The Markets April 28, 2025

Nasdaq-100 Underrepresented in 401(k) Plans

A survey by Shelton Capital Management showed that allocations to Nasdaq-100 Index mutual funds make up fewer than 1% of all 401(k) assets.

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Although a majority of 401(k) plan participants express that they would like access to a Nasdaq-100 product as an investment option, very few 401(k) plans actually offer it.

In the Annual Nasdaq-100 Retirement Plan Survey, conducted by Shelton Capital Management, nearly 80% of 401(k) participants surveyed recognized the importance of investing in a Nasdaq-100 product within their retirement plan. The Nasdaq-100 Index includes 100 of the largest domestic and international non-financial companies listed on the Nasdaq stock exchange, based on market capitalization.

However, based on figures from more than 7,000 401(k) plans, allocations to Nasdaq-100 Index mutual funds make up fewer than 1% of all 401(k) assets—a significant underrepresentation compared with the S&P 500 Index and other large-cap growth indexes, according to BrightScope Beacon.

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The Annual Nasdaq-100 Retirement Plan Survey included responses from 1,000 401(k) participants, reflecting the 2023 U.S. Census data for gender, age range and region. The survey was fielded between February 10 and February 14, 2025.

According to Morningstar, the Nasdaq-100 Index has given investors access to tech-driven brands, “transforming industries and the global economy,” for 40 years and has amassed more than $300 billion in assets tied to the index.

The Investment Company Institute also reported on March 25 that Americans held $12.4 trillion in employer-sponsored defined contribution plans, as of December 31, 2024, of which $8.9 trillion was held in 401(k) plans.

In the Shelton Capital Management survey of 401(k) plan participants, 45% said they already possess a product that tracks the Nasdaq-100 within their portfolios, but 35% said they were not sure which specific funds of the Nasdaq-100 they were holding. In addition, about half of respondents said they did not know what the Nasdaq-100 Index was and what companies are included in the index.

The majority of investors said the “long-term, superior track record” of the Nasdaq-100 Index is what attracts them most to it as an investment option. Regarding in which companies participants reported being most interested in investing, 60% said Amazon was most important to them, followed by Apple (58%) and Microsoft (50%).

Meanwhile, participants did express some concerns about trading fees, as 45% said they are most worried about brokerage fees.

Having access to the Nasdaq-100 Index within their 401(k) plan was considered important to survey respondents, but to a varying degree: 35% said it was somewhat important, and 18% said it was extremely important.

“From 1994 through the end of 2024, the S&P 500 returned over 2,000%, while the Nasdaq returned over 6,000%,” Shelton Capital Management CEO Steve Rogers said in statement. “This was a great risk/return trade-off for the additional volatility. For investors comfortable with the additional risk inside of their 401(k) account, owning funds tied to this benchmark was a great way to build wealth.”

Products & Services April 28, 2025

Moody’s and MSCI Partner for Private Credit Risk Modelling Tool

The solution integrates MSCI private capital data with Moody’s EDF-X credit risk modelling tool.

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MSCI and Moody’s Corporation have partnered to launch an offering that assesses risks for private credit investments.

The solution integrates MSCI private capital data with Moody’s EDF-X credit risk modelling tool.

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MSCI said the new solution leverages consistent, independent probability of default (PD) scores and implied ratings for deeper risk insight across funds, sectors and geographies.

It also delivers credible, transparent credit risk metrics to boards, regulators and investors and support decision-making with insights backed by the independent methodologies, MSCI said.

The two firms said the solution “will be distinct from the services provided by Moody’s Ratings, the credit rating agency, to the issuers in the private credit market.”

MSCI is supplying data on more than 2800 private credit funds and 14,000 underlying companies.

The solution will also produce early warning signals that flag potential credit deterioration, macro-adjusted PDs incorporating both climate and economic factors, and loss given defaults at the facility level.

“As the private credit market evolves, investors are looking for trusted independent assessments to help benchmark credit risk and inform investments and monitor portfolios,” Moody’s chief executive Rob Fauber said.

“Our partnership with MSCI will play a critical role in providing these insights, helping market participants make informed decisions.”

MSCI chief executive Henry A. Fernandez said the rapid growth of private credit continues to transform the global investment landscape while highlighting the need for increased transparency, consistent standards and independent risk assessment.

This article originally appeared in our sister publication, Financial Standard.

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