Morningstar's John Rekenthaler talks about notable trends in the 401(k) industry and by extension, mutual funds in 401(k) plans, based off a Vanguard[profile] report called "How America Saves 2013."

Two trends that mutual fund companies should be aware of:

1) Traders are relatively inactive in mutual funds in 401(k) plans.

"For the full year of 2012, only 12% of Vanguard's defined-contribution participants made a trade. The 88% made no change to their allocations."

2) Good news for mutual fund companies: Target date funds are ruling the roost. Half of Vanguard's participants use target-date funds in some way. Many plan sponsors are selecting target date funds as a repository for automatically enrolled monies, Rekenthaler writes. At Vanguard, it's 90 percent.

See our sister publication, 401Wire for more coverage of the 95-page report. 

Edited by: Casey Quinlan


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