News Corporation was founded in 1922 and is headquartered in New York, New York. The company operates as a diversified media company worldwide. The company's Filmed Entertainment segment produces and licenses television programming worldwide. Its Television segment develops, produces, and broadcasts television programming in Asia. The company's Cable Network Programming segment produces and licenses programming distributed through cable television systems and direct broadcast satellite operators primarily in the United States. Its Direct Broadcast Satellite Television segment distributes premium programming services via satellite and broadband directly to subscribers in Italy.

Its Newspapers and Information Services segment publishes The Times, The Sunday Times, The Sun, and News of the World national newspapers in the United Kingdom; approximately 146 newspapers in Australia; and metropolitan newspaper and a national newspaper in the United States, as well as offers various information services.

Its Other segment sells advertising, sponsorships, and subscription services on the company's various digital media; and outdoor advertising space on various media, primarily in the Russian Federation and eastern Europe. This segment also provides mobile entertainment services.

This article is part of a series of case studies we are conducting for various 401K plans. In this article, we will discuss how participants in News America (News Corp) 401k Savings Plan can achieve reasonable investment results using asset allocation strategies. We will also discuss how those portfolios are positioned in today’s market environment.

This plan is the News Corp (Ticker: NWS, NWSA) 401k Savings Plan. It has Self-Directed Brokerage option for participants.

News America (News Corp) 401k Savings Plan's 401K plan consists of 8 funds. These funds enable participants to gain exposure to 3 major assets: US Equity, Foreign Equity, Fixed Income. The list of minor asset classes covered:

Given that two of the options are company stock which is going to suffer from high volatility, the choices are somewhat restrictive and the lack of asset classes make this an old style plan.

As of Oct 26, 2010, this plan investment choice is rated as average based 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 poor (4%)
Fund Quality -- Rated as average (49%)
Portfolio Building -- Rated as average (65%)
Overall Rating: average (42%)

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 3 asset SIB (Simpler Is Better) plan . This SIB plan has the following candidate index funds and their ETFs equivalent:

US Equity: SPY or VTI
Foreign Equity: EFA or VEU
Fixed Income: AGG or BND

Performance chart (as of Oct 26, 2010)

Performance table (as of Oct 26, 2010)

Currently, asset classes in US Equity ( SPY , VTI ) , Foreign Equity ( EFA , VEU ) and Fixed Income ( AGG , BND ) are doing relatively well. These asset classes are available to News America (News Corp) 401k Savings Plan participants.

To summarize, News America (News Corp) 401k Savings Plan 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 US Equity , Foreign Equity and Fixed Income funds.

labels:investment,

Symbols:VTI,EFA,VEU,AGG,BND,IVV,IYY,IWV,VV,DLN,RSP,SCHX,CIU,BIV,GWL,PFA,IOO,VT,IJJ,IWS,JKI,VOE,EMV,PWP,RFV,UVU,IJS,IWN,JKL,VBR,DSV,PWY,RZV,UVT,