When it comes to outfitting their 401(k) plan menus, sponsors suffer no shortage of options.
According to Judy Diamond Associates’ recently developed Compass plan analytics tool, a premium add-on module that subscribers to JDA’s Retirement Plan Prospector can access, plan advisors and sponsors can select from a universe of more than 650 fund families with more than 7,000 fund options. JDA is a business unit of ALM Media, BenefitsPro’s parent company.
Eric Ryles, JDA’s managing director, says the Compass tool was designed with asset managers in mind, and allows them to track the penetration of their products, and their competitions’, with 401(k) plan sponsors.
The tool gleans data from 50,000 of the largest 401(k) plans representing 60 million plan participants, or 70 percent of all defined contribution participants, and 70 percent of all defined contribution assets, or nearly $2 trillion of retirement assets.
With the tool, asset managers can track exactly how many sponsors use their funds, total assets captured by each fund, the three-year growth or decline in use of the funds, and the percentage of a plan’s assets captured by a specific fund.
The JDA team designed an algorithm to streamline “dirty” fund data from Form 5500 filings with data from the Securities and Exchange Commission and Google. The upshot is a cleaner assessment of specific fund market share, according to an explanation by Ryles.
Four familiar fund families dominate the roughly $1.9 trillion in assets tracked by the Compass tool.
Vanguard funds top the list, with nearly $490 billion in total DC plan assets. Fidelity Investments is second, with more than $316 billion in assets, T.Rowe Price third with almost $143 billion in total assets, and American Funds fourth with about $104 billion.
Together, those four fund families account for more than $1 trillion in total plan assets, or more than half of the funds tracked by the tool.
Of the top 100 most popular funds, 28 are TDFs, which hold $272 billion in plan assets, or 35 percent of $774 billion in the top 100 funds.
While TDF penetration has held steady since 2012, the funds are capturing a greater percentage of wallet, or total assets in plans, which nearly doubled from 2012 to 2014, moving from 19 percent of plan assets captured to 35 percent.
Here is a list of the Top 10 funds, by assets, as determined by the new Compass tool and provided by JDA.
10. Vanguard Target Retirement 2025 Fund
With nearly $22 billion in assets under management in the plans tracked by Compass, the fund is designed for pre-retirees with about 10 years to retirement. Like its 2025 version, all assets are spread across four passively managed Vanguard funds. Its equity allocation is 65 percent.
9. Dodge & Cox International Stock Fund
At $22 billion in assets, the fund is one of six offered by Dodge & Cox. According to the firm’s website, the fund invests in non-U.S. companies, including those in emerging markets. Its 10-year return has been about 2.9 percent. The fund is currently closed to new investors.
8. Fidelity Spartan 500 Index Fund (Fidelity 500 Index Fund-Investor Class)
At $23.2 billion, the Spartan 500 Index Fund, which Fidelity recently renamed the Fidelity 500 Index Fund-Investor Class, is proof the long-time leader in active management is also looking to compete in the passive space.