In its 11th annual Defined Contribution Trends survey, Callan reported that large-cap U.S. equity funds were the most replaced between the fall of 2016 and the fall of 2017.
Of the 152 plans that responded to the survey, about one-third of those that reported replacing funds did so for performance-related reasons. In 2016, about 47% said they replaced a manager due to performance. The report did not specify whether the changes made were from active to passive managers or vice versa, nor did it break out the splits between active and passive managers involved in the changes.
Meeting style boxes or filling a strategy gap in the plan lineup was the top reason among the surveyed plans when selecting a manager, followed by performance and fund expenses. Participant requests and brand of the manager were the least important attributes.
*The above percentages represent only those respondents that reported replacing a fund or manager, and multiple responses were allowed.
