Participants in 401(k) plans who made their own selections for their portfolios saw returns almost 3 percentage points less than had they invested solely in a portfolio of target-risk lifestyle funds, according to a survey by Burgess & Associates, conducted for John Hancock. The study found that 88.7% of John Hancock plan participants who picked their own stocks would have ended with a higher balance with the lifestyle funds and 9.35% of the lifestyle participants outperformed the Standard & Poor’s 500 Index. The average return for the lifestyle portfolio for the period studied (2001-2005) was 6.02%, vs. 2.66% for non-lifestyle participants.
