OppenheimerFunds Survey Confirms "Home Bias" As Significant Factor for Underweight Global Allocations in Defined Contribution Plans

NEW YORK, March 12, 2012 /PRNewswire/ -- OppenheimerFunds, Inc. (OFI), a leading asset management company, today released the findings of a survey demonstrating that  "home bias" and a misguided belief that global and international investments carry greater risk than their domestic counterparts plays a major role in why defined contribution (DC) portfolios are so heavily underweight global investment products.

"Despite evidence that globally-focused portfolios will be necessary to achieve long-term growth, defined contribution plan participants in this country overwhelmingly overlook global and international investment products when constructing their retirement portfolios," said Kathleen Beichert, Senior Vice President and head of OFI's retirement group. "The world is more interconnected than ever and emerging economies are poised to grow faster than developed ones. Remaining rooted in outdated U.S.-centric strategies not only limits the potential opportunity to take advantage of such growth opportunities but also leads to a lack of diversification necessary to manage risk."

The OFI survey of 1,000 DC plan investors conducted by Aurora Market Research found that that many investors harbor a strong belief that investing overseas adds additional risk to their portfolios, with more than half (52 percent) of respondents citing political and market risks as their primary concerns. Adding to that, 60 percent of respondents were unable to state the difference between international investments (that include non-U.S. based companies but very heavily invested in foreign developed markets) and global investments (companies based anywhere in the world including emerging market opportunities). This is a key distinction when evaluating investment opportunities that lie beyond U.S. borders.

In general, the survey uncovered significant misperceptions about both U.S. and non-U.S. market performance. Fifty-seven percent of respondents incorrectly believed the U.S. equity market has consistently been the world's top performer between 1970 and 2000. In reality, the U.S. equity market only held the top position twice during that 30-year period.

"Exposure to global equities and fixed income opportunities could potentially mean the difference between accumulating enough assets and income for a secure retirement or falling short," said Brian Levitt, OFI's Economist and Head of Capital Market Research. "Our survey found 21% of respondents believe that changing their asset allocation, a likely outcome of learning about global investing, would help them reach their retirement goals."

For a copy of the OppenheimerFunds white paper containing the survey results titled "Globalization: A New Era for Defined Contribution Plans," please email:  [email protected].

About OppenheimerFunds, Inc.

OppenheimerFunds, Inc. is one of the nation's largest and most respected investment management companies. As of December 31, 2011, OppenheimerFunds, Inc., including subsidiaries, managed more than $168 billion in assets, including mutual funds having more than 11 million shareholder accounts, including sub-accounts.  Known for its tagline The Right Way to Invest, OppenheimerFunds, Inc. has been helping investors reach their financial goals since 1960. The Company and its controlled affiliates offer a broad range of products and services to individuals, corporations and institutions, including mutual funds, separately managed accounts, investment management for institutions, qualified retirement plans and sub advisory investment-management services.

Foreign investments (especially those in emerging and developing markets) may be highly volatile and involve additional expenses and special risks, including currency fluctuations, foreign taxes and political and economic uncertainties. The Fund's performance depends largely on the portfolio manager's skill in selecting the best mix of investments. The portfolio manager's evaluations and assumptions regarding the prospects of the global financial markets may be incorrect and the Fund's performance may be adversely affected by his asset allocation decisions. Diversification does not guarantee profit or protect against loss.

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