- though the total allocation to stocks is pretty much the same, ordinary investors in DC plans have a much heavier weighting in domestic stocks - the potential for international diversification is much under-exploited
- pure fixed income seems to be much neglected by ordinary investors; instead there are huge dollops in DC plans of something odd and undefined (that I could find at least) called Stable value and the synthetic Target date funds.
- professional investors in DB plans take advantage of Private equity and Alternative investments, which ordinary investors cannot do easily, if at all
- the DC plans of ordinary investors have large piles of un-productive, idle cash, which the pros don't
- real estate is absent from DC plans of ordinary investors, again a missed diversification opportunity
Monday, 3 February 2014
Pension & Investments shows us what happens to asset allocation choices , reproduced below, when professional investors manage Defined Benefit pension plans versus ordinary investors doing it in Defined Contribution plans in the latest update for the largest US-based plans.
Posted by CanadianInvestor at 17:04
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