Many defined contribution plans holding their sponsor company's own stock are getting an extra shot of volatility during a rough ride so far in 2020. Among the companies with 10% or more of their DC plan balance in their own stock, there's been an average decline of more than 30% so far this year. About 60% of those returns were below the broad-market S&P 500 index.
Costco Wholesale's plan had the largest allocation to company stock, according to data from Pensions & Investments' Research Center, with 43% of total DC assets. The "buy-in-bulk" strategy, something the company borrowed from its customers, paid off in 2020. The stock has outperformed the broad market by more than 25%, and only recently drifted into the red, likely as investors harvest their relative gains to buy other depressed assets.