DC Plan Participants Investing in More Funds

May 18, 2011 (PLANSPONSOR.com) - On average, defined contribution plan participants included 5.3 funds in their accounts in 2011 -- nearly double the number (2.7) they chose in 1996, according to a new Spectrem study.

Spectrem said that while in part this reflects the increase over the same time period in the average number of funds plan sponsors offered, to 19.4 from 6.3, it’s also a sign that investors are increasingly focused on diversifying their retirement portfolios. Thirty-seven percent of participants cited diversification as the number one reason for using more funds today is diversification.  

In 2000 the average number of funds was 3.4 and as recently as 2005, participants were investing in 4.6 investment funds.  

In addition to an increase in the number of funds being offered, Spectrem attributed the growth in number of funds used to the increase in participant education efforts.  

More information is here.