Skip to content

Wayne State University

Aim Higher

Mar 5 / Cheryl Deep

Hold a Brain in Your Hands: Brain Day at Wayne State

Students, researchers, and children will learn about the exciting work that neuroscientists at Wayne State University do when they attend Brain Day at the Michigan Science Center on March 15. Attendees will be able to meet neuroscientists, learn about their labs, and even hold a human brain.

What better time to showcase our neuroscientists and the important research they’re doing at the Institute of Gerontology:

naftaliDr. Naftali Raz is Director of the Lifespan Cognitive Neuroscience Program at the Institute of Gerontology. His Cognitive Neuroscience of Aging Lab focuses on:

-Age-related changes in the brain’s structure and function
-The impact of aging on learning, memory, and reasoning skills

Dr. Raz studies how the brain changes with age and how these changes are related to changes in memory and problem-solving skills in older adults. Since 2001, his lab has been conducting a long-term longitudinal investigation into normal brain aging. Using MRI, his team analyzes changes in brain structure in healthy adult volunteers age 18 to 90. They also study age-related differences in cognitive abilities such as memory, problem solving and spatial navigation. Since 2005, a large portion of Dr. Raz’ work has been funded through a multi-million dollar MERIT (Method to Extend Research in Time) award from the National Institute on Aging.

The award, given only to researchers with consistently high research achievement, allowed Dr. Raz to concentrate on his Neural Correlates and Modifiers of Cognitive Aging project for 10 years without the need to continue to apply for funding. Dozens of research papers have resulted from this investigation, which continues to track the effects of vascular risk factors like hypertension, and genetic modifiers like the ApoE E4 gene variant on changes in the brain and cognition among healthy adults.

 

ofen lab MRIDr. Noa Ofen founded the Ofen Lab which focuses on:

-The development of basic cognitive abilities, learning and memory
-Changes in brain structure and function between childhood and young adulthood

Dr. Ofen studies the neural underpinnings of learning and memory in children, adolescents and adults. Research in her lab combines tests of cognitive abilities with neuroimaging techniques to probe how brain structure and function shape human cognitive functioning across development. In particular, she has worked to explore the structure and function of a small but powerful sliver of brain tissue crucial to memory: the hippocampus. Recent work from the Ofen Lab identified robust differences in the structure of the hippocampus from childhood to adulthood.

Her work to-date, and as a post-doctoral associate at MIT, investigated structural and functional brain development in a wide age range of typically developing children and young adults. At WSU her research is expanding to include the study of atypical brain development which underlies the emergence of many psychiatric disorders. The structure and function of the hippocampus, for instance, is altered in a number of psychiatric disorders with a developmental course, making Dr. Ofen’s research well positioned to address clinically significant questions. She recently received honors from the Society of Biological Psychiatry where she chaired and presented a symposium highlighting the importance of her work to the study of schizophrenia.

 

jeskeDr. Jessica Damoiseaux is new to the Institute of Gerontology from the Netherlands and founded Connect Lab that focuses on:

-Structural and functional brain changes in healthy older adults
-Early detection of Alzheimer’s Disease

Dr. Damoiseaux came to WSU from Stanford University in April. She arrived with a grant from the Netherlands Organization for Scientific Research to conduct a four-year study into functional and structural brain connectivity changes in healthy older adults (age 55 to 75), some who are complaining of memory problems and some who are not. People who report cognitive problems – despite tests that do not show an obvious cause – are five to six times more likely to develop dementia than people who report no problems. Dr. Damoiseaux wants to understand the correlation. “That initial subjective awareness of cognitive impairment might be our earliest indicator,” she said. If imaging can uncover these precursors, early interventions to slow or stop the dementia might be possible.

Attend Brain Day at the Michigan Science Center on March 15 to learn more about the brain with topics focusing on addiction, development and aging, and head safety.

The event is free with paid general admission to the center, and coincides with the Dana Alliance for Brain Initiatives’ Brain Awareness Week, March 10-16, a global campaign to increase public awareness of the progress and benefits of brain research.

The Michigan Science Center is located at 520 John R Street in Detroit.

 

Feb 6 / Carrie Leach

IOG Insider: Post-Doctoral Fellow Heather Fritz

What brought Ms. Fritz to the IOG: Heather Fritz completed her PhD from the University of North Carolina at Chapel Hill in March 2013 before joining the IOG in August 2013. Heather is a Post-Doctoral Research fellow working under the mentorship of Drs. Cathy Lysack and Mark Luborsky and was attracted to the IOG because of the culture of autonomy, scholarship, and collaboration. Heather is also an occupational therapist with expertise in adult and geriatric populations. Heather’s work focuses on addressing the challenges of illness self-management and health promotion in low income and minority population. In particular she is interested in how individuals with diabetes become better self-managers through time, and the role of habits, routines, social and cultural context, and daily occupations in the process.

Hobbies: When Heather is not working on her research she enjoys cycling, cooking, and spending time with friends and family. She is also a mother of a very handsome Doberman Pincher.

Interesting Facts: Heather initially attended Ohio State as a veterinary medicine major (with agricultural construction as a minor) and later dropped out of Ohio State and started a small landscape design company which she ran for a few years before moving to NC.

Work: Heather has worked some very interesting jobs including: working on the carnival and in food trucks while in high school, as a bus driver while at Ohio State, and as a parking enforcement office (writing parking tickets) while at UNC.

Travel: Heather lived in Monterrey Mexico in 1999 while studying at ITESM and is still (fairly) fluent in conversational Spanish and enjoys all things Latino and Hispanic especially food, music, and dance. She Recently traveled to Denmark and Sweden where she spent time with faculty and PhD students at University of Southern Denmark and Lund University. We may have lost her in the canal had it not been for this sign!!!

heather fritz w sign for blog

To learn more about Heather visit her profile page @ http://www.iog.wayne.edu/profile/heather.fritz/ or email her @ heather.fritz@wayne.ed

Jan 9 / Carrie Leach

Link between Falls and Self-Rated Health in Older African-Americans

rb_IOG_MPSI_091412_066

Reporter Jeanette Brown of ElderBranch interviewed Institute of Gerontology Deputy Director, Dr. Cathy Lysack (pictured), to discuss her paper, “Falls efficacy and self-rated health in older African American adults,” which she wrote along with Dr. Chad Tiernana of Husson University and Dr. Stewart Neufeld, Dr. Allon Goldberg, and Dr. Peter A. Lichtenberg of Wayne State University.

Why did you decide to study falls, falls efficacy, and self-rated health in older African Americans. Why is this important? 

Falling in general is really important to older adults because we have a fair bit of evidence now that older adults fall quite a bit. Of community-dwelling adults over the age 65, about one in three falls every year on average. That’s a lot of falling. So it is really a very serious problem. And for a small number of older adults, it’s that step into a downward spiral where the serious fracture means a hospitalization, and then that immobility coupled with maybe a series of other health conditions makes it really difficult to get back out of the hospital and certainly out of the hospital in as independent a mobile state as everyone would like. So it’s a big issue period, and it is understudied – like so many issues – in ethnic minorities.

While it is true that African-Americans who fall are less likely to have a hip fracture compared to their elderly white counterparts, we still don’t know much about the stats and facts of ageing for this group. And, in particular, we know very little about this very interesting dimension of falls efficacy, which is our confidence in our ability not to fall. So it was worthy of study.

Please describe your study. What methods did you use in order to achieve meet your objectives?

We used a telephone survey methodology. Here at our Institute of Gerontology at Wayne State University we have a large number of older African-Americans who are research volunteers that come from the community, so we did a sample from our database of seniors in the Detroit area, and then we had a trained set of older adults themselves conduct the telephone data collection interview.

What were your key findings?

Well, one key finding was that approximately one quarter of our sample reported falling within the past year. That wasn’t very different from the national numbers. It was a bit lower, which is good, since no one wants older people to fall.

That said, our second major finding was how high their confidence was in not falling. That was rather curious. How can you have these two things go together?

What conclusions did you draw from that or what further questions did it raise?

It is known in general that there is an optimism in survey results gathered from older African-Americans. It is not always present, but often compared to white samples there is a stronger sense and stronger reporting from this group that things are “alright.” So at one level it wasn’t really surprising.

What was even more important, though, was to look at the linkages between the self-reported health of the people responding and how that figured into falls efficacy and actual falling. What was surprising to us – you might expect that people who report poor health are the fallers, for example – but that isn’t what we saw.

However, we saw that people who had poor self-rated health also were the folks with the lowest confidence in their ability not to fall. So, in other words, people who were not particularly well physically had low confidence. And that is what you might expect – maybe they know they are a little bit unstable. But this is really important because when people are not well, particularly when they lack confidence in their walking, they tend to do it less. That is a real problem because when you walk less, exercise less, you get less fit. And if you are less fit, you are more likely to fall. There is a spiral effect that we really need to better understand so we can stop it.

Would you make any specific recommendations to nursing homes or others who are working with older African-Americans as result of your findings?

The most important thing I would stress is how important it is to remain as physically strong in your lower extremities as you can for as long as you can. My background is occupational therapy, and I work closely with colleagues in physical therapy. One of the prime therapeutic things that we focus on in those settings is making sure that the ambulation and transfers from bed to chair to toilet to shower, etc. is safe. Again, the stronger, in particular, your quadriceps are – those muscles that you use in squatting down, standing up, squatting down – those muscles are so, so, so important. If individuals need assistance with walking, we need to give it to them. Because lying in bed is really, really bad for you and sitting is bad for you.

Short story: exercise, walking, and maintaining quad strength are incredibly important. When you think of the biomechanics of walking, the first motion is flexing at the hip. So there are tiny little muscles in the groin area that cross the hip bone that begin the step, and that lifts up the knee. But then all of the weight of the motion of walking is shared right across the top of the thigh and over an insertion into the front of the knee. That big, long strap muscle needs to be strong or you see the stumbles and the shuffling and the falling forward, which is the typical injurious fall.

What are the next steps to further your work in this area?

A big question is whether or not we can modify confidence. We have just been talking about modifying physical activity in a positive sense, i.e. doing more exercise and being more fit and strong and having more balance. But an interesting question is what about modifying our confidence not to fall? Could that actually be beneficial?

Could we do something with older adults that would enhance their self-confidence, which in turn would lead to participating more in physical activity and walking. Again, this is because of this fear of falling leading to falling negative spiral that I talked about earlier. We don’t know the answer to that right now, but there is a lot of interest by researchers to see if there can be particular skills training that will boost confidence. Because if you are more confident you’ll go out and walk, and if you’re not confident you may not.

Are there other things that came up in the course of this study that you want to highlight? Things that surprised you or were particularly noteworthy?

Yes, I would say one more thing. There is this question that researchers use all of the time with older adults and other people, this so-called self-rated health question. Basically, it’s where you ask an individual how they would rate their health today and they have five choices: poor, fair, good, very good, and excellent.

We asked that question in our study, like many other researchers have, and it was just a reminder once again how powerful that one single question is and how correlated one’s self-rated health is with other things like depression, physical activity, and even more global questions of life satisfaction and well-being. We talked about it on our research team, and we’ve come to the conclusion that clinicians should really ask this question in practice much more often than they do.

Often you are doing a thorough particular assessment of walking or balance or strength – but even getting an answer from an older adult that falls into one of those categories, we now know from the scientific literature how tightly that answer is related to other important health outcomes. So we would really like to encourage clinicians – whether they are occupational therapists, physical therapists, nurses, physicians – just one quick question can really highlight a group that may be at risk. It is very, very telling when older adults slide down from very good to good and into fair. The curve just dips so, so significantly. So we need to really work at having “excellent” be the response people give when asked to rate their own health.

Cathy Lysack, Ph.D., OT(C), is the deputy director of the Institute of Gerontology and a professor of occupational therapy and gerontology at Wayne State University in Detroit, Michigan. An occupational therapist by profession, she received her Ph.D. from the University of Manitoba, in Winnipeg, Canada, and joined Wayne State as an assistant professor in 1997. Her major research interests include the social and environmental influences on health and understanding how older adults and people with disability redevelop active and meaningful lives in the community after illness and injury. She has studied aging and depression, the independence and safety of older adults who live alone, the impact of spinal cord injury on community participation, mobility loss after hip fracture, and downsizing residential moves in later life.

Questions or comments? Contact Jeanette @ jeanette@elderbranch.com or @ (551) 655-3079.

Dec 9 / Carrie Leach

Institute of Gerontology Research Report

 

large 2012 & 2013 Report cover 700 pixels

Nov 13 / Theresa Russo

November is National Alzheimer’s Disease Awareness Month and National Caregiver Month

The prevalence of Alzheimer’s disease today is unprecedented in human history. Presently, more than 5 million Americans have a diagnosis. In Michigan alone, roughly 180,000 individuals are living with memory loss. Approximately every 68 seconds, someone develops the disease. By 2050, the numbers are projected to increase to between 11 and 15 million nationwide. Alzheimer’s disease is the 6th leading cause of death in the U.S., and it is the only cause among the top 10 that cannot be prevented, slowed, or cured.

The cost of Alzheimer’s disease is high. This year in the United States, we will spend more than $200 billion caring for people  with Alzheimer’s or another dementia. Unfortunately, family caregivers are absorbing a majority of this burden. In fact, in 2012 15.4 million caregivers provided an estimated 17.5 billion hours of unpaid care, valued at more than $216 billion, in the United States.

alz pie chart

Family members are often the front line of Alzheimer’s care, but they may lack the appropriate support, resources, or education needed to execute their job effectively. Caregiving can be extremely taxing work, and dementia caregivers are particularly at risk for burnout, distress, and other negative outcomes. Research indicates that dementia caregivers have poorer physical, mental, and financial well-being, than their non-caregiving counterparts.  Caregivers are also more likely to experience depression, anxiety, reduced immune function, increased incidence of disease and mortality,  as well as disruptions in employment and depleted incomes.

November is “National Alzheimer’s Disease Awareness Month” and “National Caregiver Month”. If you know someone who is a caregiver, show them your support and offer respite. Learn more about this special month and pay tribute to a caregiver here.

If you are a caregiver for someone with Alzheimer’s disease or another dementia, consider following these 10 tips to being a healthier caregiver:

1. Understand what’s going on as early as possible.

Symptoms of Alzheimer’s may appear gradually. It can be easy to explain away changing or unusual behavior when a loved one seems physically healthy. Instead, consult a doctor when you see changes in memory, mood or behavior. Don’t delay; some symptoms are treatable.

2. Know what community resources are available.

Contact your local Alzheimer’s Association office. The staff can help you find Alzheimer’s care resources in your community. Adult day programs, in-home assistance, visiting nurses and meal delivery are just some of the services that can help you manage daily tasks.

3. Become an educated caregiver.

As the disease progresses, new caregiving skills may be necessary. The Alzheimer’s Association offers programs to help you better understand and cope with the behaviors and personality changes that often accompany Alzheimer’s.

4. Get help.

Trying to do everything by yourself will leave you exhausted. Seek the support of family, friends, and community resources. Tell others exactly what they can do to help. The Alzheimer’s Association 24/7 Helpline, online message boards and local support groups are good sources of comfort and reassurance. If stress becomes overwhelming, seek professional help.

5. Take care of yourself.

Watch your diet, exercise and get plenty of rest. Making sure that you stay healthy will help you be a better caregiver.

6. Manage your level of stress.

Stress can cause physical problems (blurred vision, stomach irritation, high blood pressure) and changes in behavior (irritability, lack of concentration, change in appetite). Note your symptoms. Use relaxation techniques that work for you, and talk to your doctor.

7. Accept changes as they occur.

People with Alzheimer’s change and so do their needs. They may require care beyond what you can provide on your own. Becoming aware of community resources — from home care services to residential care — should make the transition easier. So will the support and assistance of those around you.

8. Make legal and financial plans.

Plan ahead. Consult a professional to discuss legal and financial issues including advance directives, wills, estate planning, housing issues and long-term care planning. Involve the person with Alzheimer’s and family members whenever possible.

9. Give yourself credit, not guilt.

Know that the care you provide does make a difference and you are doing the best you can. You may feel guilty because you can’t do more, but individual care needs changes as Alzheimer’s progresses. You can’t promise how care will be delivered, but you can make sure that the person with Alzheimer’s is well cared for and safe.

10. Visit your doctor regularly.

Take time to get regular checkups, and be aware of what your body is telling you. Pay attention to any exhaustion, stress, sleeplessness or changes in appetite or behavior. Ignoring symptoms can cause your physical and mental health to decline.

References

2013 Alzheimer’s Disease Facts and Figures

Take Care of Yourself Alzheimer’s Association brochure

www.alz.org

www.alz.org/gmc

www/alz.org/care

 

 

Nov 4 / Thomas Jankowski

Needs Assessment: Can It Help Improve Aging Services?

Why conduct a needs assessment?

Older adults are the fastest growing segment of the population. With mortality rates declining, particularly among the oldest segment, there will be more need for services to help maintain older adults’ well-being and quality of life than ever before. At the same time, funding for aging services remains stagnant at best, whether it comes from Federal or State grants or from local property taxes. A carefully conducted community based needs assessment helps to identify the needs of the older population within a particular place. It provides valid and reliable data to inform and guide the planning, targeting, and delivery of local aging services to help make the expenditure of public funds more effective and efficient.

The IOG has a long track record of conducting older adult needs assessments at the state, county, and city level. Most recently, we reported findings from a needs assessment of older adults in Calhoun County, Michigan.  Our report was based on a broad population survey, a stakeholder survey of service providers, leaders, and experts in the local aging network, and several focus groups of aging service clients from around the county. We followed community based participatory research (CBPR) principles and pursued a multi-method data collection strategy, an approach that results in a deeper and richer understanding of the local conditions and unique circumstances and needs faced by the county’s older adults.

What did we learn? 

We found that the needs of older adults in Calhoun County vary significantly by health, socioeconomic status, family and living circumstances, and geography. In a broad sense, those who report needing the most supportive services tend to have below-average health, functional or sensory limitations, lower income, lower levels of education, and be single or widowed and living alone in rental housing located in Battle Creek or Albion. However, the older population of Calhoun County is quite diverse, and a great many older Calhoun residents in need do not fit this profile. Plenty of married homeowners in Marshall and Tekonsha and Newton Township also report a need for services to help them maintain their health and independence at home. When it comes to older adults and aging services, one size does not fit all.

The most needed services reported by Calhoun’s older population fall into a few basic categories: Health, independence, and information.  Although the vast majority, particularly those age 65 and older, have health insurance, their insurance coverage often does not extend to dental, vision, and hearing services. Those were among the top needed services identified across our three major data collection efforts, in addition to exercise and wellness programs for seniors.

Home repair, chore, and maintenance assistance to help older county residents stay in their homes are the top needed independence services, along with utility assistance for those in financial need and transportation for those who do not drive. In the category of information, stakeholders and focus group participants alike called for more outreach and public awareness efforts, enhanced information and assistance services, and innovative ways of providing access and informing older adults about the options and services that may be available to them.

While rural-dwelling survey respondents were less likely to report living alone and more likely to report having friends and family members they can count on for help, focus group participants from rural areas were more likely to report feeling lonely and isolated. Seniors in sparsely populated areas especially value opportunities to socialize with fellow seniors, so they value the wellness and congregate meal programs not only for their health benefits, but because they facilitate peer interaction as well.

Our focus groups and key stakeholders survey helped us not only to gauge the level of need in the community, but also to gather ideas about ways in which service delivery can be improved.  Many participants advocated for greater community partnership, for reaching out beyond the aging network to collaborate with other groups and businesses that have an interest in serving the older population.  Churches, service and fraternal clubs, coffee shops and diners, and other locally based organizations may be enlisted to help distribute information, identify seniors in need, and provide an access channel to services. Those already providing aging services can work together more closely to coordinate services, reduce duplication, and close gaps.

What does it matter? 

This is just a brief overview of our findings; a copy of our detailed report is available upon request. Of course, the ultimate purpose of a needs assessment is not merely to produce a report, but to inform and guide action. We are pleased that our community needs assessment results have already helped the Calhoun County Office of Senior Services and the Region 3B Area Agency on Aging determine where and how to allocate funding that better responds to the needs of older adults in their county. They have consolidated dispatch and transportation programs to save money and provide better service. They have developed pilot programs for cost-effective chore and home modification services. They have increased funding for dental, vision, and hearing assistance. They have initiated efforts to integrate whole person wellness, health screening, congregate meals, recreational programs, and benefits counseling into combined sessions in rural areas to promote social engagement, reduce isolation, and provide increased access to services. And they are expanding efforts to coordinate services and build relationships with service providers and community organizations. These are just some examples of the ways in which needs assessment research can be used to help strengthen community efforts to support older adults while enhancing effective stewardship of public resources.

Sep 30 / Carrie Leach

African American Seniors Needed to Participate in Research

HBEC Newsletter Fall 2013

 

 

Aug 16 / Carrie Leach

IOG Insider: Predoctoral Student Pamela May

pam mayThe IOG will be welcoming five new students this fall, and welcoming back seven current students to our research mentorship program. Each of which are pursuing PhD’s in their home department or program while gaining additional support, mentoring and professional development from a faculty member or affiliate of the IOG with a focus on aging. To get better acquainted with our student body, we thought it a good idea to interview this years IOG Graduate Student Organization (GSO) incoming President, Pamela May.

Can you share something about yourself and the work you currently do at the IOG?

I’m beginning my fifth year as a pre-doctoral trainee at the IOG and my first year as the IOG Graduate Student Organization President. I am a clinical psychology doctoral candidate at Wayne State, working towards proposing my dissertation and applying for clinical internships. My research interests include predictors of cognitive status in older adults and neuropsychological assessment, more broadly. Following a successful dissertation proposal, I plan to collect data from community dwelling older adults and examine associations between their affect, level of engagement with life (i.e., the degree by which they have cognitively stimulating lifestyles), and cognitive functioning (e.g., memory complaints and memory performance based on standardized testing).

Beyond the day-to-day graduate life, I enjoy being outside in nature and taking hikes. I am a huge fan of horseback riding. I love to salsa dance, and I enjoy pretending that I am good at it. Drawing and painting with watercolors are also some of my favorite pastimes, along with chasing and playing with my pet ferret, Curious George.

Where did you grow up?

I grew up in a large suburban town on the south shore of Long Island, New York with my parents and older sister. My hometown was only an hour train ride to New York City. I lived in the same house throughout my childhood and adolescence, until I moved away for college.

Where did you go to school?

I went to college at State University of New York, at Geneseo. It was a small liberal arts college in Western New York that was surrounded by farmland. My sister went to Geneseo as well, so I followed her footsteps. I also chose Geneseo because it had a great reputation academically, and I liked the idea of living in a rural college town. It was quite different from living in the suburbs of Long Island.

What did you study?

I chose psychology as my major at Geneseo without ever taking a psychology course before. I just knew it was what I wanted to study – I wanted to understand human behavior and use this knowledge to help others. The experience of taking an introductory psychology class further strengthened my passion in this area. I consequently took more psychology classes than necessary, and became a research assistant and a leader in the college’s Psychology Club.

What led you to study aging?

Several years ago, before my senior year at Geneseo, my undergraduate mentor asked me if I would like to be a research assistant for her friend, who was a gerontologist. At the time, I never met a researcher in aging, or studied aging. I accepted the opportunity and found myself enjoying the process of working with older adult research participants. My own personal experiences with my beloved grandparents also directed me to gerontology. My grandmother often noted that her older years were the “best years” of her life; she continues to be a role model for how I would like to live as an older adult. Together, these experiences led me to choosing a gerontology research focus at Wayne State. My graduate research mentor, Dr. John Woodard, introduced me to the IOG, to foster and support my research endeavors in gerontology.

How do you hope to have a positive impact on aging?

As a soon-to-be clinical psychologist, I hope to play a positive role in the field of aging, through research, teaching, clinical practice, and service. Through research, I plan to disseminate evidence for modifiable, lifestyle predictors of cognitive impairment in late life. Through clinical practice, I hope to educate older adults about the effects of normal and abnormal aging on cognition, by providing feedback on their cognitive performance. Overall, these endeavors attempt to directly or indirectly help older adults maintain their cognitive health into their later years. I personally hope to empower older adults to become active, informed, and independent agents in their lives, where possible.

To learn  more about our students click here.

To learn more about the IOG click here.

Aug 5 / Carrie Leach

IOG Community Outreach Infographic

Community Outreach July 2013

Jul 2 / Carrie Leach

The Tyranny of Compounding Fees: Are Mutual Funds Bleeding Retirement Accounts Dry?

stu neufeld

Dr. Neufeld (pictured) presented this conference paper at the Gerontological Society of America annual conference. Using historical data, this paper aims to document the effect of several levels of mutual fund fees and expenses on investment returns. Preliminary results suggest that over typical working careers (30-40 years), the financial services industry captures 70-80% of investment gains, leaving the individual investor with only 20-30%.

Executive Summary

  • Investments in retirement accounts are plagued by poor returns. An important factor is that, in aggregate, returns of actively managed equity mutual funds trail those of broad market indices.
  • This paper partitions the real total return of the S&P 500 into: (1) return to mutual fund investors and (2) return to the financial services industry. The author calculates these shares for all 10-, 20-, 30-, 40-, and 50-year investment periods using data from January 1871 to June 2011.
  • The financial services industry share of market returns increases with the length of investment period. For annual performance lags of 250 basis points (bps), the industry share over 10 years is about 46 percent on average; over 50 years it increases to 74 percent.
  • Smaller degrees of underperformance increase investor shares substantially: 50-bp lags result in an average investor share of 90 percent for 10-year investment periods and 77 percent after 50 years.
  • The shares of market returns to investors and the financial services industry are highly variable for shorter investment periods, but this variability declines as the investment period increases.
  • A 100-bp annual lag in performance over 50 years would reduce retirement assets currently held in equities by about $28 trillion (inflation adjusted), an amount almost twice that of the entire U.S. national debt as it currently stands, assuming average market returns.
  • The author recommends that pension plan fiduciaries be required to select default investments with a management expense ratio (MER) as low as possible, ideally no greater than 10 bps. Also, financial advisers should direct client funds to similarly low-cost investment vehicles.

To download the full report click here.

Dr. Neufeld is an IOG assistant professor, jointly appointed with the department of anthropology. He has a doctorate in mathematics and his research focuses on retirement security, risk, and financial decision making. To learn more about Dr. Neufeld and his research please visit his profile page here.