One-third of the 106 defined contribution plans covered in Callan's 2019 DC plan survey replaced their non-U.S. equity funds last year, while about 24% replaced their small-cap U.S. equity managers. The consultant said the motive to change international equity options was less performance based as it was a move to adopt broader non-U.S. exposure, away from a developed market focus. Little information was provided on motives to change small-cap U.S. equity managers, but the authors did note that the asset class was also among the most replaced in 2018.
Large-cap U.S. equity funds had a relatively quiet 2018 compared to the year before. About 10% of the plans said they replaced these managers, while 50% of respondents said they changed their U.S. equity mangers in 2017.
Other related data in the survey noted that U.S. fixed income, U.S. small-cap and midcap and ESG funds were the fund types most added to DC plans.