My mother put about $60k into a John Hancock “lifestyle conservative” retirement fund around 2014 and hasn’t touched it since. I just started helping her look at her finances and saw that it’s now worth about $39k. I checked the statements and did not see any withdrawals or additional deposits. The value graph on the website just shows a progressive loss in value.
I don’t know much about investing, but this seemed really off to me. I would have expected at least some growth over that time, even if it’s a conservative account. Losing that much over 12 years feels wrong, but maybe I’m misunderstanding something.
There doesn’t seem to be big fees (it says around $25/year), and she hasn’t taken any money out.
Is this kind of performance actually normal for a conservative retirement fund? What could cause something like this? Is there anything we should be doing now, or anything we should look into in terms of possible mistakes or issues?
She’s not very financially savvy and didn’t keep track of it, so I’m trying to figure this out from scratch. Any guidance would be really appreciated. Happy to answer any questions/provide additional information.
EDIT: Found the ticker, its JALRX
EDIT2: Thanks everyone, I think I found the smoking gun. It looks like my mother DID make withdrawals, I just did not understand them before. They are labeled as "normal distribution" in the statements. There are numerous entries in each year of statements, and I was looking for "withdrawal", so this did not stick out to me. Here is an example:
https://i.imgur.com/Er1FRfF.png
I found a "normal distribution" of 10k in 2017, 6k in 2018 and 15k in 2019 so I think this makes sense. I think my mother was mistaken when she didn't believe she had withdrawn
Mother placed $60k into a John Hancock “conservative” retirement fund in 2014 which is now worth $39k. Is this normal?
byu/refract0638 inpersonalfinance
Posted by refract0638
21 Comments
that’s absolutely not normal, conservative funds should’ve at least kept pace with inflation over 12 years – might want to dig into what fees they’re actually charging because a $21k loss screams high expense ratios or some other hidden costs
Stock market since 2014 has like tripled. I am not even talking individual stocks or risky investments… That isn’t even including dividends, so she should be like almost 200k by now.
Sounds like she got scammed super hard.
I would definitely look back into the fee structure….
Also, “conservative fund” doesn’t really mean anything. Likely a high amount of bonds (hopefully) but it’s just a marketing term.
You need to see how the money is actually invested
This? JTOIX? https://www.jhinvestments.com/investments/mutual-fund/asset-allocation-funds/multimanager-lifestyle-conservative-portfolio-i-jtoix#managers
0.92% expense ratio is approaching robbery
It’s possible the dividends aren’t being reinvested and/or you’re just looking at NAV without dividends, but that doesn’t explain a $21k loss https://testfol.io/?s=dMCUBtLTLSx
edit: JALRX is worse, though not $21k worse https://testfol.io/?s=cOMlt1wTmxD . 1.23% ER *is* robbery.
Do you have the exact five-letter symbol of the fund? Also what kind of account is it in (taxable, 401k, IRA, etc.)?
Which specific fund?
Pull the 5 character ticker.
JALRX is not down 33% over 12 years that doesn’t make sense. JALRX is ~20% equities and ~80% fixed income.
Edit- new account this has gotta be engagement bait.
Is it normal for an investment to be -30% over a 12 year period? No, no it’s really not. Especially since the s&p is up like 300% in that time.
I can’t even speculate on what that is but it was not a good choice.
Not possible without her having had taken funds out along the way. Get on the phone with JH and your mom and they can verify anything. Not that hard to figure out.
Is it normal? The market has had insane growth in the last 10 years. You could blindfold yourself and pick stocks out of a hat and probably lose less money than that. My portfolio has grown 15% each year the past 3 years just being in simple mutual funds and ETFs
It looks like it’s a fund that pays out a five of 4%, which is pretty high. But they charge 1.2% per year after taking 4.5% right away and the investment return appears horrendous.
Really not a good choice. Maybe she got some dividend checks though
Without fees or taxes this should comfortably be over 100k by now, nearer 150k. Thats assuming all dividends were reinvested and no withdrawals were made.
The JALRX fund is down like 10% from whatever its high in 2014 is. Thats not accounting for dividends, just the price of a share.
The issue is that it is 20% in equity funds and 80% in bonds. Bond funds got destroyed after 2021. So thats the problem.
Very unfortunate but thats what happened. For comparison Vanguard’s target 2025 fund (which balances stocks and bonds over time with goal being preserving value at a 2025 retirement) is 20% up over that same period. Again due to the shift of the fund to bonds and bonds getting hammered.
The 2055 vanguard fund is up about 100% over that period because it has less exposure to bonds until getting closer to that 2055 time.
VOO is the SP500 and it’s up 250% over that period.
It’s a pretty awful fund. 4.5% sales load, meaning the minute she put $60K in it, her balance became $57,300. Expense ratio is 1.22% which is very high, BUT 10 year total return is around 3.75% (that’s after the ER and sales load).
So if her 12 year performance is down by $18K or so, there almost HAS to be something dragging down the returns. It could be something as simple as the dividends not being reinvested, i.e. either accruing to a separate cash balance, or possibly even being paid out to her in cash. A lot of retired people buying an income fund do so in order to receive cash for living expenses – check to see if she might be getting a quarterly direct deposit in Jan, Apr, Jul, and Oct.
JALRX is an A-Share mutual fund.
The front end load is 4.50%. Which means your $60k likely paid ~$2.5k – $3k in upfront fees.
Looking at the price around 2014, it was as high as $14 and as low as $12.50. Based on the most recent NAV ($12.27) this could show losses of 2% – 12% over that time period totally dependent on when it was purchased.
Additionally it’s got an expense ratio of 1.22%, which only adds to the losses over the time period because returns are negative.
So, it’s peculiar to see, but totally justifiable based on the fund and the timing. I’d definitely want to move allocations around based on that experience.
John Hancock is, by the way, about as terrible as Edward Jones.
No, that’s isn’t really possible. A “conservative” portfolio is something like 20% equities, 80% bonds. Even that would be like $100K today.
That fund has a 4.5% front load and a really high ER of 1.22%, but even those would only chip away $20K or so.
If she was taking the dividends out of the account that would bleed it down further but I still can’t imagine it would lost that much value, should be closer to break even.
I’d wager virtually *no* mutual funds have lost 35% total over a 12 year period, least of all a conservative fund. Something is not adding up.
* [JALRX shows](https://www.morningstar.com/funds/xnas/jalrx/performance) a 10 year average annual return of 4.04%; 15 year AAR of 3.89%. So it’s definitely not the fund performance.
* And even exorbitant fees can’t bleed an account *that* badly. She could be making withdrawals, or you could be looking at a graph that isn’t telling you what you think it is.
I’d call JH, they should be able to clear this up.
Its mostly a bond fund and interests rates have gone up and down drastically in the last 12 years so timing is crucial.
keep in mind this holding also throws off dividends which means some of the gain in the fund was thrown off in cash to the holders. Its TOTAL return, not just the return of the fund itself that counts.
check with the financial advisor to find out where/which bank acct# that the money from those withdrawals was sent to.
confirm that its an acct# your mothers actually owns.
then check that acct #’s bank statements for the months the withdrawals happened to confirm they were deposited into that bank acct.
JALRX is down to about 12.30$ from the *assumed* 13.69$ that your mom may have entered into. She may have received dividends, but the yield was on average, about 0.1$ per share.
She wouldn’t have made much, if she did have payments reinvested, there should have at least been some form of growth over these 15 years. Hopefully her explanation of her withdrawals helps you figure out where the money really went