Comparing Asset Allocations: Fund Investors Versus Pension Plans

Their aggregate decisions aren’t so very different.

John Rekenthaler 10 February, 2020 | 9:00
Facebook Twitter LinkedIn

For Comparison's Sake
Dumb mutual fund investors were once the media rage. Hand-wringing articles carped that their collectively poor decisions would hurt other market participants, because newbie 401(k) shareholders would panic when the next downturn arrived. Their mass redemptions would spark further stock-price declines.

Now that financial writers' attention has switched to indexing, the articles have abated. Nonetheless, the perception remains: Retail shareholders are markedly less successful than their institutional rivals. That's a difficult proposition to test, because while many institutional funds publish their investment results, individuals do not. However, if we can't score the outcomes, we can at least assess the processes, by evaluating each group's aggregate asset allocations.

My sources are Morningstar Direct, which contains the allocations for mutual funds and exchange-traded funds, and the data compiled on state and local pension plans by National Association of State Retirement Administrators. To be sure, there are many forms of institutional investing besides state and local pensions, but NASRA's database should serve as a useful proxy.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Member.

Register For Free
Facebook Twitter LinkedIn

About Author

John Rekenthaler  is vice president of research for Morningstar.

© Copyright 2021 Morningstar Asia Ltd. All rights reserved.

Terms of Use        Privacy Policy