Through the market conditions of January 2008 to December 2009, Schwab found its SMRT funds outperformed the S&P 500 by an average 8.24%. The Income fund outperformed the S&P 500 by 20.1%, and the 2010 fund outperformed the S&P 500 by 13.6%.
A Schwab announcement said a dollar-cost-averaging investor closest to retirement (2010 fund) would have recovered nearly all principal (97%) as of December 2009. According to the analysis, even those furthest from retirement (2050 fund) would have recovered 87% of principal as of December 2009.
Schwab also found a dollar-cost-averaging investor would have nearly 15% more total value at the end of 2009 than if they invested in the S&P 500 compared to investors that stopped regularly contributing to their plans at the first dips in the market in January of 2008. In addition, individuals who remained invested in the Schwab funds and continued contributing from January 2008 to December 2009 did better than those that sold their funds at the end of the tumultuous 2008 year.
Schwab said it saw similar results in both target funds for 401(k) plans and retail funds.
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