4 Out of 10 of the Largest Funds within 401ks are Indexes

November 1st, 2010
by Portico Wealth Advisors

A recent study by BrightScope shows that of the 10 largest funds featured in America’s collective 401k plans, 4 are index funds. That represents a large shift when compared to the predominantly active plan menus of the past.

What the study doesn’t cover are the fees associated with those 10 largest funds or the associated share classes of each. For the index funds, it is less relevant; statistically, passive alternatives at .5% are likely better than many of their active alternatives. However, passive alternatives at .1%, which are available through institutional share class providers like Vanguard, are even better.