Checking your 401(k) account balance is a little less painful these days.
Popular active equity funds in 401(k)s tanked last year because of their heavy focus on the big technology companies that got battered by surging inflation and steep interest rate hikes. Those same stocks have given them a boost so far in 2023.
Fidelity Contrafund (FCNTX), Growth Fund of America (AGTHX), T. Rowe Price Blue Chip Growth (TRBCX), Harbor Capital Appreciation (HNACX) and Fidelity Growth Company (FDGRX) are up anywhere from 5.4% to 8.8% through Tuesday’s close. By comparison, the S&P 500 is up 4.6%.
Of course, that strong start doesn’t come close to making investors whole. Those five funds were all down at least 33% in 2022, and overcoming that loss would take stupendous results. Someone with $1,000 in a fund that lost 30% would need a gain of about 43% on the remaining money to get back to that initial $1,000.
A look at what’s fueling the gains is reminiscent of bubblier times. At Fidelity Contrafund, three of its top 10 holdings as of Dec. 31 are tech companies that are up double-digits this year, with Meta Platforms Inc. (5.5% of assets) gaining 19%, Amazon.com Inc. (5% of assets) up 15% and Alphabet Inc. (about 4.2% of assets) up about 11%.
Investor hopes that declining inflation will cause the Federal Reserve to pause or even reverse rate hikes are helping boost the same growth stocks that led last year’s decline. The rally wavered on Wednesday after Microsoft Corp. (MSFT) warned of a slowdown in sales, but the Nasdaq managed to erase most of the day’s losses by 2:30 p.m.
At T. Rowe Price Blue Chip Growth Fund, concentrated positions in some big tech stocks are juicing returns, with Amazon and Alphabet at 6.8% of assets each as of Dec. 31. Nvidia Corp., the fund’s eighth-largest holding at 2.8% of assets, is up 32%. Rounding out the fund’s top 10 is software company ServiceNow Inc., with a gain of 14% for the year.
Chicago-based Mesirow Fiduciary Solutions adds flexPATH's plan-level outsourced fiduciary book, boosting its retirement market reach to $164 billion.
Also, Raymond James's employee advisor channel adds breakaways from Wells Fargo and Stifel, while UBS welcomes an ex-Morgan Stanley duo in Indiana.
It promised guaranteed principal and 10% monthly returns. The SEC says it invested nothing.
Ten years after entering the fee-based annuity market, MassMutual Ascend says nearly half its lifetime sales came in the past two years alone – but barriers remain among fee-only advisors.
Amplify, WealthReach, Zeplyn and Zocks have unveiled partnerships aimed at automating portfolio management, content creation, account opening, and client communication.
Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
