Allocation of 401(k) Plan Assets
Chart of the Week for October 27-November 2, 2006
401(k) plans are now the most common type of employer-sponsored retirement plan in the U.S. It’s interesting to see how American workers have chosen to allocate assets in their 401(k) plans over a two year period.
According to a recent study by the Investment Company Institute (ICI), 48% of 401(k) plan participants’ account balances were invested in equity funds in 2005. In 2004, only 46% was invested in equity funds. The popularity in equity funds contrasts to the declining interest in individual company stocks among 401(k) participants. Balanced funds and GICs (guaranteed investments contracts) along with other stable value funds both gained a slightly larger share of allocation in total plan assets compared with their allocation in 2004. Bond and money funds’ portions in total plan assets remained unchanged at 10% and 4% respectively.
Although the allocation of aggregate 401(k) plan assets has leaned toward equity investments, plan participants should stay diversified among different asset classes and make allocation decisions according to their risk tolerance, timeline, and investment objectives.
This illustration was compiled by information from outside sources. These companies are not affiliated with ICMA-RC. This information is being provided for educational purposes and is not intended to be construed as or relied upon as investment advice. ICMA-RC does not offer specific tax or legal advice. Individuals are advised to consider any new investment strategies carefully prior to implementing.
Please consult both the current applicable prospectus and MAKING SOUND INVESTMENT DECISIONS: A Retirement Investment Guide carefully for a complete summary of all fees, expenses, charges, financial highlights, investment objectives, risks and performance information. Investing in mutual funds and other investment vehicles involves risk, including possible loss of the amount invested. Investors should consider the Fund's investment objectives, risks, charges and expenses before investing or sending money. The prospectus contains this and other information about the investment company. Please read the prospectus carefully before investing. All Vantagepoint Funds invested through 401 or 457 plans are held through VantageTrust. Vantagepoint Funds are distributed by ICMA-RC Services LLC, a wholly owned broker-dealer subsidiary of ICMA-RC and member FINRA/SIPC. For a current prospectus, contact ICMA-RC Services, LLC.
The performance data quoted represents past performance. Past performance is no guarantee of future results. Investment returns and principal value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data illustrated. For performance data current to the most recent month end, contact ICMA-RC Services, LLC by calling 800-669-7400 or by writing to 777 North Capitol Street, NE, Washington, DC 20002-4240. Para asistencia en Español llame al 800-669-8216. Performance data current to the most recent quarter end is available by visiting www.icmarc.org.