S&P500 fund significantly underperforming the market??

[Jags4186]

I have my 401k invested entirely in its lone index fund...

http://quicken.intuit.com/investing/mutual-funds/HVIIX/HIMCO-VIT-Index-Fund-Class-IB


How is it that this fund has underperformed the S&P500 by 2.5% over the last 10 years and 3.6% since its inception ??

Do I suck it up and try to pick some of the active funds in my portfolio?  This just seems unreal to me.

[tj]

I have my 401k invested entirely in its lone index fund...

http://quicken.intuit.com/investing/mutual-funds/HVIIX/HIMCO-VIT-Index-Fund-Class-IB


How is it that this fund has underperformed the S&P500 by 2.5% over the last 10 years and 3.6% since its inception ??

Do I suck it up and try to pick some of the active funds in my portfolio?  This just seems unreal to me.

What funds do you have available?

[GreenPen]

The fund has an expense ratio of .6%, which will cause it to underperform.

[beltim]

It looks like the site you have linked doesn't include dividends or distributions of the fund, causing it to underreport the actual returns.  Compare it to, for example: http://quote.morningstar.com/fund-filing/Summary-Prospectus/2014/5/1/t.aspx?t=HVIIX&ft=497K&d=b9a7e0785249e46e4253cb16adb596c1 which shows that it pretty well tracks the S&P 500, after subtracting expenses.

[PEIslander]

I was surprised how difficult it is to find info on this fund. The Morningstar page that Beltim linked has far more info than most sites where I expected to find good info. Most puzzling to me is just how awfully uninformative the sponsor's website is. http://www.himco.com appears to have no info on their fund!

I did find a thread about it at Bogleheads: http://www.bogleheads.org/forum/viewtopic.php?f=1&t=151357. There is the suggestion in the Boglehead thread that based on a reading of the prospectus the fund isn't a true 'index fund' in that it doesn't necessarily hold all the constituents of the S&P500. It just aims to provide returns that track the S&P500.

[sirdoug007]

Yeah, a strange fund indeed.  Here is the description on Bloomberg.  Not exactly sure what a Variable Insurance Trust is but I bet that is part of the explanation for under performance.

http://www.bloomberg.com/quote/HVIIX:US

"HIMCO VIT Index Fund is a variable insurance trust incorporated in the USA. The Fund seeks to provide investment results which approximate the price and yield performance of publicly traded common stocks in the aggregate. The Fund attempts to approximate the capital performance and dividend income of the S&P 500 Index." 

Here is the investopedia definition of an insurance trust: http://www.investopedia.com/terms/i/insurance_trust.asp

I'm betting hidden fees within the trust are eating away the performance.  Get a standard S&P500 ETF or mutual fund and you will do much better.

[sirdoug007]

Can you download a prospectus from your 401(k) website and post it here?  That would help tremendously as there is very little info on this fund on the internet.

You put the intuit website for the IB shares.  I hope that doesn't mean this...

"Class B shares with sales charges performance reflects a six-year declining Contingent Deferred Sales Charge of 5%, 4%, 3%, 3%, 2%, 1%, respectively."

https://www.hartfordfunds.com/funds.institutional-investors.$AllFunds.html#performance-tab

[Jags4186]

I've attached the prospectus and also all of my 401k options.

Yes this fund is almost impossible to find information about...I use TD Ameritrade and it doesn't even recognize that it exists.

I should also point out that the Hartford HLS fund on that excel spreadsheet was replaced by the HIMCO VIT fund.  It's just an old spreadsheet I put together before the changeover happened.  The funds are identical.

[skyrefuge]

I'm betting hidden fees within the trust are eating away the performance.

Before searching for bogeymen within the fund, I think the first step is to confirm whether or not the return numbers at the Quicken site are actually accurate. The fact that Morningstar doesn't have any return numbers at all makes me doubt the accuracy of Quicken's numbers, especially when they conflict with the fund's own prospectus.

I'm not sure if beltim's idea that the Quicken numbers exclude dividends is knowledge or speculation, but it seems like a reasonable hypothesis to me. The fact that the graph on that page is all screwy and it doesn't have any current price information also makes me doubt their data.

So my guess at this point is that it's a normally-performing S&P 500 fund with a 0.6% ER. Not great, but not as bad as the Quicken numbers make it seem. See if you can find any other source for its total return numbers.

[tj]

You don't really have any good choices. i d stick with the 500 index. Unless the Stable Value fund has a good interest rate.

[Financial.Velociraptor]

Best way to track the S&P is "VOO".