This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Large 401(K) Funds in Growth Bind

Lately some of the most popular 401(k) funds have shown signs of slowing down. After performing brilliantly in the early part of the decade, Dodge & Cox Stock has delivered uninspiring results in recent years. During the past three years, the fund has lost 10.3% annually, lagging the S&P 500 by 3 percentage points and trailing 79% of its large value peers, according to Morningstar.

American Funds Growth Fund of America has lost 6.7% annually for the past three years, lagging 57% of large growth funds.

While such results are troubling, proponents of the big funds argue that the situation is far from dire. None of the top 10 funds blew up during the credit crisis. That was not surprising because the top funds are run by big companies that work hard to avoid disaster with their 401(K) funds. Without exception, these popular funds are broadly diversified and take limited risks. Such cautious choices may not lead the pack, but they are unlikely to finish last either.

Besides being steady, the funds that perform well tend to charge modest fees. That helps to explain why the funds outperformed during their best days. These low fees should continue providing an important edge in the future.

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $131.54 0.97%
FB $82.16 0.77%
GOOG $555.45 -1.70%
TSLA $233.14 6.70%
YHOO $44.42 -0.22%

Markets

DOW 18,070.57 -9.57 -0.05%
S&P 500 2,111.93 -5.76 -0.27%
NASDAQ 5,060.8070 -31.2780 -0.61%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs