The Trustees of the Equity-League 401(k) Plan are continually looking for ways to enhance the investment options available to you. As part of that effort, the Plan replaced one current investment option with a new one. Effective May 26, 2017, the Vanguard REIT Index Fund was added to the Plan’s Real Estate investment option, with the Morgan Stanley Institutional U.S. Real Estate Portfolio Fund being removed from the Plan.
Why this change is happening?
These changes are the result of an extensive review of the investment options available in the Plan when they perform such reviews. The Trustees consider issues such as fund investment styles, fund performance, stability, tenure of fund management teams, and expense ratio and administrative costs. While the Morgan Stanley Fund performed well when it was first added to the 401(k) Plan‘s investment portfolio almost 6 years ago, it has under performed during the past 1, 3 and 5-year periods when compared against its investment benchmark. The Vanguard REIT Index Fund has performed in line with the benchmark over the same time periods and their passive approach has outperformed most active managers within this investment class over time. In addition, it has a lower expense ratio, where you will see that the fee is being significantly reduced from 1.28% to 0.12% of fund assets.
What does the Real Estate Investment Trust Fund (REIT) Investment Option Mainly Target?
REIT investments focus primarily on real estate investment trusts of various types. Sector investments, such as REITs, may experience greater short-term price volatility than more diversified investments, and are most suitable for use in the aggressive portion of an investment portfolio.
Remember that past performance is no guarantee of future results. Due to market volatility, current performance may be less or higher than figures referenced in communications materials from John Hancock. Investment return and principal value will fluctuate so that, upon redemption, shares may be worth more or less than their original cost. Performance data does not reflect deduction of redemption fee, which, if such fee exists, would lower performance.
For the most recent month-end performance information for this new fund, or other funds available through the 401(k) Plan, please log onto the John Hancock website: mylife.jhrps.com or call a John Hancock representative at (800) 294-3575.