 |
Vanguard ETF: |  |
7.4%* |
|
Diversified Core: | |
8.1%* |
|
Six Core Asset ETFs: | |
7.3%* |
Articles on LSVEX
- Accenture 401K Retirement Plan: High Quality and Low Cost Funds with Proper Diversification
03/25/2011
Accenture plc (ACN) operates as a management consulting, technology services, and outsourcing company. As a consulting and service provider, Accenture offers human resources and benefit consulting to various corporations. It is of interests to look at Accenture 401K plan offered to Accenture's employees.
The 401K plan consists of 28 funds. These funds enable participants to gain exposure to 5 major assets: US Equity, Foreign Equity, Emerging Market Equity, REITs, Fixed Income.
Asset Class Ticker Name Retirement Income FFFAX Fidelity Freedom Income Target Date 2016-2020 FFFDX Fidelity Freedom 2020 Target Date 2016-2020 FFFDX Fidelity Freedom 2020 Target Date 2016-2020 FFFDX Fidelity Freedom 2020 Target Date 2016-2020 FFFDX Fidelity Freedom 2020 Target Date 2016-2020 FFFDX Fidelity Freedom 2020 Target Date 2016-2020 FFFDX Fidelity Freedom 2020 LARGE BLEND MVEIX Monteagle Select Value Fund Intermediate-Term Bond PTTRX PIMCO Total Return Instl Intermediate-Term Bond VBMFX Vanguard Total Bond Market Index Inflation-Protected Bond VIPSX Vanguard Inflation-Protected Secs LARGE BLEND VIIIX Vanguard Institutional Index Instl Pl LARGE BLEND LLPFX Longleaf Partners LARGE VALUE LSVEX LSV Value Equity MID-CAP VALUE VMVIX Vanguard Mid-Cap Value Index Inv SMALL BLEND NAESX Vanguard Small Cap Index REAL ESTATE VGSIX Vanguard REIT Index LARGE GROWTH FCNTX Fidelity Contrafund LARGE GROWTH FOCPX Fidelity OTC LARGE GROWTH HACAX Harbor Capital Appreciation Instl LARGE GROWTH MGRIX Marsico Growth SMALL VALUE ROFIX Royce Opportunity Instl WORLD STOCK RNPFX American Funds New Perspective R5 Foreign Large Growth FDIVX Fidelity Diversified International DIVERSIFIED EMERGING MKTS VEIEX Vanguard Emerging Markets Stock Foreign Large Blend VGTSX Vanguard Total Intl Stock Index
The list of minor asset classes covered:
Diversified Emerging Mkts: EEM, GMM, PXH, DEM, SCHE
Foreign Large Blend: EFA, VEU, GWL, PFA
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 Value: IJJ, IWS, JKI, VOE, EMV, PWP, RFV, UVU
Real Estate: IYR, ICF, VNQ
Retirement Income:
Small Blend: IJR, IWM, JKJ, VB, DSC, PJM, DES, SAA, UWM, SCHA
Small Value: IJS, IWN, JKL, VBR, DSV, PWY, RZV, UVT
Target Date 2016-2020: TZG
World Stock: IOO, VTAsset Class Number of funds Balanced Fund 7 REITs 1 Fixed Income 3 Commodity 0 Sector Fund 0 Foreign Equity 3 Emerging Market Equity 1 US Equity 11 Other 2 Total 28 As of Mar 24, 2011, this plan investment choice is rated as above 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 great (87%)
Fund Quality -- Rated as below average (27%)
Portfolio Building -- Rated as great (86%)
Overall Rating: above average (69%)From the table above, one can see that the plan has several outstanding stock funds such as Longleaf Partners (LLPFX), Royce Opportunity (ROFIX), LSV Value Equity (LSVEX) and Fidelity Contra (FCNTX). It has also the solid fixed income fund PIMCO Total Return (PTTRX). In addition, it uses many Vanguard index funds that have low cost to complete asset class coverage. The fund choices cover five major asset classes, which are fairly adequate for diversification purpose.Let's analyze further how the plan can help its participants by using two asset allocation strategies: strategic and tactical asset allocation strategies (SAA and TAA for participants in Accenture 401K).
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.
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 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
REITs: IYR or VNQ or ICF
Emerging Market Equity: EEM or VWO
Fixed Income: AGG or BND
Performance chart (as of Mar 24, 2011)Performance table (as of Mar 24, 2011)
Portfolio Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe Accenture 401K Tactical Asset Allocation Moderate 8% 43% 12% 93% 13% 84% Accenture 401K Strategic Asset Allocation Moderate 10% 80% 6% 30% 7% 33% Five Core Asset ETF Benchmark Tactical Asset Allocation Moderate 7% 42% 8% 60% 10% 63% Five Core Asset ETF Benchmark Strategic Asset Allocation Moderate 13% 76% 4% 16% 6% 19% Accenture's Strategic and Tactical model portfolios beat their counterparts of the Five Core Asset benchmarks respectively. This indicates a solid plan that can be used for many asset allocation styles.
To summarize, Accenture 401K participants can achieve the best investment returns by adopting asset allocation strategies that are tailored to their risk profiles. Moreover, they can take advantage of the good fund choices offered by the plan.
Symbols:ACN,SPY,VTI,EFA,VEU,EEM,VWO,IYR,VNQ,ICF,AGG,BND,CIU,BIV,GWL,PFA,IVE,IWW,JKF,VTV,ELV,PWV,RPV,SCHV,TZG,IVV,IYY,IWV,VV,DLN,RSP,SCHX,IOO,VT,IVW,IWZ,JKE,VUG,ELG,QQQQ,RPG,SCHG,IJJ,IWS,JKI,VOE,EMV,PWP,RFV,UVU,IJS,IWN,JKL,VBR,DSV,PWY,RZV,UVT,IJR,IWM,JKJ,VB,DSC,PJM,DES,SAA,UWM,SCHA,GMM,PXH,DEM,SCHE,TIP,PTTRX,LSVEX,LLPFX,ROFIX,
Exchange Tickers:(ACN), (SPY), (VTI), (EFA), (VEU), (EEM), (VWO), (IYR), (VNQ), (ICF), (AGG), (BND), (CIU), (BIV), (GWL), (PFA), (IVE), (IWW), (JKF), (VTV), (ELV), (PWV), (RPV), (SCHV), (TZG), (IVV), (IYY), (IWV), (VV), (DLN), (RSP), (SCHX), (IOO), (VT), (IVW), (IWZ), (JKE), (VUG), (ELG), (QQQQ), (RPG), (SCHG), (IJJ), (IWS), (JKI), (VOE), (EMV), (PWP), (RFV), (UVU), (IJS), (IWN), (JKL), (VBR), (DSV), (PWY), (RZV), (UVT), (IJR), (IWM), (JKJ), (VB), (DSC), (PJM), (DES), (SAA), (UWM), (SCHA), (GMM), (PXH), (DEM), (SCHE), (TIP)
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.
