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Articles on DND

  • Schwab Mutual Funds Beat out ETFs

    04/06/2011

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    Retirement investing is a "hair on fire" problem -- especially for baby boomers for whom retirement is a near and present danger. There is a real lack of consistent, unbiased information that a retiree can use to help improve risk adjusted returns. Blogger Jenny Hollingworth has been teaching herself about investing and has come to the point where she is going to choose a plan and make her first investments.

    In her recent post New Steps she sorted through a list of alternatives and chose the Schwab OneSource Select List Funds.

    The reason for her choice was:

    • The highest possible rating for each plan is 5 stars.  So I bypassed anything that didn’t have 5 (because really, why go for less?)
    • Picked out a name I knew: Schwab.  Specifically: Schwab OneSource Select List Funds. I selected it.  
    • This is an application to Charles Schwab's OneSource Select List mutual funds. These funds are  No Load and No Transaction Fee (NTF) mutual funds. Based on Schwab's policy, the no load NTF funds have 90 days redemption fee period. As of 1/1/2010, there are total  140 OneSource Select List funds available from Schwab.

    We are going to review the Schwab OneSource Select List Funds  to see whether she chose a good plan. The plan consists of 137 funds. These funds enable participants to gain exposure to 6 major assets: US Equity, Commodity, Foreign Equity, REITs, Emerging Market Equity, Fixed Income.

     

    Asset Class Ticker Name
    LARGE VALUE AAGPX American Beacon Lg Cap Value Inv
    Foreign Large Value AAIPX American Beacon Intl Equity Inv
    Retirement Income AANPX American Beacon Retire Inc & Apprec Inv
    High Yield Muni ABHYX American Century High-Yield Muni Inv
    Inflation-Protected Bond ACITX American Century Infl-Adj Bond Inv
    Muni National Long ACLVX American Century Long-Term Tax-Free Inv
    MID-CAP VALUE ACMVX American Century Mid Cap Value Inv
    Conservative Allocation AONIX American Century One Choice: Vry Cnsrv I
    MID-CAP VALUE ARDEX Aston/River Road Dividend All Cap Val N
    Target Date 2011-2015 ARFIX American Century LIVESTRONG 2015 Inv
    Retirement Income ARTOX American Century LIVESTRONG Inc Inv
    Target Date 2021-2025 ARWIX American Century LIVESTRONG 2025 Inv
    Target Date 2031-2035 ARYIX American Century LIVESTRONG 2035 Inv
    SMALL VALUE AVPAX American Beacon Small Cp Val Inv
    EUROPE STOCK AXEAX Threadneedle European Equity A
    Muni National Interm BMBSX Baird Intermediate Muni Bd Inv
    Technology BOGSX Black Oak Emerging Technology
    Small Growth BSCFX Baron Small Cap
    Moderate Allocation BUFBX Buffalo Balanced
    Technology BUFTX Buffalo Science & Technology
    DIVERSIFIED EMERGING MKTS CEMVX Causeway Emerging Markets Investor
    MID-CAP BLEND CHTTX Aston/Optimum Mid Cap N
    Intermediate Government CPTNX American Century Government Bond Inv
    Small Growth CSMVX Century Small Cap Select Inv
    REAL ESTATE CSRSX Cohen & Steers Realty Shares
    Long-Short CVSIX Calamos Market Neutral Income A
    SMALL BLEND DISSX Dreyfus Small Cap Stock Index
    Bank Loan EABLX Eaton Vance Floating Rate Adv
    Conservative Allocation EXDAX Manning & Napier Pro-Blend Cnsrv Term S
    Foreign Large Blend EXWAX Manning & Napier World Opportunities A
    Moderate Allocation FAGSX First American Strat Growth Allc A
    Financial FBRSX FBR Small Cap Financial
    ULTRASHORT BOND FEUGX Federated Adjustable Rate Secs Instl
    Intermediate Government FICMX Federated Income Instl
    Muni National Interm FIMTX Federated Intermediate Municipal Instl
    LARGE BLEND FMIHX FMI Large Cap
    Long-Short FMLSX Wasatch-1st Source Long/Short
    SHORT GOVERNMENT FSGVX Federated US Govt 1-3 Yr Instl
    Muni Short FSHIX Federated Shrt-Interm Dur Muni Instl
    Short-Term Bond FSTIX Federated Short-Term Income Instl
    Intermediate-Term Bond FTRFX Federated Total Return Bond Instl Svc
    SMALL BLEND GABSX Gabelli Small Cap Growth AAA
    Communications GABTX GAMCO Global Telecommunications AAA
    LARGE GROWTH HCAIX Harbor Capital Appreciation Inv
    Foreign Large Blend HIINX Harbor International Inv
    WORLD STOCK HLMGX Harding Loevner Global Equity Advisor
    Foreign Large Growth HLMNX Harding Loevner International Equity Inv
    Equity Energy ICENX ICON Energy S
    China Region ICHKX Guinness Atkinson China & Hong Kong
    LARGE VALUE INDZX RiverSource Diversified Equity Inc A
    Moderate Allocation JABAX Janus Balanced T
    Health JAGLX Janus Global Life Sciences T
    LARGE GROWTH JAMRX Janus Research T
    Small Growth JATTX Janus Triton T
    Foreign Large Blend JETAX Artio International Equity II A
    Target Date 2021-2025 JNSAX JPMorgan SmartRetirement 2025 A
    LARGE BLEND JRMSX INTECH Risk-Managed Core T
    Target Date 2011-2015 JSFAX JPMorgan SmartRetirement 2015 A
    Target Date 2026-2030 JSMAX JPMorgan SmartRetirement 2030 A
    Target Date 2016-2020 JTTAX JPMorgan SmartRetirement 2020 A
    LARGE BLEND JUEAX JPMorgan US Equity A
    LARGE VALUE JVLAX JHancock3 Disciplined Value A
    Small Growth KGSCX Kalmar Growth-with-Value Small Cap
    LARGE GROWTH LGILX Laudus Growth Investors US Large Cap Gr
    WORLD BOND LIFNX Laudus Mondrian Intl Fixed Income
    Foreign Large Blend LISOX Lazard Intl Strategic Equity Open
    Multisector Bond LSBRX Loomis Sayles Bond Retail
    DIVERSIFIED PACIFIC/ASIA MAPIX Matthews Asia Pacific Equity Income
    PACIFIC/ASIA EX-JAPAN STK MAPTX Matthews Pacific Tiger Investor
    China Region MCHFX Matthews China Investor
    Muni National Interm MITFX Marshall Intermediate Tax-Free Inv
    JAPAN STOCK MJFOX Matthews Japan Investor
    Foreign Large Blend MKIEX McKee International Equity Instl
    DIVERSIFIED PACIFIC/ASIA MPACX Matthews Asia Pacific Investor
    High Yield Bond MWHYX Metropolitan West High Yield Bond M
    Short-Term Bond MWLDX Metropolitan West Low Duration Bond M
    Intermediate-Term Bond MWTRX Metropolitan West Total Return Bond M
    MID-CAP BLEND NMMCX Northern Multi-Manager Mid Cap
    SMALL VALUE NOSGX Northern Small Cap Value
    Muni National Long NOTEX Northern Tax-Exempt
    Small Growth NSPAX ING Small Cap Opportunities A
    Foreign Small/Mid Value OAKEX Oakmark International Small Cap I
    WORLD STOCK OAKGX Oakmark Global I
    COMMODITIES BROAD BASKET PCRDX PIMCO Commodity Real Ret Strat D
    Emerging Markets Bond PEMDX PIMCO Emerging Markets Bond D
    LARGE BLEND PEOPX Dreyfus S&P 500 Index
    WORLD BOND PFODX PIMCO Foreign Bond (USD-Hedged) D
    Intermediate-Term Bond PGBOX JPMorgan Core Bond A
    Multisector Bond PONDX PIMCO Income D
    LARGE BLEND PRBLX Parnassus Equity Income - Inv
    Inflation-Protected Bond PRRDX PIMCO Real Return D
    SMALL VALUE PSOAX JPMorgan Small Cap Value A
    Intermediate-Term Bond PTTDX PIMCO Total Return D
    SMALL BLEND RYTFX Royce Total Return Svc
    Intermediate-Term Bond SAMIX RidgeWorth Intermediate Bond I
    Foreign Large Blend SICNX Schwab International Core Equity Inst
    Foreign Large Blend SIEIX RidgeWorth Intl Equity Index I
    ULTRASHORT BOND SIGVX RidgeWorth US Gov Sec Ultra-Short Bd I
    Target Date 2031-2035 SRJAX JPMorgan SmartRetirement 2035 A
    DIVERSIFIED EMERGING MKTS SSEMX SSgA Emerging Markets Instl
    High Yield Bond STHTX RidgeWorth High Income I
    Muni National Interm STTBX RidgeWorth Investment Grade T/E Bond I
    LARGE BLEND SWANX Schwab Core Equity Inv
    Global Real Estate SWASX Schwab Global Real Estate Select
    Target Date 2026-2030 SWDRX Schwab Target 2030
    LARGE VALUE SWDSX Schwab Dividend Equity
    Financial SWFFX Schwab Financial Services
    Target Date 2011-2015 SWGRX Schwab Target 2015
    Intermediate Government SWGSX Schwab GNMA
    Long-Short SWHEX Schwab Hedged Equity
    Health SWHFX Schwab Health Care
    Target Date 2021-2025 SWHRX Schwab Target 2025
    Intermediate-Term Bond SWIIX Schwab Premier Income Instl
    Foreign Large Blend SWISX Schwab International Index
    Retirement Income SWKRX Schwab Monthly Income Enh Payout
    Retirement Income SWLRX Schwab Monthly Income Max Payout
    LARGE GROWTH SWLSX Schwab Large-Cap Growth
    Foreign Large Growth SWMIX Laudus International MarketMasters Sel
    Small Growth SWMSX Laudus Small-Cap MarketMasters Select
    Muni National Interm SWNTX Schwab Tax-Free Bond
    Moderate Allocation SWOBX Schwab Balanced Inv
    LARGE BLEND SWPPX Schwab S&P 500 Index
    SMALL BLEND SWSSX Schwab Small Cap Index
    LARGE GROWTH TGCNX TCW Select Equities N
    Mid-Cap Growth TGDNX TCW Growth Equities N
    EQUITY PRECIOUS METALS TGLDX Tocqueville Gold
    LARGE BLEND TICRX TIAA-CREF Social Choice Eq Retail
    LARGE GROWTH TIRTX TIAA-CREF Large-Cap Growth Retail
    LARGE GROWTH TWCGX American Century Growth Inv
    Muni National Interm TWTIX American Century Interm-T Tx-Fr Bd Inv
    SHORT GOVERNMENT TWUSX American Century Short-Term Govt Inv
    LARGE VALUE TWVLX American Century Value Inv
    Foreign Large Value TWWDX Thomas White International
    Foreign Large Growth UMBWX Scout International
    SMALL VALUE VSFAX Federated Clover Small Value A
    Mid-Cap Growth WTMGX Westcore MIDCO Growth
    LARGE VALUE YAFFX Yacktman Focused

     

    Asset Class Number of funds
    Balanced Fund 21
    REITs 2
    Fixed Income 34
    Commodity 1
    Sector Fund 9
    Foreign Equity 18
    Emerging Market Equity 7
    US Equity 41
    Other 4
    Total 137


    As of Apr 5, 2011, 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 (98%)
    Fund Quality -- Rated as average (54%)
    Portfolio Building -- Rated as great (86%)
    Overall Rating: above average (80%)

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

    US Equity: SPY or VTI
    Commodity: DBC
    Foreign Equity: EFA or VEU
    REITs: IYR or VNQ or ICF
    Emerging Market Equity: EEM or VWO
    Fixed Income: AGG or BND
    Performance chart (as of Apr 5, 2011)

    Performance table (as of Apr 5, 2011)

    With six asset classes and a wide number of funds, the returns beat the six asset class benchmark. With high scores in all categories, this plan delivers portfolios that have produced strong historical returns.

    Symbols: SPY, VTI, EFA, VEU, EEM, VWO, IYR, VNQ, ICF, AGG, BND, DBC, HYG, JNK, PHB, AOM, AOK, CIU, BIV, ITM, MUB, TFI, PZA, MLN, IYH, IXJ, VHT, XBI, PBE, DBR, RYH, EFG, IXP, PTE, DGG, LTL, MTK, PTF, DBT, RYT, ROM, GWL, PFA, IVE, IWW, JKF, VTV, ELV, PWV, RPV, SCHV, SCZ, EFV, PID, DWM, IYF, VFH, IPF, PFI, DRF, RYF, IFGL, RWX, TZE, TZG, TZI, TZO, TZL, IGOV, BWX, WIP, IVV, IYY, IWV, VV, DLN, RSP, SCHX, IOO, VT, SHY, SHV, VGSH, PLK, USY, IEV, VGK, PEF, DEB, IVW, IWZ, JKE, VUG, ELG, QQQQ, RPG, SCHG, IJJ, IWS, JKI, VOE, EMV, PWP, RFV, UVU, 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, GMM, PXH, DEM, SCHE, GBF, LAG, PCY, CSJ, BSV, VCSH, ITE, IXC, IPW, DBE, RYE, DKA, IEI, VGIT, IJK, IWP, VOT, EMG, PWJ, RFG, UKW, IJT, IWO, JKK, VBK, DSG, PWT, RZG, UKK, TIP, DBP, EPP, VPL, GMF, PAF, AAXJ, DND, EWJ, JPP, PJO, DXJ, GSG, BIL

    Disclosure:

    MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.

    Originally from the UK, Jenny Hollingworth lives with her husband and two sons in Northern California. She is a wife, mother, writer, theatre director, coffee drinker, avid reader, keen walker, movie watcher, Jane Austen lover and observer of life, in no particular order. MyPlanIQ has no formal relationship with Jenny Hollingworth.

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  • TD Ameritrade Commission Free ETFs: Comprehensive Portfolio Building Blocks

    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)

    Portfolio Name1Yr AR1Yr Sharpe3Yr AR3Yr Sharpe5Yr AR5Yr Sharpe
    TD Ameritrade Commission Free ETFs Tactical Asset Allocation Moderate 13% 87% 13% 86% 20% 128%
    TD Ameritrade Commission Free ETFs Strategic Asset Allocation Moderate 10% 85% -1% -6% 9% 47%
    Six Core Asset ETFs Tactical Asset Allocation Moderate 10% 65% 9% 66% 17% 114%
    Six Core Asset ETFs Strategic Asset Allocation Moderate 11% 84% 2% 9% 9% 42%

     

    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,

     

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  • Top Tier ETF Providers Playoffs II

    10/19/2010

    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 
    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)

    Portfolio Name1Yr AR1Yr Sharpe3Yr AR3Yr Sharpe5Yr AR5Yr 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.

     

    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,


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  • Top Tier ETF Provider Playoffs

    10/19/2010

    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. In addition, while many of these ETF’s have a 30 day minimum hold, this is ideal for long term investing when making changes more often than that can be counter productive.
     
    Four companies offer commission free ETF’s and we are going to compare the offerings in detail to determine which is likely to offer the best value to the investor. 

    In this article we are going to compare Schwab and TD Ameritrade.

    Schwab (Ticker SCHW) is a relative late comer to the ETF party. They offer the fewest ETF’s and the ETF’s have the shortest history. They only provide their own ETF's commission free. However, Schwab has a huge network and powerful brand so we expect Schwab to be a significant player in the market.
     

    Schwab ETF
    NEW Bond ETFs
    Schwab U.S. TIPS ETF™
    Schwab Short-Term U.S. Treasury ETF™
    Schwab Intermediate-Term U.S. Treasury ETF™
    Domestic Equity ETFs
    Schwab U.S. Broad Market ETF™
    Schwab U.S. Large-Cap ETF™
    Schwab U.S. Large-Cap Growth ETF™
    Schwab U.S. Large-Cap Value ETF™
    Schwab U.S. Small-Cap ETF™
    International Equity ETFs
    Schwab International Equity ETF™
    Schwab International Small-Cap Equity ETF™ 
    Schwab Emerging Markets Equity ETF™ 

     
    Notable properties about the Schwab offering
    • 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
    As most of the funds are very new, it’s impossible to do real back testing with the funds. So we have selected a commission efficient portfolio that includes:

    Asset ClassTickerName
    LARGE VALUE SCHV Schwab U.S. Large-Cap Value ETF
    LARGE BLEND SCHX Schwab U.S. Large-Cap ETF
    LARGE BLEND SCHB Schwab U.S. Broad Market ETF
    LARGE GROWTH SCHG Schwab U.S. Large-Cap Growth ETF
    LARGE GROWTH IWF iShares Russell 1000 Growth Index
    SMALL VALUE IJS iShares S&P SmallCap 600 Value Index
    SMALL BLEND SCHA Schwab U.S. Small-Cap ETF
    Small Growth IJT iShares S&P SmallCap 600 Growth
    Foreign Large Blend SCHF Schwab International Equity ETF
    FOREIGN SMALL/MID GROWTH SCHC Schwab International Small-Cap Eq ETF
    DIVERSIFIED EMERGING MKTS SCHE Schwab Emerging Markets Equity ETF
    Inflation-Protected Bond TIP iShares Barclays TIPS Bond
    Intermediate Government IEI iShares Barclays 3-7 Year Treasury Bond
    SHORT GOVERNMENT SHY iShares Barclays 1-3 Year Treasury Bond
    Inflation-Protected Bond SCHP Schwab U.S. TIPS ETF
    SHORT GOVERNMENT SCHO Schwab Short-Term U.S. Treasury ETF
    Intermediate Government SCHR Schwab Intermediate-Term U.S. Trsy ETF
    LARGE VALUE VTV Vanguard Value Index
    LARGE BLEND VTI Vanguard Total Stock Market ETF
    LARGE VALUE VTV Vanguard Value ETF
    DIVERSIFIED EMERGING MKTS VWO Vanguard Emerging Markets Stock ETF
    Foreign Small/Mid Value SCZ iShares MSCI EAFE Small Cap Index
    Foreign Large Blend EFA iShares MSCI EAFE Index


    As of Oct 15, 2010, the Schwab ETF investment choice is rated asaverage 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 below average (19%) 
    Fund Quality -- Rated as average (59%) 
    Portfolio Building -- Rated as average (41%) 
    Overall Rating: average (40%)

    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:
    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)

    Portfolio Name
    1Yr AR
    1Yr Sharpe
    3Yr AR
    3Yr Sharpe
    5Yr AR
    5Yr Sharpe
    2%
    17%
    6%
    44%
    14%
    88%
    1%
    10%
    5%
    38%
    12%
    88%
    10%
    71%
    1%
    2%
    9%
    40%
    10%
    76%
    1%
    4%
    8%
    37%


    The Schwab Funds perform adequately against the SIB’s.
     
    TD Ameritrade (Ticker: AMTD) are also newcomers to the ETF space offering 100+ commission free ETFs. The main restriction is that customers have to hold these ETFs for more than 30 days to make such trades ecommission free.

    This is an almost ideal platform for retirement investing with a 30 day redemption period. With a web based application to monitor all of the funds in the plan, it should be possible to put together a very solid portfolio and deliver excellent results.

    These funds provide exposure to 6 major assets: Emerging Market Equity , Foreign Equity , Fixed Income , US Equity , Commodity , Real estate. 

    The list of minor asset classes covered:
    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 (28%) 
    Portfolio Building -- Rated as great (90%) 
    Overall Rating: above average (73%)

    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)

    Portfolio Name
    1Yr AR
    1Yr Sharpe
    3Yr AR
    3Yr Sharpe
    5Yr AR
    5Yr Sharpe
    13%
    87%
    13%
    86%
    20%
    128%
    10%
    83%
    -1%
    -6%
    9%
    46%
    10%
    65%
    9%
    66%
    17%
    114%
    11%
    84%
    2%
    9%
    9%
    42%


    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 TD Ameritrade Commission Free ETFs participants.

     
    Portfolio Performance Comparison

    Portfolio Name
    1Yr AR
    1Yr Sharpe
    3Yr AR
    3Yr Sharpe
    5Yr AR
    5Yr Sharpe
    13%
    87%
    13%
    86%
    20%
    128%
    1%
    10%
    5%
    38%
    12%
    88%
    10%
    83%
    -1%
    -6%
    9%
    46%
    10%
    71%
    1%
    2%
    9%
    40%

     
     
    In this round, TD Ameritrade is the clear winner with tactical asset allocation while the Schwab SAA pretty much matches its counterpart.

    TD Ameritrade's two key advantages are:
    • 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
     TD Ameritrade is the clear winner and moves on to the final round.

     

    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,

     

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  • Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Report On 12/03/2010

    12/03/2010

    This report reviews Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account 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 Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan can achieve reasonable investment results using asset allocation strategies.

    Plan Review and Rating

    --

    Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan's 401K plan consists of 55 funds. These funds enable participants to gain exposure to 5 major assets: US Equity, Foreign Equity, Commodity, Emerging Market Equity, Fixed Income. The list of minor asset classes covered:

    Commodities Broad Basket: GSG, DBC
    Conservative Allocation: AOK
    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
    Foreign Large Blend: EFA, VEU, GWL, PFA
    Foreign Small/mid Growth: IFSM, VSS, SCHC
    Health: IYH, IXJ, VHT, XBI, PBE, DBR, RYH
    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
    Latin America Stock: ILF, GML
    Long Government: TLT, TLH, IEF, EDV, VGLT, TLO, PLW
    Mid-cap Value: IJJ, IWS, JKI, VOE, EMV, PWP, RFV, UVU
    Multisector Bond: AGG, GBF, BND, LAG
    Natural Resources: IYM, IGE, VAW, XLB, XME, PYZ, DBN, RTM, UYM
    Pacific/asia Ex-japan Stk: EPP, AAXJ, GMF, PAF, DND
    Short Government: SHY, SHV, VGSH, PLK, USY
    Short-term Bond: CSJ, BSV, VCSH
    Small Growth: IJT, IWO, JKK, VBK, DSG, PWT, RZG, UKK
    Technology: MTK, PTF, DBT, RYT, ROM

    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 (91%)
    Fund Quality -- Rated as (48%)
    Portfolio Building -- Rated as (84%)
    Overall Rating: (75%)

    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 Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account 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)
    Emerging Market Equity: (EEM or VWO)
    Fixed Income: (AGG or BND)

    Performance chart (as of Dec 2, 2010)

    Performance table (as of Dec 2, 2010)

    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 Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan participants.

    To summarize, Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan plan participants can achieve reasonable investment returns by adopting asset allocation strategies that are tailored to their risk profiles.

    Symbols: ATI , SPY , VTI , EFA , VEU , EEM , VWO , AGG , BND , DBC , AOK , CIU , BIV , IYH , IXJ , VHT , XBI , PBE , DBR , RYH , IYM , IGE , VAW , XLB , XME , PYZ , DBN , RTM , UYM , MTK , PTF , DBT , RYT , ROM , GWL , PFA , IVE , IWW , JKF , VTV , ELV , PWV , RPV , SCHV , IVV , IYY , IWV , VV , DLN , RSP , SCHX , SHY , SHV , VGSH , PLK , USY , TLT , TLH , IEF , EDV , VGLT , TLO , PLW , IEV , VGK , PEF , DEB , IVW , IWZ , JKE , VUG , ELG , QQQQ , RPG , SCHG , IJJ , IWS , JKI , VOE , EMV , PWP , RFV , UVU , IFSM , VSS , SCHC , GMM , PXH , DEM , SCHE , GBF , LAG , CSJ , BSV , VCSH , ITE , IXC , IPW , DBE , RYE , DKA , ILF , GML , IJT , IWO , JKK , VBK , DSG , PWT , RZG , UKK , TIP , EPP , VPL , GMF , PAF , AAXJ , DND , GSG

  • TD Ameritrade Commission Free ETFs Report On 12/07/2010

    12/07/2010

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