How is that computed, and are you sure that's the fund you're in? It's up over 7% over the past
three months. Please double-check where your money is.
The only thing I can think of is if they use a stupid formula for rate of return. It's not unheard of for some investments to have their return calculated as "current value / total contributed" - which means that your total return is closer to 0% every time you contribute. If it's early in your contribution time, or if you recently increased contribution amounts significantly, then it looks like you're gaining nothing. In short, your 401(k) provider might be stupid on their math.
A rollover from my previous employer, in a different account, is in the same fund, so I guess this means I need to change both. I had originally planned to break up my rollover out of that fund and match THAT allocation in order to get a lower expense ratio (averaged across the the three) but now I'm second-guessing myself.
First, see how that did. Chances are, it did much better. That's because you weren't adding to it regularly, and thus diluting the perceived returns.
Second, you shouldn't use past performance as an indicator of what to invest in,
especially short-term performance. These are among the
worst predictive factors of future performance. Sorry if that's perceived as shouting, but it's important - it's very counter-intuitive, but studies have borne this out.
Unless you plan to actively manage your portfolio (this is not recommended, and you don't seem all that interested in doing so, which is good), you should decide what your desired asset allocation is and use low-cost, low-turnover funds to fill these assets; index mutual funds and wrap funds based on the same are fantastic ways to go about this. If 10% bonds, 27% international stocks, 63% domestic stocks is your preferred allocation, VTIVX is a great way to go. If you want to manually manage the re-balancing, especially in order to gain the better expense ratio of Admiral shares, that's great (because VTIVX costs you exactly what it would cost you for investor shares of each of the underlying funds - it's somewhat ironic that the low cost triggers a SEC regulation that keeps there from being Admiral shares for target date funds). This would also allow you to take better advantage of tax efficiency for your pre-59.5 stash (assuming you're going the 'stocks & bonds' route for it).
