Large, Small, International: Equity Portfolio Choices in a Large 401(k) Plan

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We examine equity portfolio choices of a panel of over four thousand 401(k) investors during the April 1994-August 1998 period. In the majority of participant/year observations all the equity funds available are held; hence, it appears that most participants take full advantage of the diversification opportunities within the plan. Older investors hold more U.S. large equities and less international equities, consistent with more conservative investment on their part. There is also a positive trend in allocations to domestic equities at the expense of foreign equities, consistent with a revision of mean return estimates over the sample.