The average defined contribution plan's investments returned 8.7% in the first quarter, according to the Callan Associates, whose DC Index tracks net asset flows and plan performance.
However, comparable target-date fund performance was stronger with a 9.3% return for the quarter. The index uses an average 2030 target-date fund as comparable to the average age of DC participants and their corresponding target retirement date, said Lori Lucas, executive vice president and DC practice leader at Callan.
The average corporate defined benefit plan returned 6.8% for the quarter.
Target-date funds once again saw the greatest inflows, at about 77% of all DC flows — the greatest proportion in any quarter since the index's inception. Quarterly flows into target-date funds have averaged 41% since inception. It is also the first time assets in target-date funds, at 14.4% of total DC assets, have exceeded those in stable value funds, at 12.1%.
“Every quarter since inception in 2006, the flows have always been positive,” Ms. Lucas said. “It's hard to envision a scenario where it won't continue to grow.”
Large-cap domestic equity continues to have the largest allocation at 24.7%, but domestic equity has netted an average 19.9% quarterly outflow since inception. International equity, meanwhile, have averaged 9% quarterly inflows, second to target-date funds.
The Callan DC Index comprises nearly 80 DC plans, mostly 401(k) plans, with more than $100 billion in assets.