Assets in defined contribution plans, mutual funds and other participant-directed funds will grow at a 10% to 20% compound annual growth rate from 2011 through 2015, according to projections from Financial Research Corp.
“While investors witnessed a significant drop in their retirement assets in one year, we did not see a mass exodus from the DC market, nor were there widespread redemptions,” Bob Hedges, FRC’s chairman, said in a statement about the asset-growth projection. “FRC believes that innovative new investment products will sustain DC market participation levels, and asset levels will be buoyed by conversion of DB assets into DC plans.”
The projections are contained in the FRC Monitor’s Strategic Planning report, an annual study designed to help the investment industry analyze asset trends and includes target-date funds, ETFs, subadvisory mutual funds, 529 funds and IRAs.
Among other funds, the statement said that drivers of ETF growth include expected wider institutional adoption, lower fees and tax efficiency compared to mutual funds. FRC sees mutual fund growth generated in multiple sectors, in both U.S. and international funds.
An FRC representative couldn’t be reached for comment or a breakout of the growth projections for each of the type of plans and funds.
Findings in the report are based on an analysis of FRC’s database of fund assets and net sales, third-party research, and publicly released industry white papers, the statement said.