Vanguard ETF: | 7.4%* | ||
Diversified Core: | 8.1%* | ||
Six Core Asset ETFs: | 7.3%* |
Articles on AOM
- New York Times -- How Plan Rating Stack up Against ETF Portfolios -- Part 1
11/02/2010
This is the first of three articles where we are going to examine how plan rating can be used to give you additional insight into the properties of a plan (collection of funds) and how they may perform going forward.We have previously examined News Corp's 401K plan. We found that while it was lacking in terms of diversity, it performed well within its scope -- beating the 3 Asset SIB with which it was comparable but losing out to the 4 Asset SIB.
We will now look at the New York Times Company's 401K plan and establish it's performance before comparing the two and examining how each of their ratings gives insight as to their performance. All of MyPlanIQ's plans have ratings so this equally applies to any retirement, taxable, VA, 529 or any other sort of plan.
The New York Times Company, a leading media company with 2009 revenues of $2.4 billion, includes The New York Times, the International Herald Tribune, The Boston Globe, 15 other daily newspapers and more than 50 Web sites, including NYTimes.com,Boston.com and About.com. The Company's core purpose is to enhance society by creating, collecting and distributing high-quality news, information and entertainment.
The New York Times 401K plan consists of 23 funds. These funds enable participants to gain exposure to 4 major assets: US Equity, Foreign Equity, Emerging Market Equity, Fixed Income. The list of minor asset classes covered:
Asset Class Ticker Name Intermediate-Term Bond DODIX Dodge & Cox Income Foreign Large Value DODFX Dodge & Cox International Stock SMALL BLEND LRSCX Lord Abbett Small-Cap Value A LARGE GROWTH PNOYX Putnam New Opportunities Y Emerging Markets EMF Templeton Emerging Markets Fund LARGE BLEND VFINX Vanguard 500 Index Investor Moderate Allocation VAARX Vanguard Asset Allocation Adm LARGE GROWTH VHCOX Vanguard Capital Opportunity Foreign Large Blend VWIGX Vanguard International Growth Target Date 2000-2010 VTOVX Vanguard Target Retirement 2005 Target Date 2000-2010 VTENX Vanguard Target Retirement 2010 Target Date 2011-2015 VTXVX Vanguard Target Retirement 2015 Target Date 2016-2020 VTWNX Vanguard Target Retirement 2020 Target Date 2021-2025 VTTVX Vanguard Target Retirement 2025 Target Date 2026-2030 VTHRX Vanguard Target Retirement 2030 Target Date 2031-2035 VTTHX Vanguard Target Retirement 2035 Target Date 2036-2040 VFORX Vanguard Target Retirement 2040 Target Date 2041-2045 VTIVX Vanguard Target Retirement 2045 Target Date 2050+ VFIFX Vanguard Target Retirement 2050 Retirement Income VTINX Vanguard Target Retirement Income LARGE BLEND REASX Russell U.S. Core Equity I CASH CASH Money Market Summary
US Equity 6 funds
International Equity 2 funds
Emerging Markets 1 fund
Fixed income 1 fund
Target date 11 funds
If we exclude the target date funds as they can't be used to build a portfolio as they are a portfolio in and of themselves, there are ten funds, six of which are US based.
As of Oct 29, 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 average (64%)
Fund Quality -- Rated as great (90%)
Portfolio Building -- Rated as below average (31%)
Overall Rating: average (59%)
The rating shows the lack of funds to really build a portfolio and that although there are four asset classes, two of them, most notably Fixed income, only have one fund each.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 4 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
Emerging Market Equity EEM or VWO
Fixed Income AGG or BNDPerformance chart (as of Oct 29, 2010)
Performance chart (as of Nov 1, 2010)
Performance table (as of Nov 1, 2010)
Portfolio Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe THE NEW YORK TIMES COMPANIES SUPPLEMENTAL RETIREMENT AND INVESTMENT PLAN Tactical Asset Allocation Moderate 10% 85% 7% 62% 13% 114% THE NEW YORK TIMES COMPANIES SUPPLEMENTAL RETIREMENT AND INVESTMENT PLAN Strategic Asset Allocation Moderate 14% 135% 1% 2% 7% 44% Four Core Asset ETF Index Funds Emerging Markets Tactical Asset Allocation Moderate 4% 36% 4% 34% 14% 90% Four Core Asset ETF Index Funds Emerging Markets Strategic Asset Allocation Moderate 13% 98% 0% -0% 8% 37% The results are mixed in the sense that the NYT portfolios outperform the SIBs in the one and three year categories but underperform the SIBs in the five year categories. The choice of multiple funds in the US and international equity categories will allow for styles rotation to find higher returns. However, in the other major categories there are only single options and the benefits of low fees and market index performance in the SIBs allow it to deliver higher performance.
To summarize having a four asset class portfolio is good. The number of funds in the plan is misleading as the target date funds don't assist in building a portfolio -- if you are a believer in target date funds then you have lots of choices. To further improve the portfolio, it is important to increase the fixed income choices immediately and then balance out emerging market choices from the US choices.
In the next article we will compare News Corp and New York Times to see how the plan rating numbers give insight to the quality of the overall plan.
labels:investment,Symbols:SPY,VTI,EFA,VEU,EEM,VWO,AGG,BND,AOM,CIU,BIV,GWL,PFA,EFV,PID,DWM,TZD,TZE,TZG,TZI,TZO,TZL,TZV,IVV,IYY,IWV,VV,DLN,RSP,SCHX,IVW,IWZ,JKE,VUG,ELG,QQQQ,RPG,SCHG,IJR,IWM,JKJ,VB,DSC,PJM,DES,SAA,UWM,SCHA,GMM,PXH,DEM,SCHE,
- Apple 401K: A Great Company with an Average Retirement Plan
10/19/2010
As one of the gee-whiz high tech companies, Apple Inc. (AAPL) is well known for its innovative consumer products such as Macs, iPods, iPhones and iPads. It is also a known fact for many high tech workers in San Francisco Bay Area that Apple provides wonderful employee benefits. In this article, we take a closer look at Apple's 401K plan'sfund lineups and its rating. We then discuss how participants in Apple 401K can achieve reasonable investment results using asset allocation strategies. We will also discuss how those portfolios are positioned in today’s market environment.
Apple 401K's 401K plan consists of 14 funds. These funds enable participants to gain exposure to 4 major assets: Fixed Income , US Equity , Foreign Equity , REITs . The list of minor asset classes covered:
Foreign Large Blend: EFA , VEU , GWL , PFAGlobal Real Estate: IFGL , RWXHigh Yield Bond: HYG , JNK , PHBIntermediate-Term Bond: AGG,CIU , BIV,BNDLARGE BLEND: IVV,IYY,IWV , VTI,VV , SPY , DLN , RSP , SCHXLARGE GROWTH: IVW,IWZ,JKE , VUG , ELG , QQQQ , RPG , SCHGModerate Allocation: AOMSMALL BLEND: IJR,IWM,JKJ , VB , DSC , PJM , DES , SAA,UWM , SCHAAs of 10/12/2010, 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 (80%)Fund Quality -- Rated as poor (9%)Portfolio Building -- Rated as above average (75%)Overall Rating: average (57%)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 four 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 )Fixed Income:( AGG or BND )Foreign Equity:( EFA or VEU )US Equity:( SPY or VTI )
Performance Chart (As of 10/12/2010)
Performance table
Portfolio Name
1Yr AR
1Yr Sharpe
3Yr AR
3Yr Sharpe
5Yr AR
5Yr Sharpe
9%
88%
7%
82%
10%
104%
9%
119%
1%
2%
5%
30%
Four Core Asset Index Funds REITs Tactical Asset Allocation Moderate
11%
78%
5%
48%
10%
91%
Four Core Asset Index Funds REITs Strategic Asset Allocation Moderate
13%
98%
0%
-0%
6%
24%
Currently, asset classes in REITs, Fixed Income and High Yield Bonds are doing relatively well. These asset classes are available to Apple 401K participants.
To summarize, Apple 401K plan participants can achieve reasonable investment returns by adopting asset allocation strategies that are tailored to their risk profiles. Currently, funds the tactical asset allocation strategy over weighs include REITs and High Yield Bonds. However, Apple can do better to her employees by improving its fund selection such as making better funds available.labels:investment,
Symbols:SPY,IVV,IWV,VTI,VV,DLN,IVW,IWZ,JKE,VUG,ELG,QQQQ,RPG,SCHG,AOM,IWM,IJR,VB,DSC,JKJ,SCHA,AGG,BND,CIU,BIV,HYG,JNK,PHB,EFA,VEU,GWL,PFA,ETFs,Portfolio,Building,401K,
labels: investment
Symbols: SPY, IVV, IWV, VTI, VV, DLN, IVW, IWZ, JKE, VUG, ELG, QQQQ, RPG, SCHG, AOM, IWM, IJR, VB, DSC, JKJ, SCHA, AGG, BND, CIU, BIV, HYG, JNK, PHB, EFA, VEU, GWL, PFA, ETFs, Portfolio Building, 401K
- Aflac Incorporated 401(k) Savings and Profit Sharing Plan Report On 12/03/2010
12/03/2010
This report reviews Aflac Incorporated 401(k) Savings and Profit Sharing Plan plan. We will discuss the investment choices and present the plan rating by MyPlanIQ. Current economic and market conditions are discussed in the context of the investment portfolios in the plan. We will then show how participants in Aflac Incorporated 401(k) Savings and Profit Sharing Plan can achieve reasonable investment results using asset allocation strategies.
Plan Review and Rating
AFLAC Inc (Ticker:AFL) has the "Aflac Incorporated 401(k) Savings and Profit Sharing Plan".
Aflac Incorporated 401(k) Savings and Profit Sharing Plan's 401K plan consists of 11 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:
Foreign Large Blend: EFA, VEU, GWL, PFA
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
Mid-cap Growth: IJK, IWP, VOT, EMG, PWJ, RFG, UKW
Moderate Allocation: AOM
Small Growth: IJT, IWO, JKK, VBK, DSG, PWT, RZG, UKK
As of Dec 2, 2010, this plan investment choice is rated as based on MyPlanIQ Plan Rating methodology that measures the effectiveness of a plan's available investment funds. It has the following detailed ratings:
Diversification -- Rated as (35%)
Fund Quality -- Rated as (33%)
Portfolio Building -- Rated as (36%)
Overall Rating: (35%)Current Economic and Market Conditions
We have experienced an uncertain 2010: plenty of worries on whether the US economy will climb out of the great recession and recover.
- The Federal Reserve embarked on Quantitative Easing II (QE2) to stimulate the economy.
- The housing market is still at its low but largely stabilized.
- The unemployment rate is stuck at 9%.
Americans continue to face an uncertain future, given (among others) the high unemployment rate, large federal and local government debts and global trade imbalance. With such an economic backdrop, the stock and debt markets are going to be volatile. Despite this, markets have been resilient and appear positioned to rebound.
In this market it is even more critical to properly diversify and respond market changes. MyPlanIQ offers two asset allocation strategies: strategic and tactical asset allocation strategies ( SAA and TAA for participants in Aflac Incorporated 401(k) Savings and Profit Sharing Plan).
Strategic Asset Allocation is based on well known modern portfolio theory and its key features include: diversification, proper fund selection and periodically re-balancing.
Tactical Asset Allocation works on a diversified array of assets provided by funds in a plan and adjusts asset mixes based on market conditions such as asset price momentum utilized by TAA.
Portfolio Discussions
The chart and table below show the historical performance of moderate model portfolios employing strategic and tactical asset allocation strategies. 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 Dec 2, 2010)Performance table (as of Dec 2, 2010)
Portfolio Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe Aflac Incorporated 401(k) Savings and Profit Sharing Plan Tactical Asset Allocation Moderate 4% 34% 5% 64% 8% 81% Aflac Incorporated 401(k) Savings and Profit Sharing Plan Strategic Asset Allocation Moderate 10% 100% 2% 8% 6% 31% Three Core Asset ETF Index Funds Tactical Asset Allocation Moderate -4% -35% 1% 9% 4% 27% Three Core Asset ETF Index Funds Strategic Asset Allocation Moderate 9% 60% -0% -3% 4% 13% 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 Aflac Incorporated 401(k) Savings and Profit Sharing Plan participants.
To summarize, Aflac Incorporated 401(k) Savings and Profit Sharing Plan plan participants can achieve reasonable investment returns by adopting asset allocation strategies that are tailored to their risk profiles.
Symbols: AFL , SPY , VTI , EFA , VEU , AGG , BND , AOM , CIU , BIV , GWL , PFA , IVE , IWW , JKF , VTV , ELV , PWV , RPV , SCHV , IVV , IYY , IWV , VV , DLN , RSP , SCHX , IVW , IWZ , JKE , VUG , ELG , QQQQ , RPG , SCHG , IJK , IWP , VOT , EMG , PWJ , RFG , UKW , IJT , IWO , JKK , VBK , DSG , PWT , RZG , UKK
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