 2017 - 44
PLANADVISER - September/October 2017 - 45
PLANADVISER - September/October 2017 - 46
PLANADVISER - September/October 2017 - 47
PLANADVISER - September/October 2017 - A Focus on the TDK Market
PLANADVISER - September/October 2017 - 49
PLANADVISER - September/October 2017 - 50
PLANADVISER - September/October 2017 - 51
PLANADVISER - September/October 2017 - 52
PLANADVISER - September/October 2017 - 53
PLANADVISER - September/October 2017 - 54
PLANADVISER - September/October 2017 - 55
PLANADVISER - September/October 2017 - 56
PLANADVISER - September/October 2017 - 57
PLANADVISER - September/October 2017 - Reharvesting
PLANADVISER - September/October 2017 - 59
PLANADVISER - September/October 2017 - 60
PLANADVISER - September/October 2017 - 61
PLANADVISER - September/October 2017 - Annuities in DC Plans
PLANADVISER - September/October 2017 - 63
PLANADVISER - September/October 2017 - 64
PLANADVISER - September/October 2017 - 65
PLANADVISER - September/October 2017 - Keeping Them Happy
PLANADVISER - September/October 2017 - 67
PLANADVISER - September/October 2017 - Laden With Student Debt
PLANADVISER - September/October 2017 - 69
PLANADVISER - September/October 2017 - When Advisers Tout Their Own Services
PLANADVISER - September/October 2017 - 71
PLANADVISER - September/October 2017 - 72
PLANADVISER - September/October 2017 - Cover3
PLANADVISER - September/October 2017 - Cover4
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