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Posted by Jane on March 17, 2008, 3:20 pm
90% of our savings is in a 401k. A very large portion is in the "John
Hancock Fixed Income Fund". Is there any protection for this money?
I'm not talking about protection against a drop in the interest rate,
I mean if JH goes down the tubes does our money go with it?
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Posted by Rich Carreiro on March 17, 2008, 4:35 pm
> 90% of our savings is in a 401k. A very large portion is in the "John
> Hancock Fixed Income Fund". Is there any protection for this money?
> I'm not talking about protection against a drop in the interest rate,
> I mean if JH goes down the tubes does our money go with it?
Can't answer without more information on exactly that the investment
is.
Is it a mutual fund that JH manages? If so, then JH going down
the tubes won't affect things, since the fund is a legally-separate
entity than JH.
On the other hand, if it is actually something backed by JH itself,
then yes, your money could be at risk if JH takes the dirt nap.
--
Rich Carreiro rlc-news@rlcarr.com
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Posted by joetaxpayer on March 17, 2008, 4:43 pm
Jane wrote:
> 90% of our savings is in a 401k. A very large portion is in the "John
> Hancock Fixed Income Fund". Is there any protection for this money?
> I'm not talking about protection against a drop in the interest rate,
> I mean if JH goes down the tubes does our money go with it?
The question is this, what is it invested in? And you may have a tough
time getting an answer to that. Fixed income may include mortgage based
products that are subject to the current market issues, although I
believe if there were any exposure, you'd have seen some price impact
already. You need to get more details as a search for "John Hancock"
"Fixed Income Fund" yields nothing for me. It may be a fund created for
your 401(k).
To answer the second half of your question, JH can go down the tubes and
your money may be safe if the assets within the fund are safe. A good
fund inside a failing investment house can survive unscathed.
JOE
www.blog.joetaxpayer.com
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Posted by PeterL on March 17, 2008, 5:20 pm
> 90% of our savings is in a 401k. A very large portion is in the "John
> Hancock Fixed Income Fund". Is there any protection for this money?
> I'm not talking about protection against a drop in the interest rate,
> I mean if JH goes down the tubes does our money go with it?
>
Diversify.
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Posted by on March 17, 2008, 6:36 pm
> 90% of our savings is in a 401k. A very large portion is in the "John
> Hancock Fixed Income Fund". Is there any protection for this money?
> I'm not talking about protection against a drop in the interest rate,
> I mean if JH goes down the tubes does our money go with it?
You have several entities involved here.
First off, your employer (and those who have a claim on
your employer's assets) have no claim on the assets in
the 401k.
Second, the administrator of the 401k doesn't either.
Third, the funds the 401k are invested in are (generally)
share classes of mutual funds. A mutual fund is a distinct
corporation - separate from both the manager of the fund
and the parent company which sponsored the creation of the
fund. If SomeFundX is a fund offered by SomeFundCompany
and subadvised (managed) by SomeManagerCompany, both
SomeFundCompany and SomeManagerCompany could go under
completely and the assets held by SomeFundX itself are
untouched. In general, at worst, some other company
would take over the responsibilities in managing the
assets and another company may take over other duties
(ie. acting as transfer agent), perhaps ultimately
merging the assets into some other fund to simplify
matters (in which case, your SomeFundX shares may be
swapped for SomeOtherFundX shares).
Your assets are generally as safe as whatever the fund
itself - internally - is invested in. Which isn't to
say that you can't lose money - but that'd generally be
due to the assets inside the fund stinking (ie. suppose
your fund held Bear Sterns bonds...), not due to the
management company (or your employer, or your plan's
administrator) going under. At least with respect to
a typical 401k invested in institutional class shares of
typical mutual funds.
--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting
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to keep the conversations on-topic for financial planning. Other posting
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