Growth equity investments made up 24.2% of U.S. equity investments in Pensions & Investments’ 100 largest corporate U.S. defined contribution plans. That was nearly twice the amount of value investments. Core U.S. equity investments made up the majority, with 62.4%.
In the short term, the tilt to growth has benefited defined contribution plan participants. The Russell 3000 Growth index outperformed the value index by 922 basis points in 2015. Over the long term, growth investments have meaningfully lagged value investments. For the 20-year period ended Dec. 31, 2015, value stocks outperformed growth stocks by 107 basis points.
One could question whether participants are capable of tactically moving between growth and value or should be given only core options.