After a rocky end to the first quarter of 2020 across the markets, the second quarter offered a brisk bounce back for investments and that performance can be seen in the Mid Atlantic Trust Company 401(k) Benchmark. The benchmark, which reflects the portfolio performance across 401(k) plans serviced by the company, finished the second quarter up 15.48% for the three months ending June 30, 2020, and now stands at a -3.14% year to date return for 2020.
The performance to date for the 401(k) Benchmark in 2020 mirrors the swings in the major market indices in recent months, as investors react to trials and tribulations around the world of how to deal with the Coronavirus pandemic. These swings have included an all-time high for many of major indices six weeks into the year, followed by a retreat of almost 35% in value over the following six weeks, only to then rally back over the second quarter at a pace that hasn’t been seen in over 30 years. For the hypothetical 401(k) participant*, however, the benchmark shows that their retirement plan statement at the end of June would show their balance to be 99% of where it stood on December 31, 2019 — essentially unchanged and a true testament as to why experts recommend 401(k) participants to “stay the course” even during turbulent markets.
|Nasdaq Composite (Principal Return)||30.63||12.11|
|Dow Jones Industrial Average||18.51||‑8.43|
|Mid Atlantic Trust Co. 401(k) Benchmark||15.48||-3.14|
While the performance of the market has whipsawed back and forth throughout the year, asset allocation has remained fairly constant within the Mid Atlantic Trust Company 401(k) Benchmark. U.S. Stock holdings, which dropped from 57% of holdings coming into 2020 down to 52% by the end of the first quarter, ticked up slightly to 53% of holdings by the end of the second quarter. That slight shift in allocation towards U.S. Stocks came from U.S. bond market holdings, which dropped from 20% down to 19% for the second quarter.
ABOUT THE MID ATLANTIC 401(k) BENCHMARK
Mid Atlantic Capital Group is a leading financial services organization that provides a wide array of brokerage, advisory, and trust services to a diverse national client base of financial advisors and institutions, asset managers, and benefits administrators through its various subsidiary companies. Because we provide these services, Mid Atlantic Trust Company has plan investment data on approximately 95,000 401(k) plans representing approximately $100 billion in assets. Data used for this benchmark uses approximately 31,000 of those plans (see fact sheet for further information on actual sample). In response to requests from our institutional clients, we have created the Mid Atlantic Trust Company 401(k) Composite Benchmark which is designed to reflect the portfolio performance across 401(k) plans serviced, in any capacity, by Mid Atlantic.
For a copy of the full report of the Mid Atlantic Trust Company 401(k) Composite Benchmark, click here.
Contact Mr. Scott Hervoyavich of Mid Atlantic Trust Company at 800-693-7800 or by emailing him at firstname.lastname@example.org.
* For the hypothetical participant balances, we used a starting balance based on the average 401(k) participant balance provided by the Investment Company Institute for the year of the starting balance. In our calculation, we assumed a starting annual salary of $50,000, a combined employee/employer 9% annual contribution rate, and a 3% annual salary increase and applied the monthly rate of return of the benchmark.