The majority of 401(k) investors earned positive investment returns during the five-year period ended 2010, despite dramatic market declines in 2008 and 2009, according to a new report by Vanguard.
The report, “Participants During the Financial Crisis: Total Returns 2005-2010
,” found that the average annual return over the five-year period was 3.7 percent, not including the effect of continued contributions.
Investors overall portfolios increased by an average of 20.27 percent over the same period because of these investment returns, according to Vanguard.
Overall, 95 percent of participants earned a positive total for the period, the study said.
Participants who invested in single target-date funds
or managed accounts experienced significantly lower dispersions of risk and return compared with those who created their own portfolios, the report found.