Participants in 401(k) plans over the past 10 years have continued to make the same mistakes, John Hancock found in a recent analysis of returns between 1997 and 2006.

Investors either tended to place too much in very conservative choices or very aggressive selections, weren’t properly diversified and failed to rebalance on a regular basis.

John Hancock also found that 84.2% of investors who eschewed lifestyle funds would have enjoyed average annual returns 7.2% if they had selected even one lifestyle portfolio, rather than the average 5.3% they received.

The report also found that non-lifestyle investors held an average of 3.9 funds and tended to invest a large percentage of their contributions to funds that were popular at the time of their enrollment, without revisiting those choices later.

“John Hancock’s asset allocation funds are designed to help participants save successfully,” noted Ed Eng, senior vice president of product development at the firm. “Through these portfolios, participants can avoid some of the common, and self-defeating, investing behaviors that the study identified.”

John Hancock’s lifestyle asset allocation funds are diversified in an average of 16 classes of investments, Eng noted.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.