Emerging market equities gain little traction in DC plans [infographic]

September 29, 2014 at 11:45 AM
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As of June 30, a surprisingly low 0.3 percent of defined contribution plan assets were directly invested in emerging market equity strategies. And only 6.6 percent went into non-U.S. equity strategies (not inclusive of target date fund allocations).

So reports Callan Associates in its DC Index, which tracks equal weighted performance and cash flows of defined contribution plans. The index encompasses more than 800,000 plan participants and $100-plus billion in assets.

Here's a recap of asset allocation of DC plans by fund type:

The low adoption by DC plans notwithstanding, emerging market equities account for a sizable share of global equities. Currently, more one-third (36 percent) of global gross domestic product is represented by emerging markets funds. And more than half (51 percent) of the world's estimated economic growth through 2019 will come from emerging economies, according to Morningstar and the IMF.

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