10/28/2010

comments(2) 

10/19/2010

TD Ameritrade (Ticker: AMTD) just announced that it offers 100+ commission free ETFs for its clients.The 100+ (a precise number is 101) ETFs were selected by Morningstar that include ETFs from iShares, Vanguard, State Street, PowerShares, and others. In comparison, Schwab's free ETFs include only 11 of its own funds. Similarly, Vanguard offers 47 Vanguard ETFs for free. Fidelity was the first one that offers 25 iShares ETFs for free. See the official TD Ameritrade offering for more details.

MyPlanIQ views this is a very significant step for small investors (well we are not sure whether TD Ameritrade would still offer such a deal to very large accounts). We have constructed an investment plan TD Ameritrade Commission Free ETFs to take advantage of these ETFs. Though for the trades of these ETFs to be eligible for commission free, TD Ameritrade's customers have to hold these ETFs for more than 30 days, such a restriction is not significant for our plan since the plan only rebalances at most once per month. In this plan, the minimum holding period for each fund is set to be 1 month, which is equivalent to 30 days.

TD Ameritrade Commission Free ETFs's 401K plan consists of 101 funds. These funds enable participants to gain exposure to 6 major assets: Emerging Market Equity , Foreign Equity , Fixed Income , US Equity , Commodity , REITs . We view this is the most comprehensive coverage of major asset classes. 

The list of minor asset classes covered are: 

COMMODITIES BROAD BASKET: GSG , DBC 
Conservative Allocation: AOK 
DIVERSIFIED EMERGING MKTS: EEM , GMM , PXH , DEM , SCHE 
Emerging Markets Bond: PCY 
EQUITY: VTI,VT 
EUROPE STOCK: IEV , VGK , PEF , DEB 
Foreign Large Blend: EFA , VEU , GWL , PFA 
Foreign Large Growth: EFG 
Foreign Large Value: EFV , PID , DWM 
FOREIGN SMALL/MID GROWTH: IFSM , VSS , SCHC 
Foreign Small/Mid Value: SCZ 
Global Real Estate: IFGL , RWX 
High Yield Bond: HYG , JNK , PHB 
Inflation-Protected Bond: TIP 
Intermediate Government: IEI , VGIT , ITE 
Intermediate-Term Bond: AGG,CIU , BIV,BND 
JAPAN STOCK: EWJ , JPP , PJO , DXJ 
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 
Latin America Stock: ILF , GML 
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 
Moderate Allocation: AOM 
Multisector Bond: AGG,GBF , BND , LAG 
Muni National Interm: ITM 
Muni National Long: MUB , TFI , PZA , MLN 
Muni National Short: SUB , SHM , PVI , SMB 
PACIFIC/ASIA EX-JAPAN STK: EPP,AAXJ , GMF , PAF , DND 
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 
SPECIALTY-REAL ESTATE: RWR , PSR , URE 
World Allocation: AOR , AOA 
WORLD BOND: IGOV , BWX,WIP 
WORLD STOCK: IOO , VT

As of Oct 15, 2010, this plan investment choice is rated as above 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 great (97%) 
Fund Quality -- Rated as below average (29%) 
Portfolio Building -- Rated as great (90%) 
Overall Rating: 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 ) 
Fixed Income:( AGG or BND ) 
Commodity:(DBC) 
Foreign Equity:( EFA or VEU ) 
Emerging Market Equity:( EEM or VWO ) 
US Equity:( SPY or VTI ) 
Performance chart (as of Oct 15, 2010)

Performance table (as of Oct 15, 2010)

To summarize, TD Ameritrade Commission Free ETFs plan is very comprehensive and allows investors to achieve significant performance with reasonable risk. With now all of the top discount brokers (Fidelity, Schwab and TD Ameritrade) offering such commission free ETFs, investors are now free from trading cost and focus on portfolio building in terms of better asset allocation strategies. 

labels:investment,

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,

comments(0) 

10/19/2010

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 
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

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%) 
Fund Quality -- Rated as below average (33%) 
Portfolio Building -- Rated as average (37%) 
Overall Rating: average (47%)

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 ) 
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)

Performance table (as of Oct 15, 2010)

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.

labels:investment,

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,

comments(0) 

10/19/2010

• The expense ratios are low
• There are four asset classes with a good choice of funds
• We would have liked to have seen more choices with other providers
• We would have liked to have seen funds with a longer history
• We would expect real estate to be added before long
• We would expect more choices in the international and emerging market segments before long

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)

 

Performance table (as of Oct 15, 2010)

• A large number of ETF’s in six asset classes to allow the construction of high performance portfolios
• Providing ETF’s with history from industry leading suppliers

labels:investment,

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,

comments(0) 

10/08/2010

• 25% in Vanguard 500 Index VFINX                                     (IVW)
• 25% in Vanguard Small Cap NAESX or VTMSX                 (VB)
• 25% in Vanguard Total International VGTSX or VTMGX     (EFA, VEA)
• 25% in Vanguard Total Bond VBMFX or VBISX                  (BND)

• Heavily weighted towards domestic equities
• Similar to a three asset SIB with domestic, international and fixed income 
  
• It would be better to have some REIT or emerging markets exposure
• We will compare the no brainer portfolio to a three and four asset SIB

full chart

The Bernstein no-brainer tracks very closely with the four asset SIB. It’s interesting to note that the three asset Bernstein tracks closer to the four asset SIB than expected. So as a lazy portfolio, it performs satisfactorily. Year to date, however, the four asset SIB has better performance. 

• 40% Vanguard Short Term Investment Grade VFSTX                (SCJ, SHY)
• 15% Vanguard Total Stock Market VTSMX                                  (VTI)
• 10% Vanguard Small Cap Value VISVX                                          (VBR)
• 10% Vanguard Value Index VIVAX                                                (VTV)
• 5% Vanguard Emerging Markets Stock VEIEX                              (VWO)
• 5% Vanguard European Stock VEURX                                           (VEU)
• 5% Vanguard Pacific Stock VPACX                                                (VPL)
• 5% Vanguard REIT Index VGSIX                                                      (RWX, VNQ)
• 5% Vanguard Small Cap Value NAESX or VTMSX                        (VB) 

• 40% in US equities
• 10% in international equities
• 5% in emerging market equities
• 5% in REIT
• 40% in fixed income

 

Although the smart money portfolio has five asset classes, international, emerging markets and real estate are so under-weighted that they act as if they are a single class so, again, it’s more like a three asset class portfolio. The five asset SIB with strategic asset allocation has similar behavioral properties but clearly delivers better results based on superior diversification.

They are remarkably close to each other full comparison

• Tactical Asset Allocation reduces downside risk and that wins in the current uncertain environment
• Both Bernstein portfolios perform satisfactorily for a lazy portfolio – it is surprising that the no-brainer performs so well against it’s more diversified smart-money cousin
• ETF’s can readily be used to implement these portfolios with good performance

labels:investment,

Symbols:BND,BWX,CIU,CSJ,DBC,DVY,EFA,EFG,EFV,EMB,GLD,HYG,IEF,IEI,IJJ,IJK,LQD,MBB,QQQQ,RWX,SCZ,SHY,TIP,VB,VBK,VBR,VEA,VNQ,VO,VTI,VTV,VUG,VWO,WIP,Portfolio-Building,with,ETFs,Closed-End,Funds,Commodity,ETFs,Currency,ETFs,Developed,Market,ETFs,

comments(0) 

10/08/2010

09/17/2010

12/03/2010

This report reviews ALLERGAN, INC. SAVINGS AND INVESTMENT 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 ALLERGAN, INC. SAVINGS AND INVESTMENT PLAN can achieve reasonable investment results using asset allocation strategies.

Plan Review and Rating

ALLERGAN, INC. SAVINGS AND INVESTMENT PLAN's 401K plan consists of 13 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
Moderate Allocation: AOM
Short Government: SHY, SHV, VGSH, PLK, USY
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
World Stock: IOO, VT

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 (21%)
Fund Quality -- Rated as (16%)
Portfolio Building -- Rated as (31%)
Overall Rating: (24%)

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 ALLERGAN, INC. SAVINGS AND INVESTMENT 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)

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 ALLERGAN, INC. SAVINGS AND INVESTMENT PLAN participants.

To summarize, ALLERGAN, INC. SAVINGS AND INVESTMENT PLAN plan participants can achieve reasonable investment returns by adopting asset allocation strategies that are tailored to their risk profiles.

Symbols: AGN , 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 , IOO , VT , SHY , SHV , VGSH , PLK , USY , IVW , IWZ , JKE , VUG , ELG , QQQQ , RPG , SCHG , IJS , IWN , JKL , VBR , DSV , PWY , RZV , UVT , IJR , IWM , JKJ , VB , DSC , PJM , DES , SAA , UWM , SCHA , IJT , IWO , JKK , VBK , DSG , PWT , RZG , UKK

12/03/2010

12/03/2010

12/03/2010

12/03/2010

12/07/2010

12/07/2010

03/21/2011