Callan DC Index Off to Best Start Ever

We recently published the latest data for the Callan DC Index™ , which tracks performance, asset allocation, and cash flows of over 90 large defined contribution plans representing approximately $150 billion in assets.

(Estimated reading time: 1 min 33 sec)

Highlights for the quarter (data as of 6/30/2017):

  • The Callan DC Index™ returned a healthy 3.06% during the second quarter, reflecting strong equity market performance. The Index is now up 7.87% year-to-date—its strongest first-half performance since its 2006 inception.
  • However, the Index trailed the typical Age 45 Target Date Fund (TDF), which gained 3.65% in the second quarter and 9.42% in the first half.
  • Plan balances rose 3.19%; return growth accounted for 3.06% of that and inflows (plan sponsor and participant contributions) the rest.
  • The proportion of net flows into non-U.S. equities during the quarter was the highest since late 2007. Money primarily flowed out of stable value, U.S. small/mid cap equity, and company stock. As usual, TDFs attracted the lion’s share of net flows, with 69 cents of every dollar of flows moving into these funds.
  • Index turnover (i.e., net transfer activity levels within DC plans) came in at 0.43% in the second quarter, compared to the historical quarterly turnover level of 0.63%.
  • The DC Index’s overall equity allocation edged up from last quarter to nearly 70%, slightly above the Index’s historical average of 67%.
  • U.S. large cap accounted for 23% of DC Index assets; TDFs dominate, accounting for 29.8% of assets.
  • And when offered, TDFs account for 33% of plan assets.