Why doesn't my 401k statement match the value for the fund?

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Why doesn't my 401k statement match the value for the fund?

Post by notmyhand » Sun Nov 19, 2017 12:17 pm

My husband has John Hancock for his 401k. He is invested in the only Total Stock Mark Index Fund available which shows it is invested solely in JHVIT - Total Stock Market Index Trust (Class 1). It says the Ticker Symbol is JETSX. When I do the math I should have about $15k in JETSX but my 401k account says over 17k. Looking into it, best that the John Hancock website tells me is -

+ When contributions are allocated to Funds under your employer's group annuity contract with John Hancock, they will be held in a sub-account (also referred to as "Fund"), which invests in shares of the specified underlying mutual fund, collective trust, ETF or a combination of these. The ticker symbols shown are for the underlying mutual fund, collective trusts or ETFs in which sub-accounts are invested. The ticker symbols do not directly apply to the John Hancock sub-account and therefore any public information accessed using these symbols will not reflect the unit value of the subaccount, nor will such information reflect sub-account, contract-level or participant-level charges under your plan's group annuity contract.

Can anyone explain this in layman's terms? Is it similar to ETFs where the ETF fund invests in a basket of securities so the ETF value is not directly the same as the underlying fund? I am concerned that I do not understand what is going on. Any pros/cons that I need to be aware of?

Thank you.

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Re: Why doesn't my 401k statement match the value for the fund?

Post by Kenkat » Sun Nov 19, 2017 1:21 pm

John Hancock collects all of the money in and money out of each fund each day and then makes a single net transaction to the fund each day. They also deduct plan expenses from the unit value / fund price each day as well as add dividends or capital gains paid to the fund, which causes the unit value of the fund to diverge from the publicly available version of the fund.

In other words, John Hancock is the owner of record of the fund and you have an ownership interest in that fund. It is called a separate account because it is separate from John Hancock’s other assets. It is a private version of the publicly available fund - your investments are “passed through” to the actual fund.

My 401(k) works the same way.

Hope this makes sense.

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Re: Why doesn't my 401k statement match the value for the fund?

Post by Dale_G » Sun Nov 19, 2017 5:24 pm

Often in this type of plan, reinvested dividends result in an increase in the Net Asset Value (NAV) of your fund rather than an increase in the number of shares as would be the case in the in the underlying fund. I am sure the JH value of $17,000 is correct rather than the $15,000 you might calculate using the NAV of the underlying.

Many 401k quarterly reports (particularly JH) are confusing and difficult to understand. The better way to track performance is to visit the JH 401k website itself. One of my sons had a 401k at JH. The website presented a better picture of what was going on than the convoluted quarterly report.

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