Consultants Recommend Adding Non-Core Fixed Income Strategies to Custom Target-Date and Core Lineups to Diversify Portfolios, According to PIMCO Survey
NEWPORT BEACH, CA--(Marketwired - Apr 4, 2016) - Retirement plan consultants say that active management remains the favored investment approach for most major asset classes and target-date retirement strategies, according to the 10th annual PIMCO Defined Contribution Consulting Support and Trends Survey released by PIMCO, a leading global investment management firm.
More than three-quarters of the surveyed 66 consultant firms, which advise on over $4.2 trillion in DC assets, said active management is very important or important for U.S. and global bonds; emerging market and other non-U.S. equity; and U.S. small cap stocks. While just under a quarter of those surveyed said active management is important for U.S. large cap equities.
Consultants continue to recommend that plan sponsors diversify retirement portfolios and complement core bonds through allocations to investment grade credit, high yield, multi-sector and foreign bonds within the core menu and/or custom/white-label strategies.
Meeting participant income goals for retirement is the most important consideration for plan sponsors, according to the survey. Consultants suggest targeting overall income replacement of 80% of final pay, three-quarters of which may need to come from defined contribution plans.
"To achieve that goal, consultants are seeking investment management that will deliver sufficient returns and help manage risk," said Stacy Schaus, executive vice president and author of the survey. "This includes adding diversifying bonds and tapping into active management."
Other key findings:
About the Survey
PIMCO's DC Practice prepares the 2016 Defined Contribution Consulting Support and Trends Survey to help plan sponsors understand the breadth of views and specific consulting services available within the DC marketplace. Our 2016 survey captures data, trends and opinions from 66 consulting firms across the U.S., which serve over 11,000 clients with aggregate DC assets in excess of $4.2 trillion. For survey highlights or other PIMCO DC publications, please contact us at 888.845.5012, email us at pimcodcpractice@pimco.com or visit our web page at https://www.pimco.com/channel-content/defined-contribution.
About PIMCO
PIMCO is a leading global investment management firm, with offices in 12 countries throughout North America, Europe and Asia. Founded in 1971, PIMCO offers a wide range of innovative solutions to help millions of investors worldwide meet their needs. Our goal is to provide attractive returns while maintaining a strong culture of risk management and long-term discipline. PIMCO is owned by Allianz S.E., a leading global diversified financial services provider.
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Contact:
Agnes Crane
PIMCO - Media Relations
212-739-4212