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Besides what Paul mentioned, your personal rate of return can be skewed by contributions. Those funds don't start contributing to your rate of return until the day after the shares are purchased. Since you only show one year on your personal rate of return, I suspect you have less than 3 years of contribution history, meaning that your current year's contributions were probably a significant fraction of the total.

I worked for 4 years at a company that used John Hancock funds. John Hancock has very high expense ratios. On top of that my employer's plan passed a management expense charge back to the employee. This was mentioned briefly, in passing in the fine print toward the back of the plan documents. The management expense was over 1%/year. I happen to read such documents.

I was a bad employee because I embarrassed the account rep by CC'ing a reply to a company-wide email distribution list where I pointed out that the effective expense ratio of our lowest-cost, unmanaged index fund was over 2%/year. This additional expense was never reported anywhere in any account statement or other formal document - your account would just lose some (fractional) fund shares every month. It was easy to miss too, because it would tend to coincide with contributions.

Unfortunately I couldn't get management interested in it because and I paraphrase, "But why do we care? The market is going up, I'm making money and I've never lost money in these accounts!" Fortunately management found my work too valuable to give me cr*p about these complaints.

Of course the market collapsed during my last year there - 2008. Not that it mattered after that - the company collapsed too. But before that I was reamed for a few grand in expenses - aka commissions - by that plan.

- Joel
Who wonder's who's "retirement plan" that really was ... mine or the people that sold it to my employer?
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