Assets in such funds grew 70% in 2008, evidently moving directly out of equity mutual funds, whose assets in 401(k) plans shrank by 70%.
“Overall, we believe that plan sponsors should be heartened by the fact that most of their participants are treating their 401(k) accounts as long-term investments and staying the course,” says Eric Levy, retirement business leader at Mercer. “It is certainly understandable why some participants would move to some capital preservation funds, given the recent economic upheaval. In all likelihood, this will continue until the macroeconomic outlook improves.”
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