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401k results no better with employer-driven mutual fund picks | BenefitsPro

While America’s employers would like to make the best choices to help their retirement plan participants, it turns out that making their own investment decisions doesn’t necessarily produce better results – and employees making their own decisions do no better, as well.

A new study from Boston College’s Center for Retirement Research demonstrates that mutual funds picked by plan sponsors did tend to fare a bit better than completely randomly selected funds.

But compared to passive index fund choices, which allow more hands-off investment options, the employer-directed mutual fund investments did not produce substantial gains.

What’s more, researchers Edwin Elton, Martin Gruber and Christopher Blake also found that participants who make their own mutual fund decisions also produced generally neutral results, versus deferring to passive index fund options.

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