Two-thirds of active U.S. equity assets are managed by defined contribution investment only managers, says a new joint report from FUSE Research Network and BrightScope.
According to the report titled DC Product Usage Trends: U.S. Equity Assets, the second in a series of research reports by the two research firms, domestic DC equity assets total nearly $470 billion.
The remaining one-third of equity assets are managed in-house by proprietary asset management units of the recordkeeper.
“Despite the movement toward packaged products like target-date funds, domestic equity offers significant opportunity for investment-only managers in the defined contribution space,” said Brooks Herman, BrightScope’s head of research, in a press release. “With nearly half a trillion dollars, of which two-thirds sits with third-party managers, we believe investment managers with a proven excellence in domestic equity mandates should be aggressively targeting DC opportunities.”
Small cap funds hold the largest percentage of market share versus their proprietary brethren with 80% of these assets. They are followed by mid cap funds, which hold 70%, and finally large cap funds, which hold only 63% of the large cap space.
While that looks bad for the large cap space, keep in mind that the large cap category accounts for aggregate assets nearly double that of mid and small cap combined, noted president Mike Evans of FUSE.
