In 2022, however, asset managers were dealt a bad hand, thanks to stock- and bond-market returns being joined at the hip.
Cash was a winner last year among significant allocations in the P&I universe, gaining 13.5% to $210.7 billion.
Investors' interest appears to be continuing this year.
"Today, we are more comfortable with investors holding cash than we have been in 20 years," wrote Phillip R. Nelson, the Boston-based partner and head of asset allocation for NEPC LLC, in a June 14 note to clients.
For DC investors, however, cash accounted for only 2.5% of the total assets last year, according to P&I data.
After cash, it was pretty much all downhill. Even cash's closest conservative cousin, stable value, dropped 10.1% last year to $352.8 billion in U.S. institutional, tax-exempt assets.
Mutual funds, commingled investment trusts and separate accounts all reported lower AUM. So did exchange-traded funds, which are only a sliver of institutional DC assets.
All equity allocations — domestic, non-U.S., global — suffered AUM declines in double digits regardless of whether they were used active or passive strategies. The results ranged from passive U.S. equity (down 14.8%) to active global equity (down 26.4%).
The largest fixed-income components — active U.S. and passive U.S. — were down 8.6% and 11.9%.
A smaller component — active global/non-U.S. fixed income – was down 14.9%. A tiny asset category — passive global/non-U.S. fixed income — was up 22%.
All of the largest asset managers experienced falling AUM.
First place Vanguard Group Inc. dropped 12.8% to $1.78 trillion. Second place BlackRock Inc. was off 16.3% to $1.16 trillion. Fidelity Investments held onto third place despite a 17.6% slide to $987.8 billion.
State Street Global Advisors moved into fourth place from fifth place last year only because its AUM decline was less than the AUM plunge for T. Rowe Price Group Inc. State Street Global Advisors AUM fell 9.6% to $555 billion. T. Rowe Price's AUM sank 21.8% to $542.7 billion.
Among the largest asset managers, the exception was Empower Investments, which jumped to 11th place from 22nd. Assets climbed to $137.7 billion from $66.1 billion, primarily due to its April 2022 acquisition of Prudential Financial's retirement plan business, Stephen Gawlik, an Empower spokesman, wrote in an email.