Category Archives: 401(k) Benchmark
The 2022 Roller Coaster Ends with Positive Gains
The Dow Jones Industrial Average and S&P 500 rose sharply during the fourth quarter — up over 16% and 7.5% respectively. This was in contrast to the previous three quarters of the year when all three major indices declined. The Nasdaq fell slightly in Q4, down less than 1%, as it had throughout most of the year in 2022. The primary factors behind these latest gains were the positive outlook on inflation, the hope that interest rates wouldn’t need to rise as high as previously expected, and the belief that the Chinese government would ease its “Zero COVID” policies.
The AmericanTCS 401(k) Composite Benchmark posted a 7.03% gain for Q4, which was particularly noteworthy when compared to the performance of the major stock market indices. Although it trailed the Dow Jones, it was only slightly outperformed by the S&P 500. This strong performance is a testament to the effectiveness of a well-diversified retirement savings plan and highlights the potential for 401(k) plans to provide solid returns for investors. The benchmark’s gain in Q4 suggests both stocks and bonds in the U.S. economy were performing well, and investors in the benchmark were able to capitalize on this positive momentum. This is good news for 401(k) participants as they work toward their long-term financial goals. Despite the late-year rally, the hypothetical 401(k) investor still suffered a 16% decline for 2022, after a 5% decline in Q3 and an almost 13% decline in Q2. However, when we zoom out and look at a hypothetical 401(k) participant over a period of five years, the numbers look much better. During three of the last five years, the AmericanTCS 401(k) Benchmark has generated annual returns greater than 14%, with 2018 posting a -6% return, and 2022 with a -16.70% return.
ABOUT THE AmericanTCS 401(k) BENCHMARK
AmericanTCS 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 affiliated companies. Because we provide these services, AmericanTCS has plan investment data on over 100,000 401(k) plans representing approximately $120 billion in assets. In response to requests from our institutional clients, we have created the AmericanTCS Composite Benchmark. Using data from plans serviced by AmericanTCS with assets of at least $100,000 at the beginning and ending of the month, the AmericanTCS 401(k) Composite Benchmark is designed to reflect the portfolio performance across 401(k) plans serviced, in any capacity, by AmericanTCS. See the “Methodology” section of this report for details on how the composite benchmark is calculated.
Three Year Winning Streak for 401(k) Participants Could Be in Jeopardy
After three straight years of positive annual returns, 401(k) participants face a nearly 18% decline as we hit the halfway point of 2022.
Just two years ago, as the pandemic took hold across the globe, 401(k) participants watched their account balances get walloped. In the first quarter of 2020, the Mid Atlantic Trust Company 401(k) Composite Benchmark showed a 16.12% decline for that quarter alone for the hypothetical 401(k) participant. But, of course, from that low point, the markets came roaring back with solid gains achieved throughout the remainder of 2020 to finish the year at +14.85%. Tack on gains of over 14% for 2021 and 401(k) participants rode one of the strongest two-year market rallies in history.
Sometimes, of course, as quickly as the market “giveth,” the market “taketh away.” With the closing of the books on the first half of 2022 at the end of June, 2020, we closed out the worst first-half performance in global markets in decades as fears grew that the central banks would push economies into a recession with their fight against inflation, ongoing supply-chain issues, and the Russia-Ukraine war. For the second quarter, the S&P 500 fell more than 16% – its biggest one-quarter fall since March 202, the Dow Jones Industrial Average staged its worst first-half performance since 1962, losing 11.3%, and the Nasdaq suffered its biggest quarterly drop since 2008, losing 22.4%. Meanwhile, the Mid Atlantic Trust Company 401(k) Composite Benchmark also took a hit in quarter two, with a -12.96% return, putting it down -17.99% year to date, but in better shape than the Nasdaq and S&P 500 indices.
ABOUT THE MID ATLANTIC 401(k) BENCHMARK
Mid Atlantic Trust Company 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 over 100,000 401(k) plans representing approximately $120 billion in assets. In response to requests from our institutional clients, we have created the Mid Atlantic Trust Company 401(k) Composite Benchmark. Using data from plans serviced by Mid Atlantic Trust Company with assets of at least $100,000 at the beginning and ending of the month, the Mid Atlantic Trust Company 401(k) Composite Benchmark is designed to reflect the portfolio performance across 401(k) plans serviced, in any capacity, by Mid Atlantic. See the “Methodology” section of this report for details on how the composite benchmark is calculated.
* 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.
2022 Off to a Rough Start for the 401(k) Investor
If the typical 401(k) participant will see a fourth consecutive year of gains, it will require making up for almost a 6% Q1 loss out of the gate.
After a relatively steady year of returns in 2021 and three straight years of positive returns, the Mid Atlantic Trust Company 401(k) Composite Benchmark started the year with a -5.78% return for Q1. The Benchmark’s performance in Q1 gave back all of the gains (and then some) that were realized in Q4 of 2021 when the typical 401(k) performance saw their 401(k) account increase by 5.47%. This performance reversal reflects the overall performance of the broader markets, which were hampered throughout the quarter amidst increased volatility brought on by rising interest rates, spiking inflation, ongoing supply-chain snarls, and the Russia-Ukraine war.
It has been a strong run for 401(k) participants over the previous five years. In four out of five years, the Mid Atlantic Trust Company 401(k) Composite Benchmark posted annual returns greater than 14%, with only 2018 providing a 6% negative return. For the hypothetical 401(k) investor*, even with the nearly 6% decline for the first quarter of 2021, that rate of return combined with an annual salary increase and a steady contribution rate means they would have nearly doubled their account balance during those five years.*
ABOUT THE MID ATLANTIC 401(k) BENCHMARK
Mid Atlantic Trust Company 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 over 100,000 401(k) plans representing approximately $120 billion in assets. In response to requests from our institutional clients, we have created the Mid Atlantic Trust Company 401(k) Composite Benchmark. Using data from plans serviced by Mid Atlantic Trust Company with assets of at least $100,000 at the beginning and ending of the month, the Mid Atlantic Trust Company 401(k) Composite Benchmark is designed to reflect the portfolio performance across 401(k) plans serviced, in any capacity, by Mid Atlantic. See the “Methodology” section of this report for details on how the composite benchmark is calculated.
* 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.
2021 Locked in a Third Straight Year of Gains for 401(k) Participants
The headlines throughout 2021 were dominated by concerning news for employees — COVID-19 variants, supply-chain challenges, inflation and labor shortages. The past two years have certainly been a period that most would choose to soon forget; however, a bright spot amidst all of the turmoil is the typical 401(k) participant’s account performance. 2021 marked the third consecutive year of gains for the typical 401(k) participant, with a 14.92% gain over the 12 months as measured by the Mid Atlantic Trust Company 401(k) Composite Benchmark.
401(k) participants enjoyed a steady return throughout 2021, with the exception of the third quarter. The year started with a 3.69% gain over the first quarter of 2021, followed by a 5.73% gain in the 2nd quarter. The third quarter was the only month with a step backward when the Benchmark had a -0.61% return, in line with the Dow Jones Industrial Average and the NASDAQ Composite Index. Those indexes also ended up in negative territory for the third quarter. As did the rest of the market, the Mid Atlantic Trust Company 401(k) Composite Benchmark bounced back in the fourth quarter with a 5.47% return.
Over the past five years, it’s been a strong run for 401(k) participants. Four out of the past five years, the Mid Atlantic Trust Company 401(k) Composite Benchmark has posted solid annual returns greater than 14%, with only 2018 providing a 6% negative return. For the hypothetical 401(k) investor, that rate of return combined with an annual salary increase and a steady contribution rate means they would have more than doubled their account balance during those five years.*
Hypothetical Participant Balance
401(k) investors add to their returns in Q1, bringing 1-year return up to nearly 42%
For the first quarter of 2021, the Mid Atlantic Trust Company 401(k) Benchmark produced a positive return of 3.69%. This is the fourth consecutive quarter with positive returns for the Benchmark, bringing the total 12-month return up to 41.97% and the hypothetical participant* balance up to $152,891.
Looking back one year ago to the end of the first quarter for 2020, the hypothetical 401(k) investor that the Benchmark tracks saw a negative return of -16.12% as the COVID-19 pandemic took hold across the United States. Since that time, the benchmark has rebounded, producing quarterly returns of 15.48% in 2Q20, 6.05% in 3Q20, 11.80% in 4Q20 and now an additional 3.69% in 1Q21. This brought the balance for the hypothetical 401(k) investor over the $150,000 level during the quarter, marking a doubling of the balance over the past 5 years. This serves as a reminder as to why experts recommend 401(k) participants “stay the course” even during the most turbulent markets.
In comparison to the major market indices, the Mid Atlantic Trust Company 401(k) Benchmark was outpaced in the first quarter by the Dow Jones (7.76%) and the S&P 500 (6.17%). The Nasdaq Composite, which delivered a blistering 43.6% return for 2020 and over 72% over the past twelve months, cooled off in the first quarter with a 2.78% return as many tech stocks that comprise the index were under pressure for much of the quarter.
| First Quarter 2021 Comparison with Major Indices | 2Q20 | 3Q20 | 4Q20 | 1Q21 | 12-Mo. Return |
| Dow Jones Industrial Average | 15.48 | 7.63 | 10.20 | 7.76 | 53.78 |
| S&P 500 | 20.54 | 8.93 | 11.70 | 6.17 | 56.35 |
| Mid Atlantic Trust Co. 401(k) Benchmark | 15.48 | 6.05 | 11.80 | 3.69 | 41.97 |
| Nasdaq Composite (Principal Return) | 30.63 | 11.02 | 15.70 | 2.78 | 72.04 |
| Effective Fed Funds Rate | 0.05 | 0.09 | 0.09 | 0.09 | 0.07 |
| S&P U.S. Treasury Bond Current 10-Year Index | -6.96 | -8.2% |
In terms of asset allocation, US Stocks continued to take up a greater share of the pie, increasing from 57% of 401(k) holdings at the end of 2020 to 60% at the end of March 2021. That shift came at the expense of bonds — both US bonds, which dropped from 19% to 17% of assets and Non-US Bonds which dropped from 3% to 2%. Cash holdings increased from 4% to 5%.
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. 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. See the “Methodology” section of this report for details on how the composite benchmark is calculated.
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 shervoyavich@macg.com
* 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.
For All its Trials & Tribulations, 2020 Delivered the 401(k) Investor a Positive Return for the Year
When all was said and done and the books were closed on 2020, the Mid Atlantic Trust Company Composite Benchmark finished in positive territory in three out of four quarters, providing the hypothetical 401(k) investor with a positive return for the year.
While things certainly got off to a shaky start in 2020, 401(k) investors that rode out the storm can take comfort in the fact that for the second year in a row their 401(k) balance ended up in positive territory. Out of the gate in the first quarter of 2020, the Mid Atlantic Trust Company 401(k) Benchmark dug quite a hole for itself with a 16% quarterly dip. It took a roaring 15.5% gain in the second quarter and another 6% gain in the third quarter to bring balances back into positive territory, only to be topped off by another 11.8% return in the fourth quarter to finish up at 14.85% for the year. This year can serve as a true testament as to why experts recommend 401(k) participants “stay the course” even during the most turbulent markets.
In comparison to the major market indices, the Mid Atlantic Trust Company 401(k) Benchmark was outpaced in the fourth quarter only by the Nasdaq composite, which continued its impressive run to finish up the year at a remarkable 43.6% return for the year.
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 35,000 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, 401k Benchmark 4Q 2020.
Contact Mr. Scott Hervoyavich of Mid Atlantic Trust Company at 800-693-7800 or by emailing him at shervoyavich@macg.com
* 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.
401(k) Balances Returned to Positive Territory for 2020
After a rollercoaster performance across the 1st half of 2020, the Mid Atlantic Trust Company 401(k) Benchmark delivers a second straight positive quarterly return, which means the hypothetical 401(k) investor now has a positive YTD return for 2020.
Following up on a return of over 15% in the second quarter of 2020, the Mid Atlantic Trust Company 401(k) Benchmark continued its momentum in the third quarter and tipped the year-to-date return for the hypothetical 401(k) participant* into positive territory. The benchmark, which reflects the portfolio performance across 401(k) plans serviced by the company, finished the second quarter up 6.05% for the three months ending September 30, 2020, and now stands at a 2.72% year-to-date return for 2020.
Just like the ups and downs we have experienced in all aspects of our lives throughout 2020, the performance for the 401(k) Benchmark in 2020 has been like a rollercoaster. Out of the gate for the year, the Benchmark saw a 16% dip in the first quarter, and even after an over 15% return in the second quarter, the hypothetical investor was still starring at a negative balance halfway through the year. Even with a market pullback during the month of September, the third quarter delivered enough of a return for the hypothetical investor to see a positive year-to-date return in their accounts — a true testament as to why experts recommend 401(k) participants “stay the course” even during the most turbulent markets.
| 3Q20 | Year-to-Date | |
| Nasdaq Composite (Principal Return) | 11.02 | 24.46 |
| S&P 500 | 8.93 | 5.57 |
| Mid Atlantic Trust Co. 401(k) Benchmark | 6.05 | 2.72 |
| Dow Jones Industrial Average | 7.63 | ‑2.65 |
In terms of asset allocation within the Mid Atlantic Trust Company 401(k) Benchmark, U.S. Stock holdings continued to climb, down from a low of 52% of holdings at the end of the first quarter, up to 54% at the end of the third quarter. This is still below where U.S. Stocks stood coming into the year when they represented 57% of holdings. That allocation shift towards U.S. Stocks has continued to come from U.S. bond market holdings, which stood at 18% at the end of the third quarter, down from 20% at the end of the first 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 shervoyavich@macg.com
* 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.
Brisk Second Quarter Rebound for the Mid Atlantic Trust Company 401(k) Benchmark
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.
| 2Q20 | Year-to-Date | |
| Nasdaq Composite (Principal Return) | 30.63 | 12.11 |
| S&P 500 | 20.54 | ‑3.08 |
| 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 shervoyavich@macg.com.
* 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.
Mid Atlantic 401(k) Benchmark Reflects COVID-19 Impact on Retirement Savings of Americans
The Mid Atlantic Trust Company 401(k) Benchmark, which reflects the portfolio performance across 401(k) plans serviced by the company, finished the first quarter of 2020 with a -16.12% trailing return. The 16.12% decline for the quarter comes on the heels of a 6.13% return for the fourth quarter of 2019 and an overall return of 21.24% for the calendar year 2019.
The performance of the 401(k) Benchmark is in line with the trajectory of the major market indices amidst the world’s response to the Coronavirus pandemic. Six weeks into 2020 all of the major indices reached all-time highs, but quickly retreated from those lofty levels during March as the economic impact of the pandemic began to take hold. The Dow Jones Industrial Average (DJIA) posted a drop of -23.2% for the first quarter, its worst quarter since the fourth quarter of 1987. The S&P 500 posted a -20% change for the quarter — its worst overall quarter since the fourth quarter of 2008. The NASDAQ Composite Index finished the first quarter of 2020 posting a -14.18% return, its worst since 2018.
| Index Returns | 1Q2020 |
| DJIA | -23.2% |
| S&P 500 | -20.0% |
| MATC 401(k) Benchmark | -16.12% |
| NASDAQ | – 14.18% |
| 10-Yr Treasury Yield | – 1.18% |
As the equity market performance shifted in the first quarter of 2020, the shift in asset allocation across 401(k) plans is reflected in the 401(k) Benchmark. The allocation of U.S. Stock holdings dropped from 57% of holdings at the end of Q4 2019 down to 52% at the end of Q1 2020. Non-U.S. stocks stood firm at 18% in a quarter-over-quarter comparison, while Cash, U.S. Bonds and Non-U.S. Bond holdings saw an uptick in total holdings.
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 shervoyavich@macg.com