According to a recent report by Brightscope, small cap funds account for 3.76% of DC plan assets. As with many asset classes in DC plans, index funds top the list, with T. Rowe Price and Vanguard’s record keeping platform giving them a clear advantage. The top 12 small cap funds include:
Vanguard Small Cap Index
BlackRock Russell 2000 Index
Vanguard Explorer
AllianzGI NFJ Small Cap Value
SSgA Russell 2000 Index
T. Rowe Price New Horizons
T. Rowe Price Small-Cap Stock
Lord Abbett Small-Cap Value
American Beacon Small Cap Value
T. Rowe Price Small-Cap Value
Vanguard Small Cap Growth Index
Northern Trust Russell 2000 Equity Index
Brightscope analyzed data based on a universe of $2.92 trillion in assets representing more than half of all DC plan assets.
Indexing makes more sense for certain asset classes — for example, only 23% of active U.S. large cap funds beat their index over the last five years. Small cap funds can experience greater returns than other classes, but they may take greater risk and can have capacity issues. The question for advisors with small cap funds is whether bigger is better.
