Skip to main content
logo

2023 Annual Conference

May 16–18, 2023

Palace Station Hotel & Casino, Las Vegas, NV, US

IMPORTANT NOTICE: The date, time, and room assignment of YOUR presentation is SUBJECT TO CHANGE.

Proposal authors can use this tool to see where they have been placed in the program agenda for an Oral or Poster Session.

Scroll down to search by the Submitter or Author Name, by Date/Time, or by Keywords.

Confirm your place in the schedule by following the instructionss that were emailed to you. Each presentation must have a separate paid registration. Contact the ACCI office immedicately by email at admin@consumerinterests.org to report any conflict, all corrections to the details of the presentation (including author names and the order they are listed as this is how it will be in the final program), or if you have any questions. Please be sure to reference the session title(s), date(s), and time(s) when you contact us.

D3c ESG Fund Allocations Among New, Do-it-Yourself Defined Contribution Plan Participants

Wednesday, May 17, 2023 at 2:00 PM–3:30 PM PDT
Room 3
Short Description

Investment strategies focused on Environmental, Social, and Governance (ESG) issues have been receiving increased interest among defined contribution (DC) plan sponsors, consultants, and regulators. This research explores the allocation decisions of 9,324 newly enrolled DC participants who are self-directing their accounts in a DC plan that offers at least one ESG fund. Our analysis suggests demand for ESG funds is relatively low, with ESG fund allocations and holding levels being lower than random chance would suggest. While there are some clear demographic preferences for ESG funds (e.g., among younger participants with higher incomes), ESG allocations appear to be primarily a function of weak preferences, driven by naïve diversification, although ESG allocations are significantly higher in plans where general ESG usage is more elevated. ESG funds have the potential to drive participants away from professionally managed investment options, such as target-date funds, resulting in lower risk-adjusted returns for participants, if they are simply added to core menus. Overall, this analysis suggests plan sponsors should take a thoughtful and cautious approach when considering adding ESG funds to an existing core menu.

Type of presentation

Accepted Oral Presentation

Submitter

Zhikun Liu, Employee Benefit Research Institute

Authors

Zhikun Liu, Employee Benefit Research Institute
David Blanchett, PGIM
Loading…