Among participants in 401(k) plans that are clients of John Hancock, 94% who invested all their assets in a single John Hancock lifestyle fund for the three years through 2005 outperformed the S&P 500 index, according to a study conducted by Burgess + Associates for John Hancock. Those participants had an average annual return of 6.02%, compared with 2.66% for participants who chose their own asset allocations. The S&P 500 returned an annualized 4.8% for the same period.
Also, 88.7% of participants who chose their own allocations between 2001 and 2005 would have fared better by investing their assets only in a single risk-based lifestyle fund. On average, their average annual investment returns would have been 2.96 percentage points higher.
The survey compared the investment returns for the three-year period of more than 162,000 401(k) plan participants as of year-end 2005.