Vanguard ETF: | 7.4%* | ||
Diversified Core: | 8.1%* | ||
Six Core Asset ETFs: | 7.3%* |
Articles on ICF
- Top Tier ETF Broker Playoffs II
10/26/2010
ETF’s continue to broaden their appeal both in terms of flexibility and low cost. With commission free ETF’s, more money stays in the investors pocket rather than disappearing in fees. We have completed the first analysis of TD Ameritrade and Schwab, we now proceed to examine Vanguard and Fidelity – two long term ETF providers.
Vanguard is one of the largest index fund and ETF providers offering commission-free trading to its brokerage clients that use its lineups of 62 proprietary ETFs. Commission free ETF's are also offered by Fidelity and Schwab but Vanguard has the highest number of proprietary funds available.
These funds enable participants to gain exposure to 5 major assets: Us Equity , Foreign Equity , Emerging Market Equity , Reits , Fixed Income .
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
High Yield Bond: HYG , JNK , PHB
Industrials: IYJ , EXI , VIS
Intermediate Government: IEI , VGIT , ITE
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 22, 2010, this plan investment choice is rated as 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 (57%)
Fund Quality -- Rated as average (60%)
Portfolio Building -- Rated as average (39%)
Overall Rating: average (50%)
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 5 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 )
Reits:( IYR or VNQ or ICF )
Fixed Income:( AGG or BND )
Performance chart (as of Oct 22, 2010)Performance table (as of Oct 22, 2010)Portfolio Name1Yr AR1Yr Sharpe3Yr AR3Yr Sharpe5Yr AR5Yr Sharpe13%83%6%35%13%81%15%116%2%6%8%42%11%72%7%54%15%105%14%103%3%13%9%41%
Currently, asset classes in Emerging Market Equity( EEM , VWO ) , Reits( IYR , VNQ , ICF ) and Fixed Income( AGG , BND ) are doing relatively well. These asset classes are available to Vanguard 62 participants.
Fidelity now makes trading 25 iShares ETFs for free. These ETFs cover complete US equity sizes and styles (large/mid/small caps and growth/blend/value styles). It covers international equity markets well too. In additon, it has good fixed income ETFs. The missing major asset classes are REITs and commodities. We hope those will be made free too. A plan called Fidelity Commission Efficient ETFs extends this plan by including several addtional ETFs (which cost $7.95 flat commission per trade).Fidelity 25 Commission Free ETFs's 401K plan consists of 25 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:Diversified Emerging Mkts: EEM , GMM , PXH , DEM , SCHE
Emerging Markets Bond: PCY
Foreign Large Blend: EFA , VEU , GWL , PFA
Foreign Small/mid Value: SCZ
Inflation-protected Bond: TIP
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-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
Muni National Long: MUB , TFI , PZA , MLN
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 Oct 22, 2010, this plan investment choice is rated as 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 (63%)
Fund Quality -- Rated as poor (9%)
Portfolio Building -- Rated as below average (14%)
Overall Rating: below average (27%)
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 BND )
Performance chart (as of Oct 22, 2010)
Performance table (as of Oct 22, 2010)Portfolio Name1Yr AR1Yr Sharpe3Yr AR3Yr Sharpe5Yr AR5Yr Sharpe3%24%3%19%11%71%10%68%-0%-3%7%28%2%14%6%47%14%90%10%75%2%5%8%37%
Currently, asset classes in Foreign Equity( EFA , VEU ) , Emerging Market Equity( EEM , VWO ) and Fixed Income( AGG , BND ) are doing relatively well. These asset classes are available to Fidelity 25 Commission Free ETFs participants.
To summarize:- Vanguard 62 Commission Free ETFs plan participants have seen returns in the 8-13% range for a moderate portfolio with strategic and tactical asset allocation based on having a five asset class portfolio.
- Fidelity 25 Commission Free ETFs plan participants have seen returns in the 7-11% range for a moderate portfolio with strategic and tactical asset allocation based on having a five asset class portfolio.
labels:investment,
Symbols:AGG,BIV,BLV,BND,BSV,CIU,CLY,CSJ,DBE,DBN,DBR,DBT,DBU,DEB,DEM,DES,DGG,DKA,DLN,DON,DPN,DRF,DSC,DSG,DSV,EDV,EEM,EFA,ELG,ELV,EMG,EMM,EMV,EPP,EXI,EZM,GII,GMF,GMM,GWL,HYG,ICF,IEF,IEI,IEV,IFSM,IGE,IJH,IJJ,IJK,IJR,IJS,IJT,IOO,IPF,IPW,ITE,IVE,IVV,IVW,IWM,IWN,IWO,IW,
- Ford Motor Company 401K Plan: Diversified and High Quality
10/24/2010
In this article, we will discuss Ford Motor 401K .
Ford Motor Company (Ticker: F) designs, develops, manufactures, and services cars and trucks worldwide. It operates in two sectors, Automotive and Financial Services. Ford Motor Company was founded in 1903 and is based in Dearborn, Michigan. Ford is one of the pioneers in automobile industry.
Ford Motor 401K's 401K plan consists of 24 funds. These funds enable participants to gain exposure to 4 major assets: Us Equity , Foreign Equity ,REITs, Fixed Income . The list of minor asset classes covered:
Foreign Large Blend: EFA , VEU , GWL , PFA
Foreign Small/mid Growth: IFSM , VSS , SCHC
Global Real Estate: IFGL , RWX
Inflation-protected Bond: TIP
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
Mid-cap Blend: IJH , IWR , JKG , VO , MDY , EMM , PJG , DON , EZM , MVV
Retirement Income:
Small Blend: IJR , IWM , JKJ , VB , DSC , PJM , DES , SAA , UWM , SCHA
Target Date 2016-2020: TZG
Target Date 2026-2030: TZL
Target Date 2036-2040: TZV
Target Date 2050+:
World Stock: IOO , VTAs of Oct 22, 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 above average (76%)
Fund Quality -- Rated as above average (69%)
Portfolio Building -- Rated as above average (71%)
Overall Rating: above average (72%)The Fund Quality ranking is very reasonable. Its selection includes Fidelity Contrafund, Neuberger Berman Genesis Instl and Royce funds.
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 )
Reits:( IYR or VNQ or ICF )
Fixed Income:( AGG or BND )
Performance chart (as of Oct 22, 2010)Performance table (as of Oct 22, 2010)
Portfolio Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe Ford Motors 401K Tactical Asset Allocation Moderate 7% 52% 8% 77% 11% 98% Ford Motors 401K Strategic Asset Allocation Moderate 11% 107% 2% 9% 6% 34% Four Core Asset Index Funds REITs Tactical Asset Allocation Moderate 12% 82% 6% 58% 10% 93% Four Core Asset Index Funds REITs Strategic Asset Allocation Moderate 14% 100% 2% 5% 6% 25% Currently, asset classes in Us Equity( SPY , VTI ) , Foreign Equity( EFA , VEU ) , REITs ( IYR , VNQ , ICF ) and Fixed Income( AGG , BND ) are doing relatively well. These asset classes are available to Ford Motor 401K participants.
To summarize, Ford Motor 401K plan provides above average choices to its plan participants. As one of the major automobile manufacturers, Ford employees can benefit from such a plan to support their retirement needs.
labels:investment,
Symbols:F,SPY,VTI,EFA,VEU,IYR,VNQ,ICF,AGG,BND,CIU,BIV,GWL,PFA,IFGL,RWX,TZG,TZL,TZV,IVV,IYY,IWV,VV,DLN,RSP,SCHX,IOO,VT,IVW,IWZ,JKE,VUG,ELG,QQQQ,RPG,SCHG,IJH,IWR,JKG,VO,MDY,EMM,PJG,DON,EZM,MVV,IFSM,VSS,SCHC,IJR,IWM,JKJ,VB,DSC,PJM,DES,SAA,UWM,SCHA,TIP,ETF,Portfolio,Building,401K,
- Lazy Portfolios -- The Playoffs II
10/19/2010
This is the second article as we attempt to whittle down the lazy portfolios to four finalists for great analysis of what makes for a great portfolio. We are in the bottom half of the alphabetical list and the eight are listed in reducing order asset classes and funds. We have stated that the winners should be those with the most asset classes and highest number of funds.
Portfolio Classes Funds ETF Equivalent Seven-12 7 12 Y SIX SIB SAA 6 6 y Gone Fishin' 5 10 y Swensen 6 4 6 Y Wasik`s Nano 4 5 Y Harry Browne 3 4 Y Schultheis 3 3 Y Lowell 2 8 Y We are using this series of comparisons to validate whether this proves to be true.- Craig L. Israelsen, Ph.D., is an Associate Professor at Brigham Young University. The Seven Equally Weighted, twelve fund portfolio is aimed to protect against losses.
- The MyPlanIQ six asset SIB has index funds for each of the asset classes represented and rebalances monthly – this is primarily a benchmark portfolio
- Alexander Green proposed this The Gone Fishin' Portfolio which was outlined in his book 'The Gone Fishin' Portfolio'
- David Swensen, the Yale Endowment Manager, proposed this one size fit in all model portfolio for individual investors.
- John Wasik has been a professional journalist and author for 30 years specializing in personal finance. John proposed a portfolio which employs a handful of index or ETFs
- Harry Browne is the author of Fail-Safe Investing
- Bill Schulthe is is a former Smith Barney broker and author of "The Coffeehouse Investor."
- Jim Lowell edits MarketWatch's ETF Trader, an investment letter employing a momentum-based exchange-traded-fund strategy for long-term investors.
The returns are now presented in order of highest to lowest of the five year returns. How do the returns compare to what we would have expected?
Portfolio/AR(%) 1 Yr 3 Yr 5 Yr Inception Harry Browne 12.49 7.40 8.99 7.31 Six SIB SAA 12.54 1.61 7.44 8.26 Seven-12 15.55 0.80 6.41 6.16 Swensen Six 15.10 (0.24) 6.21 7.10 Gone Fishin' 12.98 (0.34) 5.64 6.72 Wasik`s Nano 15.34 (1.93) 4.74 4.66 Schultheis 9.23 (2.28) 4.68 4.59 Lowell 12.45 (6.26) 3.55 6.74 - The portfolios roughly follow the asset class/fund class as would be expected
- The Harry Browne portfolio stands out as the clear exception to the rule – it has a signnificant lead over the other portfolios
- The six asset SIB performed well – that was expected. Six asset classes with index funds should perform well
When we look at the drawdown for each of the portfolios, it will reveal which is the most painful to own.Portfolio/DD1 Yr3 Yr5 YrInceptionHarry Browne5%15%15%15%Swensen Six8%39%39%39%Six SIB SAA8%39%39%39%Schultheis9%39%39%39%Seven-128%40%40%40%Gone Fishin'9%42%42%42%Wasik`s Nano9%44%44%44%Lowell16%57%57%57%
Again the Harry Browne portfolio is the clear winner.
We select the top two – which are the Harry Browne and Six asset SIB to move to the final round where they will be put against the best two funds from the top half of the alphabet.
Takeaways- The portfolios followed the expected path against asset classes and funds
- The Harry Browne portfolio was the clear winner and was the exception – we will find out in the final article whether it proves the rule
- With the exception of the Harry Browne portfolio, the drawdown ratios are uncomfortably high
- ETF’s can be used to implement any of these strategies
labels:investment,
Symbols:ACWI,ACWX,ADRE,AGG,BIV,BLV,BND,BSV,BWX,CFT,CIU,CSJ,DBC,DBV,DIA,DVY,EDV,EEM,EFA,EFG,EFV,EMB,ETF,GLD,GOOG,GSG,GXC,HPQ,HYG,ICF,IEF,IEI,IFGL,IGOV,IGR,IJH,IJJ,IJK,IJR,IJS,IJT,IVE,IVV,IVW,IWB,IWC,IWD,IWF,IWM,IWN,Portfolio-Building,with,ETFs,Closed-End,Funds,Commodity,ETFs,Currency,ETFs,Developed,Market,ETFs,
- Lazy Portfolios -- The Playoffs
10/19/2010
We have compared the performance of fifteen buy and hold portfolios from investing luminaries. Each of the portfolios was measured for performance against SIBs and their relative merits examined. We now move into a playoff round where we will compare the portfolios with each other and see if we can find an eventual winner and look at why they won and what we can learn from this.
When we were testing the portfolios against SIBs, we introduced a tactical asset allocation strategy which usually turned out to have the best performance. For this series of peer comparisons, we are only going to use a buy and hold strategy. When we find the eventual winner, we will then perform a final comparison with tactical asset allocation and see what we conclude.
The portfolios have been sorted alphabetically and we are going to start with the top part of the alphabet. The portfolios will be listed by decreasing number of asset classes and decreasing number of funds. We would expect that the portfolio with the greatest number of asset classes to have the highest returns and we will test that to see to what extent it is true.
Table of Lazy Portfolios and their classes and fundsPortfolio Classes Funds ETF Equivalent Fund Advice 5 11 Y Gibson 5 6 y Five SIB SAA 5 5 Y Aronson 4 11 y Armstrong 4 7 y Four SIB SAA 4 4 Y Burns/Tobias 3 3 Y - Paul Merriman's FundAdvice.com website has indexed porfolios for several fund companies. The basic strategy is the same as with all the other Lazy Portfolios, here with 11 no-load index funds
- Gibson's 5 Equal Asset Allocation Strategy comes from Roger Gibson’s widely read "Asset Allocation: Balancing Financial Risks.”
- The MyPlanIQ five asset SIB has index funds for each of the asset classes represented and rebalances monthly – this is primarily a benchmark portfolio
- Ted Aronson and his AJO Partners manage about $25 billion of institutional assets. Aronson puts his family's taxable money in this well-diversified portfolio of no-load index funds
- Frank Armstrong, author of The Informed Investor, proposed his portfolio for an MSN Money article
- The MyPlanIQ four asset SIB has index funds for each of the asset classes represented and rebalances monthly – this is primarily a benchmark portfolio
- Scott Burns has covered personal finance and investments for nearly 40 years and ranks as one of the most widely read personal finance writers in the country/ Andrew Tobias, a Harvard alum and writer of 12 books including The Only Investment Guide You'll Ever Need.
Table of Lazy Portfolios and their Annual ReturnsPortfolio/AR(%) 1 Yr 3 Yr 5 Yr Inception Five SIB SAA 14.27 1.73 7.67 8.38 Four SIB SAA 10.76 0.17 7.11 7.40 Fund Advice 10.85 0.24 6.06 6.75 Armstrong 11.69 (1.76) 5.15 5.55 Burns/Tobias 0.45 (2.32) 4.54 4.48 Aronson 8.46 (1.10) 3.48 3.59 Gibson 8.63 (4.72) 0.08 3.43 The returns are now presented in order of highest to lowest of the five year returns. How do the returns compare to what we would have expected.- There was a wider spread than expected on the four and five asset class portfolios and the Burns/Tobias three asset class, three fund portfolio performed better than expected
- A five asset class portfolio came out on top – that was expected. The fact that an index based portfolio won out it also not surprising as index funds often outperform funds with active management
- The fact that a four asset portfolio beat a five asset portfolio demonstrates that picking the right funds in an asset class is important and that index funds deliver good results
- For a very simple three asset portfolio, the Burns/Tobias performance came higher in the league table
- The most surprising result is that the Gibson portfolio performed so poorly. When breaking down the long term results of this portfolio, the selection of asset classes has given the portfolio a modest return with a low drawdown index. In the significant market downturn over the past few years, it suffered (as did most buy and hold strategies) badly and has returned to its modest gains whereas other portfolios have had a higher drawdown ratio but a faster recovery
Table of Lazy Portfolios and their Draw Down RatiosPortfolio/DD 1 Yr 3 Yr 5 Yr Inception Aronson 6% 30% 30% 30% Fund Advice 9% 38% 38% 38% Gibson 7% 38% 38% 38% Four SIB SAA 9% 40% 40% 40% Five SIB SAA 8% 41% 41% 41% Scott Burns 9% 41% 41% 41% Armstrong 11% 44% 44% 44% We list the draw down ratios for each of the portfolios and it’s clear that with the recent turbulence, all of them are higher than would be desired.We will select the top two – which are the four and five asset SIBs to move to the final round where they will be put against the best two funds from the bottom half of the alphabet.
Takeaways- Asset classes and number of funds in each class are an indicator of better returns but it’s not the only thing
- Index funds continue to show good results against managed funds
- or those investing in the very long term, looking at the draw down index is important because it will help you live with the fund selection you have made
- ETF’s can be used to implement any of these strategies
labels:investment,
Symbols:ACWI,ACWX,ADRE,AGG,BIV,BLV,BND,BSV,BWX,CFT,CIU,CSJ,DBC,DBV,DIA,DVY,EDV,EEM,EFA,EFG,EFV,EMB,ETF,GLD,GOOG,GSG,GXC,HPQ,HYG,ICF,IEF,IEI,IFGL,IGOV,IGR,IJH,IJJ,IJK,IJR,IJS,IJT,IVE,IVV,IVW,IWB,IWC,IWD,IWF,IWM,IWN,Portfolio-Building,with,ETFs,Closed-End,Funds,Commodity,ETFs,Currency,ETFs,Developed,Market,ETFs,
- Case Study: Hewlett Packard's 401K Plan
10/09/2010
Retirement investing is an integral part of American personal finance. With $8.9 trillion parked in over 800 thousand retirement plans [401K], millions of Americans will increasingly rely on their 401K accounts to fund their future retirement needs. 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 Hewlett Packard's 401K plan can achieve reasonable investment results using asset allocation strategies. We will also discuss how those portfolios are positioned in today’s market environment.
Hewlett Packard (HP) (NYSE: HPQ) is one of the largest IT companies. Founded by Bill Hewlett and Dave Packard in Palo Alto, California, HP was the earliest technology company that eventually led to the formation of Silicon Valley. Today Hewlett-Packard has over 300 thousands employees world wide.
HP is known to be employee friendly. It has been named several times as one of the best companies to work for. Its 401k plan provides a well diversified array of high quality funds.
Hewlett Packard's 401K plan consists of 29 funds. These funds enable participants to gain exposure to 5 major assets: US Equity, Foreign Equity, Emerging Market Equity, REITs and Fixed Income. The the list of minor asset classes covered:
Large Blend: SPY, VTI
Large Value: IWD, VTV
Large Growth: IWF, VUG
Mid-Cap Blend: MDY, IWR
Foreign Large Blend: EFA
Foreign Large Growth: EFG
Foreign Large Value: EFV
Foreign Small/Mid Growth: SCZ
Diversified Emerging Mkts: EEM, VWO
Real Estate: IYR, ICF, VNQ
World Bond: BWX
Emerging Markets Bond: PCY, EMB
Inflation-Protected Bond: TIP
Intermediate-Term Bond: AGG, BND
Long Government: IEF, TLT
UltraShort Bond: BSV
Muni National Long: MUB
High Yield Bond: HYG, JNKAs of 9/13/2010, 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 (score: 89%)
Fund Quality – Rated as above average (score: 76%)
Portfolio Building -- Rated as above average (score: 72%)
Overall Rating: above average (score: 78%)
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:
US Equity (SPY or VTI)
Foreign Equity (EFA or VEU)
Emerging Market Equity (EEM or VWO)
REITs (IYR or VNQ or ICF)
Fixed Income (AGG or BND)
Performance chart (as of 9/13/2010)Performance table (as of 9/13/2010)
1 Yr AR (%) 1 Yr Sharpe (%) 3 Yr AR (%) 3 Yr Sharpe(%) 5 Yr AR (%) 5 YR Sharpe (%) Plan SAA 15.95 145.83 2.34 10.27 5.76 29.43 5 SIB SAA 13.09 96.52 2.49 8.77 6.74 29.02 Plan TAA 15.53 103.28 9.35 73.75 11.43 88.56 5 SIB TAA 9.99 68.82 8.11 66.77 11.62 92.08 Currently, asset classes in emerging market stocks (EEM, VWO), REITs (Real Estate Investment Trusts) (VNQ, IYR, ICF) and fixed income (AGG, BND) are doing relatively well. These asset classes are available to HP 401k participants.
To summarize, Hewlett Packard 401K 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 emerging market stocks, REITs and fixed income funds.
labels:investment,
Symbols:BND,BSV,BWX,EFA,EFG,EFV,EMB,HPQ,HYG,ICF,IEF,IWD,IWF,IWR,IYR,JNK,MDY,MUB,PCY,PHB,SCZ,SPY,TLT,VEU,VNQ,VTI,VTV,VUG,Fixed,Income,Asset,Allocation,Bonds,Dollar/Currencies,Earnings,
- Google’s 401K Plan: Another Good Employee Benefit
09/26/2010
- Getting Most out of Your Retirement Plan: A Case Study on Hewlett Packard 401K Plan
09/16/2010
- John Wasik’s Nano Portfolio Performance Scrutinized
09/14/2010
- Practical and Effective ETF Based 401K Plan
07/29/2010
- Schwab ETFs Review
07/27/2010
- Investing with Styles Can Pay off
07/09/2010
- Understanding and Building Your ETF Portfolio
06/27/2010
- The Mystery Advisers
06/09/2010
- David Swensen's Six Asset Investment Plan
06/09/2010
- Selecting Candidate ETFs for Effective Portfolio Building
06/03/2010
- Apartment Investment and Management Company 401(k) Retirement Plan Report On 12/03/2010
12/03/2010
This report reviews Apartment Investment and Management Company 401(k) Retirement 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 Apartment Investment and Management Company 401(k) Retirement Plan can achieve reasonable investment results using asset allocation strategies.
Plan Review and Rating
Apartment Investment and Management Company 401(k) Retirement Plan's 401K plan consists of 22 funds. These funds enable participants to gain exposure to 4 major assets: US Equity, Foreign Equity, REITs, Fixed Income. The list of minor asset classes covered:
Foreign Large Growth: EFG
Inflation-protected Bond: TIP
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 Blend: IJH, IWR, JKG, VO, MDY, EMM, PJG, DON, EZM, MVV
Real Estate: IYR, ICF, VNQ
Retirement Income:
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
Target Date 2000-2010: TZD
Target Date 2016-2020: TZG
Target Date 2026-2030: TZL
Target Date 2036-2040: TZV
Target Date 2050+:
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 (76%)
Fund Quality -- Rated as (36%)
Portfolio Building -- Rated as (87%)
Overall Rating: (68%)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 Apartment Investment and Management Company 401(k) Retirement 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 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)
REITs: (IYR or VNQ or ICF)
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 Apartment Investment and Management Company 401(k) Retirement Plan Tactical Asset Allocation Moderate 15% 97% 10% 84% 12% 98% Apartment Investment and Management Company 401(k) Retirement Plan Strategic Asset Allocation Moderate 13% 120% 4% 19% 6% 30% Four Core Asset Index Funds REITs Tactical Asset Allocation Moderate 8% 58% 6% 54% 9% 80% Four Core Asset Index Funds REITs Strategic Asset Allocation Moderate 11% 87% 2% 6% 5% 20% Currently, asset classes in US Equity (SPY,VTI), Foreign Equity (EFA,VEU) and REITs (IYR,VNQ,ICF) are doing relatively well. These asset classes are available to Apartment Investment and Management Company 401(k) Retirement Plan participants.
To summarize, Apartment Investment and Management Company 401(k) Retirement Plan plan participants can achieve reasonable investment returns by adopting asset allocation strategies that are tailored to their risk profiles.
Symbols: AIV , SPY , VTI , EFA , VEU , IYR , VNQ , ICF , AGG , BND , CIU , BIV , EFG , IVE , IWW , JKF , VTV , ELV , PWV , RPV , SCHV , TZD , TZG , TZL , TZV , IVV , IYY , IWV , VV , DLN , RSP , SCHX , IVW , IWZ , JKE , VUG , ELG , QQQQ , RPG , SCHG , IJH , IWR , JKG , VO , MDY , EMM , PJG , DON , EZM , MVV , 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 , TIP
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