According to the Callan DC Index, asset flows into TDFs dominated last year, at the expense of large, small and mid-cap equity funds and company stock. The equally weighted index, based on 79 plans with $100 billion and 800,000 participants, showed that TDFs took in 63% of net inflows for the year and had 15.7% of total DC assets overall, compared with 23.3% in large cap funds and 12.4% in stable value. In Q4 2012, domestic large cap funds saw outflows of -45%, followed by domestic small and mid-cap funds at -28.8% and company stock at -22.6%. Account balances rose 14.32%, primarily due to investment returns, according to Callan.
While not surprising, Callan predicts that TDFs could grow even more in DC plans if more plans re-enroll or map all assets into TDFs – fewer than 10% of plans use re-enrollment right now.
