Top Tier ETF Providers Playoffs II
10/19/2010 0 comments
Based on an article published by Bank Investment Consultant by Matt Ackermann, Vanguard, one of the largest index fund and ETF providers, will offer commission-free trading to its brokerage clients that use its lineups of 46 proprietary ETFs. This represents a comparable move as Fidelity and Schwab. In addition to Fidelity and Schwab plans, MyPlanIQ now has a Vanguard major ETF plan. Notice since most Vanguard ETFs have short history, the performance data of the model portfolios are meaningful since 2003 (before that, most ETFs did not exist). The following is the list of the ETFs supported in this plan (for up to date info, please see the Vanguard ETF page.
| Consumer Discretionary | VCR | |
| Consumer Staples | VDC | |
| Dividend Appreciation | VIG | |
| Emerging Markets | VWO | |
| Energy | VDE | |
| Europe Pacific | VEA | |
| European | VGK | |
| Extended Duration Treasury | EDV | |
| Extended Market | VXF | |
| Financials | VFH | |
| FTSE All-World ex-US | VEU | |
| FTSE All-World ex-US Small-Cap | VSS | |
| Growth | VUG | |
| Health Care | VHT | |
| High Dividend Yield | VYM | |
| Industrials | VIS | |
| Information Technology | VGT | |
| Intermediate-Term Bond | BIV | |
| Intermediate-Term Corporate Bond | VCIT | |
| Intermediate-Term Government Bond | VGIT | |
| Large-Cap | VV | |
| Long-Term Bond | BLV | |
| Long-Term Corporate Bond | VCLT | |
| Long-Term Government Bond | VGLT | |
| Materials | VAW | |
| Mega Cap 300 | MGC | |
| Mega Cap 300 Growth | MGK | |
| Mega Cap 300 Value | MGV | |
| Mid-Cap | VO | |
| Mid-Cap Growth | VOT | |
| Mid-Cap Value | VOE | |
| Mortgage-Backed Securities | VMBS | |
| Pacific | VPL | |
| REIT | VNQ | |
| Short-Term Bond | BSV | |
| Short-Term Corporate Bond | VCSH | |
| Short-Term Government Bond | VGSH | |
| Small-Cap | VB | |
| Small-Cap Growth | VBK | |
| Small-Cap Value | VBR | |
| Telecommunication Services | VOX | |
| Total Bond Market | BND | |
| Total Stock Market | VTI | |
| Total World Stock | VT | |
| Utilities | VPU | |
| Value | VTV |
Vanguard ETFs's 401K plan consists of 43 funds. These funds enable participants to gain exposure to 5 major assets: Emerging Market Equity , Foreign Equity , Fixed Income , US Equity , REITs . The list of minor asset classes covered: Communications: IXP , PTE , DGG , LTL As of Oct 15, 2010, this plan investment choice is rated as averagebased on MyPlanIQ Plan Rating methodology that was designed to measure how effective a plan's available investment funds are . It has the following detailed ratings: Diversification -- Rated as above average (74%) The chart and table below show the historical performance of moderate model portfolios employing strategic and tactical asset allocation strategies ( SAA and TAA , both provided by MyPlanIQ). For comparison purpose, we also include the moderate model portfolios of a typical five asset SIB (Simpler Is Better) plan . This SIB plan has the following candidate index funds and their ETFs equivalent: REITs:( IYR or VNQ or ICF ) Performance table (as of Oct 15, 2010)
Consumer Discretionary: RXI , VCR
Consumer Staples: KXI , VDC , PSL , DPN , RHS
DIVERSIFIED EMERGING MKTS: EEM , GMM , PXH , DEM , SCHE
DIVERSIFIED PACIFIC/ASIA: EPP , VPL , GMF , PAF
Equity Energy: ITE,IXC , IPW , DBE , RYE , DKA
EUROPE STOCK: IEV , VGK , PEF , DEB
Financial: IYF , VFH , IPF , PFI , DRF , RYF
Foreign Large Blend: EFA , VEU , GWL , PFA
FOREIGN SMALL/MID GROWTH: IFSM , VSS , SCHC
Health: IYH,IXJ , VHT , XBI , PBE , DBR , RYH
Industrials: IYJ,EXI , VIS
Intermediate-Term Bond: AGG,CIU , BIV,BND
LARGE BLEND: IVV,IYY,IWV , VTI,VV , SPY , DLN , RSP , SCHX
LARGE GROWTH: IVW,IWZ,JKE , VUG , ELG , QQQQ , RPG , SCHG
LARGE VALUE: IVE,IWW,JKF , VTV , ELV , PWV , RPV , SCHV
LONG GOVERNMENT: TLT,TLH,IEF , EDV,VGLT , TLO , PLW
Long-Term Bond: CLY,LQD , BLV,VCLT
MID-CAP BLEND: IJH,IWR,JKG , VO , MDY,EMM , PJG , DON,EZM , MVV
Mid-Cap Growth: IJK,IWP , VOT , EMG , PWJ , RFG , UKW
MID-CAP VALUE: IJJ,IWS,JKI , VOE , EMV , PWP , RFV , UVU
Natural Resources: IYM,IGE , VAW , XLB,XME , PYZ , DBN , RTM , UYM
REAL ESTATE: IYR,ICF , VNQ
SHORT GOVERNMENT: SHY,SHV , VGSH , PLK , USY
Short-Term Bond: CSJ , BSV,VCSH
SMALL BLEND: IJR,IWM,JKJ , VB , DSC , PJM , DES , SAA,UWM , SCHA
Small Growth: IJT,IWO,JKK , VBK , DSG , PWT , RZG , UKK
SMALL VALUE: IJS,IWN,JKL , VBR , DSV , PWY , RZV , UVT
Technology: MTK , PTF , DBT , RYT , ROM
Utilities: GII , PUI , DBU , RYU , UPW
WORLD STOCK: IOO , VT
Fund Quality -- Rated as below average (33%)
Portfolio Building -- Rated as average (37%)
Overall Rating: average (47%)
Fixed Income:( AGG or BND )
Foreign Equity:( EFA or VEU )
Emerging Market Equity:( EEM or VWO )
US Equity:( SPY or VTI )
Performance chart (as of Oct 15, 2010)
| Portfolio Name | 1Yr AR | 1Yr Sharpe | 3Yr AR | 3Yr Sharpe | 5Yr AR | 5Yr Sharpe |
|---|---|---|---|---|---|---|
| Vanguard ETFs Tactical Asset Allocation Moderate | 10% | 67% | 6% | 39% | 13% | 84% |
| Vanguard ETFs Strategic Asset Allocation Moderate | 13% | 92% | 3% | 9% | 8% | 39% |
| Five Core Asset Index ETF Funds Tactical Asset Allocation Moderate | 10% | 65% | 7% | 48% | 15% | 103% |
| Five Core Asset Index ETF Funds Strategic Asset Allocation Moderate | 14% | 99% | 3% | 10% | 9% | 41% |
Currently, asset classes in REITs( IYR , VNQ , ICF ) , Fixed Income( AGG , BND ) and Emerging Market Equity( EEM , VWO ) are doing relatively well. These asset classes are available to Vanguard ETFs participants.
To summarize, Vanguard ETFs plan participants can achieve reasonable investment returns by adopting asset allocation strategies that are tailored to their risk profiles. Currently, the tactical asset allocation strategy indicates overweighing on reits , emerging market equity and fixed income funds.
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Symbols:SUB,SHM,PVI,SMB,EPP,AAXJ,GMF,PAF,DND,SHY,SHV,VGSH,PLK,USY,CSJ,BSV,VCSH,AOR,AOA,IGOV,BWX,WIP,IOO,VT,RWR,PSR,URE,IJS,IWN,JKL,VBR,DSV,PWY,RZV,UVT,IJT,IWO,JKK,VBK,DSG,PWT,RZG,UKK,IJR,IWM,JKJ,VB,DSC,PJM,DES,SAA,UWM,SCHA,ITM,MUB,TFI,PZA,MLN,AGG,GBF,BND,LAG,IJJ,ETFs,Portfolio,Building,Asset,Allocation,Commission,Free,
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