Top Ten 401(k) mutual funds confirms my concerns


A recent “Top 10 Funds in 401(k)s” article includes recent analysis of mutual fund company market share in U.S. company 401(k) retirement plans by Judy Diamond Associates.

There was no surprise on the dominance of the four largest company 401(k) retirement plan mutual fund providers. Vanguard, Fidelity, T. Rowe Price and American Funds have more than half of the assets of U.S. company 401(k) retirement plans.

What surprised me was that there are 28 target date mutual funds on the top 100 mutual fund list. Those mutual funds had 35% of all U.S. company 401(k) retirement plan assets at the end of 2014.

The link to the article, “Top 10 Funds in 401(k)’s” can be found here.

Far too many individual company 401(k) retirement plan participants have the majority of his or her company 401(k) retirement plan assets invested in a target date mutual funds.

Target date mutual funds are always the most expensive company 401(k) retirement plan mutual funds to own. Worse, I have never seen a target date mutual fund option to be ranked in the top hand full of default investment options. The investment performance is dismal for the majority of all target date mutual funds regardless of the name of the target date mutual fund company.

So, this analysis confirms my 17 years of experience providing investment advice to individual company 401(k) retirement plan participants. The majority of dollars invested in U.S. company 401(k) retirement plan accounts own the most expensive and worst-performing mutual funds available.

Ric Lager
Lager & Company, Inc.

Share and Enjoy

  • LinkedIn
  • Google Plus
  • Facebook
  • Twitter
  • Add to favorites
  • Email
  • RSS

This Thanksgiving, Shoot the Turkey in Your 401(k)


This Thanksgiving holiday weekend, you are very likely to find at least a few minutes of down time. Here is a quick idea to protect and profit from those few minutes alone. Review your current company 401(k) retirement plan holdings. Open your … [Continue reading]

Pay attention to your 401(k) mutual fund selections


The vast majority of individual investors pay little or no attention to their individual company 401(k) retirement plan accounts. There are many reasons; here are the most likely suspects. No time. No experience. No expertise in money and … [Continue reading]

It’s time again for a 401(k) bond mutual fund lesson

Money on Blackboard

Central banks around the world have used all the tools available to them to keep interest rates near all-times lows. This phenomenon has allowed bond prices to soar to near all-time highs. The bond mutual funds that you own in your company 401(k) … [Continue reading]

It’s hard to pick 401(k) mutual funds too

books and pages

There was a great article in the Wall Street Journal yesterday about the dramatic changes in how large institutions are managing their money. The link to the article is listed below: The Dying Business of Picking Stocks This article reminded me … [Continue reading]

Don’t Let 7 Years of 401(k) Gains Go Down the Drain


Your current company 401(k) retirement plan account is certainly near all-time highs. There are several key factors involved in these record high levels. Previous personal annual contributions and company-matching contributions have been added to … [Continue reading]

Scary Wells Fargo/Gallup survey reveals a lack of understanding of bonds and interest rates relationship


The results of this survey were not shocking to me. I do think that readers of my web site would find these results of interest. Bob Bryan at Business Insider wrote a great article about the lack of individual investor knowledge regarding how … [Continue reading]

It’s time for your 401(k) stress test


The Mayo Clinic web site states that a stress test gathers information about how your heart works during physical activity. Exercise makes your heart pump harder and faster than usual. That exercise stress can reveal problems within your heart that … [Continue reading]

September provides extra time to review your 401(k)

to do list

My goodness, it is that time of the calendar year again. Summer vacations are in the books. The kids are back in school. The NFL season has begun and Fantasy Football picks are disappointing so-called experts already. September slows down the pace … [Continue reading]