Callan DC Index up 5% in 1Q17

We recently published our 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, 17 sec)

Highlights from the quarter (data as of 3/31/17) include:

  • DC plans benefited from strong market performance during the quarter. The Callan DC Index™ climbed 4.67%, its highest quarterly return since the end of 2013.
  • While performance for the quarter was strong, the DC Index did markedly lag the average comparable target date fund. This owes to lower equity allocations within the Index–particularly around emerging market and developed international equity.
  • Average equity allocations:
    • 76% for the Age 45 Target Date Fund (of that, 20.1% to non-U.S. and 5.2% to emerging market equities)
    • 69% for the average DC plan (5.2% non-U.S. and 0.3% emerging market equities)
  • TDFs attracted over 88 cents of every dollar that moved within DC plans. When TDFs are held within a DC plan, they now account for 32% of plan assets.
  • Compare this to the next largest plan holding, U.S. large cap equity funds, which account for less than 23% of plan assets. In 2006, U.S. large cap equity accounted for more than 30% of the average plan’s assets.

Those interested in DC data can learn more about our other online data tool, the Target Date Index, in this blog post.