PLANADVISER - September/October 2018 - 10

investment focus
Active Management Still Key
The strategy accounts for $1.47 trillion of DC plan investments
DC Mutual Fund Asset Allocation, Q2
E
ighty-six percent, or $1.47 trillion
of the $1.69 trillion invested
in defined contribution (DC)
plans-excluding what resides in lifecycle
and money market funds-is
invested in actively managed funds,
with the remaining $226 billion in
passively managed funds, according
to data from Strategic Insight Simfund
as of June 30. Despite all the noise
about retirement plans turning en
masse to passively managed funds,
the data suggest that active management
retains a critical role.
Among the actively managed
mutual funds in DC plans, 55% of the
assets are in U.S. equity funds. Twentyfive
percent are in international equity
funds and 20% in fixed income.
On the passively managed side is
an even greater weighting toward U.S.
equity funds, with 75% of the assets
invested there. This may be because
many retirement plan participants
and the managers of target-date
funds use U.S. equity index funds as
their core holdings. Another 15% of
passively managed funds is in international
equity funds, and 10% is in
fixed income.
The Trailing 12 Months
Although, for the trailing 12 months
as of a year ago June 30, the flows
into actively managed and passively
managed funds were essentially evenly
split, for the trailing 12 months ending
this June 30, investors resoundingly
favored actively managed funds, with
$56.2 billion going into them, and a
mere $2.2 billion moving into passively
managed funds.
Looking at the individual quarters,
actively managed funds held their own
in each, with the greatest amount,
$15.9 billion, being poured into the
funds in the first quarter of this year.
In fact, passively managed funds saw
outflows of $60 million in the third
quarter of last year and $2.9 billion in
the fourth quarter. -Lee Barney
20%
15%
Active
Market Share
25%
55%
75%
Passive
Market Share
10%
l U.S. equity
l International equity
l Fixed income
DC Mutual Funds, Quarterly New Flows
New flows ($mm) excludes TDFs and money market funds
n Active n Passive
$60,000
$50,000
$40,000
$30,000
$20,000
$10,000
$0
-$10,000
Q2 2017
Q3 2017
Q4 2017
Q1 2018
Q2 2018
Top 5 Largest DC Categories-
Active vs. Passive, Trailing 12-Month Net New Flows
Net new flows ($mm)
n Active n Passive
$25,000
$20,000
$15,000
$10,000
$5,000
-$5000
-$10,000
Large growth
Large blend
Source: Strategic Insight Simfund
Intermediateterm
bond
Large value
Foreign large
growth
All data as of June 30.
12-month
10 | planadviser.com September-October 2018

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PLANADVISER - September/October 2018

Table of Contents for the Digital Edition of PLANADVISER - September/October 2018

Valuable Partnerships
Pension Risk Transfer
How to Explain CITs to Sponsors
Open MEP Opportunities
Appropriate Benchmarking
Investigations Intensify
PLANADVISER - September/October 2018 - Cover1
PLANADVISER - September/October 2018 - Cover2
PLANADVISER - September/October 2018 - 1
PLANADVISER - September/October 2018 - 2
PLANADVISER - September/October 2018 - 3
PLANADVISER - September/October 2018 - 4
PLANADVISER - September/October 2018 - 5
PLANADVISER - September/October 2018 - 6
PLANADVISER - September/October 2018 - 7
PLANADVISER - September/October 2018 - 8
PLANADVISER - September/October 2018 - 9
PLANADVISER - September/October 2018 - 10
PLANADVISER - September/October 2018 - 11
PLANADVISER - September/October 2018 - 12
PLANADVISER - September/October 2018 - 13
PLANADVISER - September/October 2018 - 14
PLANADVISER - September/October 2018 - 15
PLANADVISER - September/October 2018 - 16
PLANADVISER - September/October 2018 - 17
PLANADVISER - September/October 2018 - 18
PLANADVISER - September/October 2018 - 19
PLANADVISER - September/October 2018 - 20
PLANADVISER - September/October 2018 - 21
PLANADVISER - September/October 2018 - 22
PLANADVISER - September/October 2018 - 23
PLANADVISER - September/October 2018 - 24
PLANADVISER - September/October 2018 - 25
PLANADVISER - September/October 2018 - 26
PLANADVISER - September/October 2018 - 27
PLANADVISER - September/October 2018 - 28
PLANADVISER - September/October 2018 - 29
PLANADVISER - September/October 2018 - 30
PLANADVISER - September/October 2018 - 31
PLANADVISER - September/October 2018 - 32
PLANADVISER - September/October 2018 - 33
PLANADVISER - September/October 2018 - 34
PLANADVISER - September/October 2018 - 35
PLANADVISER - September/October 2018 - 36
PLANADVISER - September/October 2018 - 37
PLANADVISER - September/October 2018 - 38
PLANADVISER - September/October 2018 - 39
PLANADVISER - September/October 2018 - 40
PLANADVISER - September/October 2018 - 41
PLANADVISER - September/October 2018 - 42
PLANADVISER - September/October 2018 - 43
PLANADVISER - September/October 2018 - 44
PLANADVISER - September/October 2018 - 45
PLANADVISER - September/October 2018 - 46
PLANADVISER - September/October 2018 - 47
PLANADVISER - September/October 2018 - Valuable Partnerships
PLANADVISER - September/October 2018 - 49
PLANADVISER - September/October 2018 - Pension Risk Transfer
PLANADVISER - September/October 2018 - 51
PLANADVISER - September/October 2018 - How to Explain CITs to Sponsors
PLANADVISER - September/October 2018 - 53
PLANADVISER - September/October 2018 - Open MEP Opportunities
PLANADVISER - September/October 2018 - Appropriate Benchmarking
PLANADVISER - September/October 2018 - Investigations Intensify
PLANADVISER - September/October 2018 - Cover3
PLANADVISER - September/October 2018 - Cover4
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