Defined contribution plans contributed an estimated $60 billion in cash flows to the mutual fund industry in 2000, a new report by Strategic Insight and NewRiver said.
Defined contribution plan assets in mutual funds, including variable annuities, totaled more than $1.2 trillion at the end of 2000, accounting for 19% of total fund assets, up from 15% in 1994, the study estimated. Mutual funds remain the preferred vehicle for defined contribution investments, with 46% of defined contribution assets invested in mutual funds.
The five largest investment managers in the defined contribution business last year were Fidelity, Vanguard, American Funds, Putnam and Janus. Fidelity was the largest mutual fund investment adviser in the defined contribution business, with close to $290 billion in its funds last year. Janus attracted the highest cash inflows, about $14 billion, or 35%, of its overall company mutual fund flows last year. Together, the top five firms controlled nearly $570 billion in assets and took in some $40 billion in 2000, excluding variable annuities, the study stated.