 |
Vanguard ETF: |  |
7.4%* |
|
Diversified Core: | |
8.1%* |
|
Six Core Asset ETFs: | |
7.3%* |
Articles on EFG
- Foreign Large Cap Equities Deliver Strong Returns Among Dividend Stock ETFs
05/04/2011
Foreign Large Cap Equity ETFs allow investors to diversify their portfolios by gaining exposure large stocks in developed economies across the globe. These ETFs track equities from nations like Japan, the UK, and Germany, among many others. These ETFs invest primarily in stocks with market caps in the top 70% of their respective markets.
Among Dividend Stock ETFs (see table), those that track Foreign Large Cap Equities performed very well in the past week, continuing their string performance over the past 52 weeks.. The iShares Dow Jones International Select Dividend ETF (IDV) returned 2.81% in the past week and over 28% in the past 52 weeks. Also performing well among Dividend Stock ETFs was the iShares MSCI EAFE Index ETF (EFA), which gained 2.69% in the last week and almost 18% during the past year.
Top Dividend Stock ETF Trends
4/29/2011
ETF Name Symbol 1 Week 4 Weeks SPDR DJ Wilshire Intl Real Estate RWX 2.98% 5.22% iShares Dow Jones Intl Select Div Idx IDV 2.81% 6.02% iShares MSCI EAFE Index EFA 2.69% 4.90% iShares Dow Jones US Real Estate IYR 2.62% 4.78% First Trust Value Line Dividend Index FVD 1.93% 3.15% SPDR S&P 500 SPY 1.93% 2.18% iShares Dow Jones Select Dividend Index DVY 1.89% 2.32% Vanguard High Dividend Yield Indx VYM 1.84% 3.27% PowerShares Intl Dividend Achievers PID 1.81% 4.28% PowerShares HighYield Dividend Achievers PEY 1.73% 1.78% The growth of these ETFs has followed an upward trend in the overall equity market in recent periods. As a higher percentage of the world's equity market capitalization continues to shift away from the United States, Foreign Large Cap Equities will continue to bring strong returns to investors.
Foreign Large Cap Equities
04/29/2011Description Symbol 1 Yr 3 Yr 5 Yr Avg. Volume(K) 1 Yr Sharpe iShares MSCI EAFE Index EFA 16.26% -3.93% 0.58% 17,665 68.32% Vanguard MSCI EAFE ETF VEA 21.49% -0.87% NA 2,135 88.16% Schwab International Equity SCHF 19.65% NA NA 180 86.62% iShares Dow Jones Intl Select IDV 26.81% 1.73% NA 156 107.04% iShares MSCI EAFE Value Index EFV 14.36% -4.8% -1.08% 133 55.66% PowerShares Intl Dividend Achievers PID 20.98% -1.56% 2.87% 121 112.83% iShares MSCI EAFE Growth Index EFG 19.53% -2.71% 1.55% 84 86.67% PowerShares DWA Dev Mkts Techn PIZ 22.65% -0.49% NA 115 93.38% In addition to the ETFs mentioned above, others in the Foreign Large Cap sector have shown strong growth in recent periods. The PowerShares DWA Developed Markets Technical ETF has returned 22.65% in the past year and the Vanguard MSCI EAFE ETF (VEA) gained 21.49% during the same period. These strong gains have helped to offset the large valuation declines experience during the recent financial crisis.
While high equity valuations may trigger a market retraction in coming periods, Foreign Large Cap Equity ETFs should remain a substantial part of any well-diversified portfolio.
Symbols: EFA, VEA, SCHF, IDV, EFV, PID, EFG, PIZ, RWX, IDV, EFA, IYR, FVD, SPY, DVY, VYM, PEY
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.
- 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)
Portfolio Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe Schwab OneSource Select List Funds Tactical Asset Allocation Moderate 13% 106% 10% 91% 13% 110% Schwab OneSource Select List Funds Strategic Asset Allocation Moderate 12% 152% 4% 32% 7% 52% Six Core Asset ETF Benchmark Tactical Asset Allocation Moderate 10% 81% 9% 82% 13% 89% Six Core Asset ETF Benchmark Strategic Asset Allocation Moderate 14% 121% 4% 20% 7% 34% 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.
- Schwab Select ETF Plan Has Bright Prospects
04/06/2011
Schwab ETF Plan Has Good Pedigree and Bright Prospects Retirement is now a "hair on fire" problem. There is much talk of working longer, downsizing, living on less. However, there is something you can do to help improve your risk adjusted returns. Look at your portfolios and plans to build a diversified portfolio with a systematic investment strategy.
This is not as hard as you might think -- to highlight this point, we feature a plan created by a non professional that matches up well with any of the other plans. Kevin Carr. is an individual investor who employs a long term strategy. He manages an individual common stock portfolio as well as many plans on MyPlan IQ. If you have any questions regarding this plan please contact him.
This plan provides you with Schwab's experts’ top picks of low-cost ETFs representing approximately 50 ETFs, based on rigorous criteria including expenses, tracking error, trading volume, and more. Schwab ETFs trade commission free. There are no redemption periods so you can start today and not worry about holding periods.We report on this Schwab ETF Select List which consists of 49 funds. These funds give exposure to 6 major assets: US Equity, Commodity, Foreign Equity, REITs, Emerging Market Equity, Fixed Income.
Asset Class Ticker Name LARGE BLEND SCHX Schwab U.S. Large-Cap ETF LARGE GROWTH SCHG Schwab U.S. Large-Cap Growth ETF LARGE VALUE SCHV Schwab U.S. Large-Cap Value ETF MID-CAP BLEND VO Vanguard Mid-Cap ETF Mid-Cap Growth VOT Vanguard Mid-Cap Growth ETF MID-CAP VALUE VOE Vanguard Mid-Cap Value ETF SMALL BLEND SCHA Schwab U.S. Small-Cap ETF Small Growth VBK Vanguard Small Cap Growth ETF SMALL VALUE VBR Vanguard Small Cap Value ETF LARGE BLEND SCHB Schwab U.S. Broad Market ETF LARGE VALUE VYM Vanguard High Dividend Yield Indx ETF Foreign Large Blend SCHF Schwab International Equity ETF Foreign Large Growth EFG iShares MSCI EAFE Growth Index Foreign Large Value EFV iShares MSCI EAFE Value Index FOREIGN SMALL/MID GROWTH SCHC Schwab International Small-Cap Eq ETF DIVERSIFIED EMERGING MKTS SCHE Schwab Emerging Markets Equity ETF Foreign Large Blend VEU Vanguard FTSE All-World ex-US ETF WORLD STOCK VT Vanguard Total World Stock Index ETF EUROPE STOCK VGK Vanguard European ETF DIVERSIFIED PACIFIC/ASIA VPL Vanguard Pacific Stock ETF JAPAN STOCK EWJ iShares MSCI Japan Index China Region GXC SPDR S&P China Intermediate-Term Bond BND Vanguard Total Bond Market ETF SHORT GOVERNMENT SCHO Schwab Short-Term U.S. Treasury ETF Intermediate Government SCHR Schwab Intermediate-Term U.S. Trsy ETF LONG GOVERNMENT TLH iShares Barclays 10-20 Year Treasury Bd Inflation-Protected Bond SCHP Schwab U.S. TIPS ETF Intermediate-Term Bond CIU iShares Barclays Intermediate Credit Bd High Yield Bond JNK SPDR Barclays Capital High Yield Bond WORLD BOND BWX SPDR Barclays Capital Intl Treasury Bond Muni National Long MUB iShares S&P National AMT-Free Muni Bd Consumer Discretionary XLY Consumer Discret Select Sector SPDR Consumer Staples XLP Consumer Staples Select Sector SPDR Equity Energy XLE Energy Select Sector SPDR Financial XLF Financial Select Sector SPDR Health XLV Health Care Select Sector SPDR Industrials XLI Industrial Select Sector SPDR Natural Resources XLB Materials Select Sector SPDR Technology XLK Technology Select Sector SPDR Communications IYZ iShares Dow Jones US Telecom Utilities XLU Utilities Select Sector SPDR COMMODITIES BROAD BASKET DBC PowerShares DB Commodity Index Tracking Commodities Agriculture DBA PowerShares DB Agriculture Commodities Precious Metals IAU iShares Gold Trust Commodities Industrial Metals DBB PowerShares DB Base Metals Commodities Energy USL United States 12 Month Oil MISCELLANEOUS SECTOR PFF iShares S&P U.S. Preferred Stock Index REAL ESTATE VNQ Vanguard REIT Index ETF Asset Class Number of funds Balanced Fund 0 REITs 1 Fixed Income 9 Commodity 5 Sector Fund 11 Foreign Equity 8 Emerging Market Equity 3 US Equity 11 Other 1 Total 49 Many are looking for access to a well rounded ETF plan through Schwab. This fills this hole and as Schwab makes more of their own funds available, it will be possible to move them into the plan. On this review, the only comment would be to add another REIT choice. The other asset classes have a good number of selections without being overwhelming.
As of Apr 4, 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 (99%)
Fund Quality -- Rated as average (47%)
Portfolio Building -- Rated as average (56%)
Overall Rating: above average (66%)
Thehigh diversification score means that all the major and minor asset classes have been ticked. Fund quality is lower because some of the ETF's don't have a long history but that shouldn't impede the ability for the future.
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 4, 2011)Performance table (as of Apr 4, 2011)
Portfolio Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe Schwab ETF Select List Tactical Asset Allocation Moderate 9% 82% 8% 72% 12% 89% Schwab ETF Select List Strategic Asset Allocation Moderate 14% 118% 3% 15% 4% 20% Six Core Asset ETF Benchmark Tactical Asset Allocation Moderate 9% 81% 10% 82% 13% 89% Six Core Asset ETF Benchmark Strategic Asset Allocation Moderate 14% 121% 4% 20% 7% 34%
This portfolio performs well against the six asset ETF benchmark- SAA provides lower volatility while albeit delivering lower historical returns but as more of the newer funds are applied to the portfolio, there will be more opportunity for closing the gap
- The TAA portfolios run neck and neck over the five year period
In a future article, we will review performance over the last three months to see how the plan has performed in the light of recent events.
Kay Takeaways- Building a plan of funds is not the preserve of the few -- anybody who has the interest and application to research can provide well constructed plans
- It is possible to benefit from those individuals while still having transparency and not being captive to any particular broker
Symbols: SPY, VTI, EFA, VEU, EEM, VWO, IYR, VNQ, ICF, AGG, BND, DBC, HYG, JNK, PHB, CIU, BIV, MUB, TFI, PZA, MLN, GII, PUI, DBU, RYU, UPW, IYH, IXJ, VHT, XBI, PBE, DBR, RYH, EFG, IXP, PTE, DGG, LTL, IYM, IGE, VAW, XLB, XME, PYZ, DBN, RTM, UYM, MTK, PTF, DBT, RYT, ROM, GWL, PFA, IVE, IWW, JKF, VTV, ELV, PWV, RPV, SCHV, EFV, PID, DWM, IYF, VFH, IPF, PFI, DRF, RYF, KXI, VDC, PSL, DPN, RHS, RXI, VCR, IYJ, EXI, VIS, IGOV, BWX, WIP, IVV, IYY, IWV, VV, DLN, RSP, SCHX, IOO, VT, 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, IJH, IWR, JKG, VO, MDY, EMM, PJG, DON, EZM, MVV, IFSM, VSS, SCHC, IJS, IWN, JKL, VBR, DSV, PWY, RZV, UVT, IJR, IWM, JKJ, VB, DSC, PJM, DES, SAA, UWM, SCHA, GMM, PXH, DEM, SCHE, ITE, IXC, IPW, DBE, RYE, DKA, IEI, VGIT, IJK, IWP, VOT, EMG, PWJ, RFG, UKW, IJT, IWO, JKK, VBK, DSG, PWT, RZG, UKK, TIP, EPP, VPL, GMF, PAF, EWJ, JPP, PJO, DXJ, GSG
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.
- Schwab ETF Select List Plan Offers Diversification and High Quality Fund Selection
03/16/2011
by Kevin Carr, A MyPlanIQ Expert User
On March 9, 2011, Charles Schwab announced the release of the ETF Select List. The quarterly Schwab ETF Select List was created by Charles Schwab Investment Advisory, Inc. and is a filtered list of all of the ETFs in the marketplace, highlighting pre-screened, low-cost ETFs. Schwab used quantitative and qualitative screens to filter each ETF and build the list, covering 6 major asset categories and 45 minor asset categories. All ETFs, including Schwab ETFs, are evaluated using the same criteria and broken into sectors for US Equity, Foreign Equity, Emerging Market Equity, Fixed Income, Commodity and REITs.
The ETF Select List gives investors a choice of low-cost, pre-screened ETFs. Schwab highlights just one ETF in each category, chosen based on specific criteria including expense ratio, risk, structure and how well it fits into its category. To make the list, an ETF has to meet minimum criteria that include assets under management, including narrowness of index, trading volume, bid/ask volatility, risk, annualized cost of ownership, fund structure and fit within a given category. The list excludes exchange-traded notes (ETNs), inverse or leveraged ETFs, actively managed ETFs, and unmanaged baskets of securities.
While the ETF Select List has only been out a few days, I constructed a plan on MyPlanIQ platform. The Schwab ETF Select List has no redemption periods, is commission efficient and offers low expenses.
As of March 13, the Schwab ETF Select List Plan has a four star investment menu rating with a 99% diversification score and an overall above average investment choice based on MyPlanIQ Plan Rating methodology . The Plan Rating methodology is designed to measure how effective a plan’s available funds are using key factors such as diversification, fund quality and portfolio building.
Attribute Schwab ETF Select List Six Core Asset ETF Benchmark Diversification great (99%) average (63%) Fund Quality above average (70%) below average (23%) Portfolio Building average (53%) above average (70%) Overall Rating above average (72%) average (54%) 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 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 Mar 15, 2011)Performance table (as of Mar 15, 2011)
Portfolio Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe Schwab ETF Select List Tactical Asset Allocation Moderate 9% 88% 6% 57% 12% 91% Schwab ETF Select List Strategic Asset Allocation Moderate 11% 114% 3% 15% 4% 19% Six Core Asset ETF Benchmark Tactical Asset Allocation Moderate 9% 86% 8% 65% 12% 88% Six Core Asset ETF Benchmark Strategic Asset Allocation Moderate 12% 113% 4% 17% 6% 32% Currently Commodities, Real Estate and US Equity are doing well. These asset classes are available to Schwab ETF Select List participants.
To Summarize, Schwab ETF Select List Plan offers wide diversification, high quality funds with low expenses. compared with other brokerage supported ETF plans, it is very favorable. From time to time, we will review the plan.
Symbols:DBC,DBA,IAU,DBB,USL,PFF,VNQ,XLY,XLP,XLE,XLF,XLV,XLI,XLB,XLK,IYZ,XLU,BND,SCHO,SCHR,TLH,SCHP,CIU,JNK,BWX,MUB,SCHF,EFG,EFV,SCHC,SCHE,VEU,VT,VGK,VPL,EWJ,GXC,SCHX,SCHG,SCHV,VO,VOT,VOE,SCHA,VBK,VBR,SCHB,VYM,
Symbols (exchange): (DBC),(DBA),(IAU),(DBB),(USL),(PFF),(VNQ),(XLY),(XLP),(XLE),(XLF),(XLV),(XLI),(XLB),(XLK),(IYZ),(XLU),(BND),(SCHO),(SCHR),(TLH),(SCHP),(CIU),(JNK),(BWX),(MUB),(SCHF),(EFG),(EFV),(SCHC),(
SCHE),(VEU),(VT),(VGK),(VPL),(EWJ),(GXC),(SCHX),(SCHG),(SCHV),(VO),(VOT),(VOE),(SCHA),(VBK),(VBR),(SCHB),(VYM) - Replacing VEA and EFV with PID, PIZ Boosts Morningstar Clone Across the Board
03/01/2011
In a previous article we looked at how the ETFs compared with managed funds available in the Morningstar 401K plan – we are using this as an excellent example of a plan with a reasonable number of funds that can still deliver a portfolio with good returns.
We summarized the differences between the ETF clone and the original by creating a score for each fund and then summing them up by major asset class. This gave us the following table:
Asset Class
ETF Score
Mutul Fund Score
Delta
US Equities
420%
422%
0%
International Equities
17%
56%
228%
Emerging Markets
62%
46%
-26%
Real Estate
43%
45%
4%
Commodities
31%
15%
-52%
Fixed Income
107%
173%
62%
We noted that the two areas of biggest concern were the international equities and the fixed income. We speculated that it might well be difficult to emulate the managed fixed income performance delivered by two of the leading companies in that area PIMCO and Loomis Sayles.
In this article, we start by reviewing the international equities class to see if we can close the gap between the clone and the original. We recognize that this might be considered cherry picking in the sense that we are using historical returns that may not be reflected going forward. Nevertheless, the exercise will be instructive, even if only to show where it can be dangerous to just chase returns.
With international equity, the current funds are:
Ticker
Description
5 year AR (%)
3 year AR (%)
1 year AR (%)
ETF Score
Mfund Score
VEA
Vanguard Europe Pacific ETF
(2.68)
17.45
13%
VWILX
Vanguard International Growth Adm
4.04
(1.26)
21.65
32%
EFV
iShares MSCI EAFE Value Index
(0.66)
(4.69)
12.77
4%
TBGVX
TweedyBrowne Global Value
2.87
1.38
13.75
24%
When we looked at the alternative ETFs, we reduced it to the following choices:
Ticker
Description
5 year AR (%)
3 year AR (%)
1 year AR (%)
ETF Score
1.21
(4.39)
16.64
14%
(3.15)
21.38
17%
18.55
19%
2.26
(2.95)
18.48
21%
1.99
(3.96)
19.00
19%
(2.29)
30.84
27%
There are some intriguing choices and as time goes on, there will be increasing numbers with more established history.
· We chose PID because of strong returns and because dividend ETFs go for solid companies and in the current environment, that is a sound choice
· We chose PID because of its strong results. There is something of risk because of the shorter history but we selected it nevertheless
When we swap out VEA and EFV for PID and PIZ, we see the following historical behavior
Performance chart (as of Feb 28, 2011)
Performance table (as of Feb 28, 2011)
Portfolio Name
1Yr AR
1Yr Sharpe
3Yr AR
3Yr Sharpe
5Yr AR
5Yr Sharpe
Morningstar 401K ETF Clone-PI-PZ Tactical Asset Allocation Moderate
17%
119%
9%
66%
13%
84%
Morningstar 401K ETF Clone-PI-PZ Strategic Asset Allocation Moderate
18%
159%
2%
12%
5%
27%
Morningstar 401K ETF Clone Tactical Asset Allocation Moderate
15%
112%
8%
63%
11%
75%
Morningstar 401K ETF Clone Strategic Asset Allocation Moderate
17%
155%
3%
14%
6%
30
As we mentioned earlier, it is important not to fall into the trap of just chasing returns and we note that over the longer time horizons, this switch has degraded returns for the strategic asset allocation.
However, we note that this has bumped tactical asset allocation across the board.
In the next article, we will look at the impact of fixed income.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.
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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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