What is "Style Drift"?  

  • 401(k) and other plans offer participants a menu of investment alternatives.  
  • Participants are advised of the investment parameters (or style) followed by the fund manager, e.g., large cap growth.  
  • If, in practice, there is a marked deviation from the stated investment parameters (e.g., the manager begins following a “value" style), "Style Drift" may occur.  

Fiduciary Considerations  

  • Is the option still appropriate to include in the menu of investment alternatives?  
  • How does the style drift impact the menu? Does the menu still provide a broad array of diversified alternatives?  
  • Are participant communication materials (e.g., fund fact sheets) still accurate or do they need to be updated to reflect the style drift?