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Portfolio > Portfolio Construction

Lifestyle Funds Deliver

By Melanie Waddell

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It looks like the popularity of Lifestyle funds is paying off. John Hancock has found that participants in its 401(k) plans who invested only in a target-risk Lifestyle Portfolio from 2001 to 2005 got better returns than John Hancock plan participants who chose their own asset allocations. The survey, conducted by Burgess + Associates for John Hancock, compared investment returns of more than 162,000 John Hancock USA 401(k) plan participants and also found that 93.5% of these Lifestyle participants experienced results superior to the S&P 500 Index.

According to the study:

?? 1/2 88.7 % of Participants who chose their own asset allocations would have accumulated a higher ending balance if they had invested in a single Lifestyle Portfolio that corresponded to their risk score. On average, their average annual investment returns would have been 2.96% points higher.

?? 1/2 Based on their beginning account balances, the average annual return earned by participants who had chosen to allocate all of their contributions to a single Lifestyle Portfolio was more than double the return earned by non-Lifestyle Participants: 6.02% versus 2.66%.

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