This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Defined Contribution Tracker Launched By Northern Trust

In a period when equities performed better than other asset classes, defined contribution (DC) retirement plan participants reduced holdings in U.S. stocks and increased investment in low-yielding fixed income assets in 2012, according to a new tracking tool launched by the Defined Contribution Solutions group at Northern Trust.

Created to serve as a barometer for DC participant asset flows, Northern Trust’s “Defined Contribution Tracker” analyzes data from a universe of 85 retirement plans in the United States with daily valuation, representing approximately 1.5 million participants and $190 billion in market value, a subset of the total DC assets managed or serviced by Northern Trust.

In 2012, the tracker shows, participants lightened up on U.S. equity investments even as the Russell 3000 Index of U.S. stocks gained 16.4 percent for the year. U.S. equities remained the largest asset class at 31.1 percent of holdings, but fixed income saw inflows of 9.2 percent for the year despite lower yields, as DC investors looked for safe havens from volatility and uncertainty in the equity markets.

"Our tracker information, combined with market performance data, reinforces why it is important that DC participants stay the course to meet their long-term investment goals," said Jim Danaher, managing director of Defined Contribution Solutions at Northern Trust. "At the same time, we can see that more DC investors are participating in positive trends such as reducing their 'home country bias' by diversifying into international equities, and increasing allocations to target retirement date funds."

Target retirement date funds dominated asset inflows in the DC plans tracked by Northern Trust, growing from 11.9 percent to 14.6 percent of participant allocations during 2012. International equity, meanwhile, grew from 5.9 percent to 7.6 percent of allocations in the tracker universe.

"As the preferred qualified default investment of most DC plans, target retirement date funds have benefited from the increased adoption of auto-enrollment and other automated features, and we anticipate participant outcomes will show potential improvement through the use of these professionally managed investment solutions," said Susan Czochara, Senior Product Manager in Defined Contribution Solutions. "Investors are also taking advantage of the expanding investment universe through exposure to broader international equity benchmarks that incorporate the full ex-U.S. global equity opportunity set, further diversifying their sources of risk and return.”

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs