Voth Nixon Group demonstrates that the average pension savings contributor invests 53% in Index Fund

From: Voth Nixon Group
Published: Tue May 19 2015

Research groups noted that this percentage escalation has essentially doubled mostly as a result of the increasing notability of index-based target-date funds. The research undergone in "Behavioral Effects and Indexing" also concluded that the assets in funds handled actively and assets that are non-index related, such as capital market funds, steady value funds, and business stock, devalued substantially over a seven year span. The following encompasses the study’s conclusion:

"The progression in to index related investing is great news for investors who are gaining extensively diversified exposure to the market at a lower price, ultimately assisting individuals in acquiring additional revenue for retirement," said Dr. Smith Falkiner, principal author of the report and examiner at Boston Center for Retirement Analysis.

The study also found that long-term contributors kept 100% active portfolios, most probably due to the inertia effect; in other words, they never modified their investments. This "inertia effect" is prevalent among existing long-term investors, many of whom never change their primary allocations. Shorter-term investors usually hold 100% index portfolios mainly because they were automatically enlisted in plans with index related target date funds as the preferred investment.

"The study’s conclusions emphasize the pivotal role played by plan sponsors in the investment approach of participants," Dr. Smith Falkiner said. "Due to these behavioral effects, it is apparent that the sponsor’s choice will have a significant impact on the investment decisions made by their contributors."

About Voth Nixon Group

VOTH NIXON GROUP is a global asset administration group, managing capital for both institutional and retail investors across the world. Our aim is to provide solid fund performance across various asset types in which we know we have a viable competitive edge. At VOTH NIXON GROUP your goals are important to us. We understand the financial challenges that make it difficult to achieve your targets, and we’re qualified to provide the assistance you need. We believe your financial progress, regardless of your present situation or economic condition is achievable.

Address: International Commerce Center (ICC Tower), 1 Austin Road, West Kowloon, Tsim Sha Tsui, Hong Kong.

Company: Voth Nixon Group
Contact Name: KarlaZheung
Contact Email: marketing@vnxgroup.com

Visit website »