 |
Vanguard ETF: |  |
7.4%* |
|
Diversified Core: | |
8.1%* |
|
Six Core Asset ETFs: | |
7.3%* |
Articles on PHIYX
- Employees in Sprint Nextel Dial up An Average 401K Retirement Plan
03/22/2011
Sprint Nextel Corporation offers wireless and wireline communications products and services to consumers, businesses, and government users in the United States, Puerto Rico, and the U.S. Virgin Islands. Sprint Nextel was founded in 1899 and is headquartered in Overland Park, Kansas. Recently, AT&T (T) announced its plan to acquire T-Mobile USA, putting enormous pressure to Sprint Nextel, ranked only as a distant the third largest mobile phone service provider in the U.S.
In this article, we review Sprint Nextel 401K Plan. We will discuss how participants in the plan can achieve reasonable investment results using asset allocation strategies. We will also discuss how those portfolios are positioned in today’s market environment.
Sprint Nextel 401K Plan's 401K plan consists of 29 funds. These funds enable participants to gain exposure to 4 major assets: US Equity, Foreign Equity, Emerging Market Equity, Fixed Income. Four Core Asset ETF (EM) Benchmark's 401K plan consists of 4 funds. These funds enable participants to gain exposure to 4 major assets: US Equity, Foreign Equity, Emerging Market Equity, Fixed Income.
The following table lists its fund choices:
Asset Class Ticker Name LARGE VALUE TWEIX American Century Equity Income Inv SMALL VALUE DFSVX DFA US Small Cap Value I Mid-Cap Growth HAMGX Harbor Mid Cap Growth Instl High Yield Bond PHIYX PIMCO High Yield Instl WORLD BOND PFUIX PIMCO Foreign Bond WORLD STOCK GMGEX GMO Global Equity Allocation III SMALL BLEND IWM iShares Russell 2000 Index Foreign Large Blend EFA iShares MSCI EAFE Index LARGE BLEND SPY SPDR S&P 500 MID-CAP BLEND MDY SPDR S&P MidCap 400 Multisector Bond SMARX Brandes Separately Managed Acct Res Tr Multisector Bond SMARX Brandes Separately Managed Acct Res Tr Intermediate-Term Bond AGG iShares Barclays Aggregate Bond ROOT CASH CASH DIVERSIFIED EMERGING MKTS EEM iShares MSCI Emerging Markets Index Foreign Large Blend VGTSX Vanguard Total Intl Stock Index Inv LARGE GROWTH VWUSX Vanguard US Growth Inv LARGE VALUE VIVAX Vanguard Value Index Inv Target Date Funds Northern Trust Corp The list of minor asset classes covered by Sprint Nextel 401K Plan The list of minor asset classes covered by Four Core Asset ETF (EM) Benchmark Diversified Emerging Mkts: EEM, GMM, PXH, DEM, SCHE
Equity: VTI, VT
Foreign Large Blend: EFA, VEU, GWL, PFA
High Yield Bond: HYG, JNK, PHB
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
Mid-cap Growth: IJK, IWP, VOT, EMG, PWJ, RFG, UKW
Multisector Bond: AGG, GBF, BND, LAG
Small Blend: IJR, IWM, JKJ, VB, DSC, PJM, DES, SAA, UWM, SCHA
Small Value: IJS, IWN, JKL, VBR, DSV, PWY, RZV, UVT
World Bond: IGOV, BWX, WIP
World Stock: IOO, VTDiversified Emerging Mkts: EEM, GMM, PXH, DEM, SCHE
Foreign Large Blend: EFA, VEU, GWL, PFA
Intermediate-term Bond: AGG, CIU, BIV, BND
Large Blend: IVV, IYY, IWV, VTI, VV, SPY, DLN, RSP, SCHXAsset Class Sprint Nextel 401K Plan Four Core Asset ETF (EM) Benchmark Fixed Income 5 1 Sector Fund 0 0 Foreign Equity 3 1 Emerging Market Equity 1 1 US Equity 19 1 Other 1 0 Total 29 4 As of Mar 21, 2011, Sprint Nextel 401K Plan investment choice is rated as average and Four Core Asset ETF (EM) Benchmark investment choice is rated as below 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:
Attribute Sprint Nextel 401K Plan Four Core Asset ETF (EM) Benchmark Diversification above average (83%) poor (8%) Fund Quality below average (15%) poor (8%) Portfolio Building average (59%) below average (20%) Overall Rating average (53%) below average (13%) 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 Mar 21, 2011)Performance table (as of Mar 21, 2011)
Portfolio Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe Sprint Nextel 401K Plan Tactical Asset Allocation Moderate 4% 19% 10% 79% 11% 70% Sprint Nextel 401K Plan Strategic Asset Allocation Moderate 11% 92% 4% 17% 5% 24% Four Core Asset ETF (EM) Benchmark Tactical Asset Allocation Moderate -0% -16% 6% 46% 8% 51% Four Core Asset ETF (EM) Benchmark Strategic Asset Allocation Moderate 11% 66% 4% 11% 5% 18% Currently Commodities, Real Estate and US Equity are doing well. Only US Equity is available to Sprint Nextel 401K Plan participants.
To summarize, Sprint Nextel offers its employees average rated fund choices. It has strong fixed income funds or portfolios. Some low cost funds such as DFA index fund or S&P index funds are good portfolio building blocks. Actively managed funds such as American Century Equity Income (TWEIX) or GMO Global Equity Allocation (GMGEX) have been outstanding. The plan can extend its diversification by offering further funds in major asset classes such as REITs as well as some high quality actively managed equity funds.
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.
Symbols:S,T,SPY,VTI,EFA,VEU,EEM,VWO,AGG,BND,VT,HYG,JNK,PHB,CIU,BIV,GWL,PFA,IVE,IWW,JKF,VTV,ELV,PWV,RPV,SCHV,IGOV,BWX,WIP,IVV,IYY,IWV,VV,DLN,RSP,SCHX,IOO,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,GMM,PXH,DEM,SCHE,GBF,LAG,IJK,IWP,VOT,EMG,PWJ,RFG,UKW,TWEIX,DFSVX,HAMGX,PHIYX,PFUIX,GMGEX,
- Morningstar's 401K Clone Begs the Question- What about Managed Funds?
02/27/2011
We have already examined the Morningstar 401K plan. We explained why it is a model of plan creation - providing a manageable number of funds with broad asset class exposure that enables portfolios that can deliver solid returns. We also provided an ETF clone which enabled portfolios that underperformed the original.
Performance chart (as of Feb 25, 2011)
Performance table (as of Feb 25, 2011)
Portfolio Name
1Yr AR
1Yr Sharpe
3Yr AR
3Yr Sharpe
5Yr AR
5Yr Sharpe
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%
Morningstar Inc 401K Plan Tactical Asset Allocation Moderate
22%
168%
13%
121%
14%
125%
Morningstar Inc 401K Plan Strategic Asset Allocation Moderate
15%
178%
3%
22%
5%
35%
The chart is a little misleading as the ETF Clone has fewer choices until recently because of the newness of the ETF funds. If we look at the table and consider just the five year return figures we can see that the strategic asset allocation returns are similar but there is an additional 3% garnered from the original.
This has prompted further analysis of the funds which we present here.
We tracked returns for all of the funds used in each portfolio over 5, 3 and 1 years. Some of the ETFs are sufficiently new that there wasn't five year data. We then created a score which was the summation of the five year number multiplied by three, the three year number multiplied by 1.5 and the one year number.
Name
5 year AR (%)
3 year AR (%)
1 year AR (%)
ETF Score
Mu Fund Score
PowerShares DB Commodity Index Tracking
5.97
(4.76)
20.50
31%
PIMCO Commodity Real Ret Strat Instl
2.32
(8.45)
20.85
15%
SPDR S&P Emerging Markets Small Cap
8.69
(0.04)
18.93
45%
American Funds New World A
8.29
(0.21)
17.00
42%
Oppenheimer Developing Markets Y
(2.86)
(7.95)
25.22
5%
Vanguard Emerging Markets Stock ETF
17.45
17%
SPDR Barclays Capital High Yield Bond
4.15
6.89
11.89
35%
PIMCO High Yield Instl
5.51
6.10
7.11
33%
PIMCO Real Return Instl
5.40
4.34
5.44
28%
iShares Barclays TIPS Bond
4.10
2.46
4.06
20%
iShares Barclays Aggregate Bond
5.28
5.05
3.76
27%
PIMCO Total Return Instl
8.07
8.64
6.61
44%
iShares Barclays Interm Govt/Credit Bond
3.12
2.53
7%
Loomis Sayles Bond Instl
6.35
4.82
8.32
35%
STABLEVALUE
3.96
3.07
(0.21)
16%
iShares Barclays 1-3 Year Treasury Bond
3.65
1.99
1.07
15%
Vanguard Short-Term Bond ETF
1.08
0.90
3%
Vanguard Short-Term Bond Index Inv
4.36
2.87
0.10
17%
Vanguard Europe Pacific ETF
(2.68)
17.45
13%
Vanguard International Growth Adm
4.04
(1.26)
21.65
32%
iShares MSCI EAFE Value Index
(0.66)
(4.69)
12.77
4%
TweedyBrowne Global Value
2.87
1.38
13.75
24%
Morgan Stanley Real Estate I
2.55
2.13
34.01
45%
Vanguard REIT Index ETF
2.09
2.26
33.32
43%
Fidelity Select Brokerage & Invmt Mgmt
(1.09)
(1.28)
15.23
10%
Financial Select Sector SPDR
(10.63)
(12.91)
15.61
-36%
iShares Russell 3000 Index
1.91
1.28
21.97
30%
Oakmark I
4.75
5.85
17.86
41%
Selected American Shares S
1.35
(1.68)
15.91
17%
Vanguard Dividend Appreciation ETF
3.37
18.54
24%
Vanguard Institutional Index Instl
2.11
0.16
19.63
26%
Vanguard Total Stock Market ETF
2.57
1.55
23.38
33%
Calvert Social Index I
1.71
1.66
23.25
31%
Harbor Capital Appreciation Instl
3.15
4.35
20.33
36%
Vanguard Mega Cap 300 Gr Index ETF
3.25
23.65
29%
Vanguard Growth ETF
3.25
2.33
22.48
36%
American Funds Washington Mutual R5
1.68
(1.10)
16.74
20%
Vanguard Value ETF
2.03
(0.60)
19.16
24%
Brandywine
1.16
(3.55)
36.42
35%
iShares Russell Midcap Growth Index
4.55
5.27
38.04
60%
PRIMECAP Odyssey Aggressive Growth
6.64
9.56
18.72
53%
Vanguard Mid-Cap Growth ETF
3.45
36.71
42%
Vanguard Selected Value Inv
4.65
4.17
23.07
43%
Vanguard Mid-Cap Value ETF
3.77
23.68
29%
iShares S&P Moderate Allocation
9.73
10%
Vanguard STAR Inv
3.61
2.57
12.85
28%
T. Rowe Price Small-Cap Stock
5.52
10.67
38.04
71%
Vanguard Small Cap ETF
4.14
6.49
31.92
54%
Allianz NFJ Small Cap Value Instl
6.67
5.67
28.03
57%
Vanguard Small Cap Value ETF
2.50
4.42
25.69
40%
Instead of looking at each fund individually, we added the scores in each of the major asset classes together:
Asset Class
ETF Score
Mutual Fund Score
MF/ETF
Delta
US Equities
4.20
4.22
0%
International Equities
0.17
0.56
228%
Emerging Markets
0.62
0.46
-26%
Real Estate
0.43
0.45
4%
Commodities
0.31
0.15
-52%
Fixed Income
1.07
1.73
62%
This gives us some insight on the different portfolios.
- US equity returns are running neck and neck - indicating that to improve the returns of the ETF portfolio, looking at the US equities should only be undertaken when the other asset classes have been examined
- There is a significant gap in the international equities. The Vanguard Europe Pacific ETF looks like it will help but this is an area for shoring up the ETF portfolio
- The Emerging Market ETF outperforms the original so, while it may be better to improve performance, that is a secondary task
- Real estate runs neck and neck so look at that later
- Commodities, the ETFs are running ahead so, again, we can look at that later
- Fixed income is probably the biggest area where the difference is explained. It is the largest single asset category in terms of funds invested (in most cases) and there is a significant difference between the two. The original plan has two of the leading managed fixed income funds which shows consistently higher performance.
The takeaway is that to look to improve returns from the Clone ETF, focus needs to be applied on international and fixed income asset classes.
As we go through this exercise, this will bring to the fore a elephant in the ETF space - are there times when managed funds do outperform indexed funds - intuitively it would seem so and fixed income in this market seems to suggest itself as a prime example.
We will examine this deeper in an upcoming article
Disclosure:
MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.
Symbols:DBC,PCRIX,EWX,NEWFX,ODVYX,VWO,JNK,PHIYX,PRRIX,TIP,AGG,PTTRX,GVI,LSBDX,PRWBX,SHY,BSV,VBISX,VEA,VWILX,EFV,TBGVX,REFDX,VNQ,FSLBX,XLF,IWV,OAKMX,SLASX,VIG,VINIX,VTI,CISIX,HACAX,MGK,VUG,RWMFX,VTV,BRWIX,IWP,POAGX,VOT,VASVX,VOE,AOM,VGSTX,OTCFX,VB,PSVIX,VBR,
- Hewlett Packard 401K Report On 06/13/2011
06/13/2011
Retirement investing is a long term process. This report reviews Hewlett Packard 401K 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 investors in Hewlett Packard 401K can achieve reasonable investment results using asset allocation strategies.
Plan Review and Rating
Hewlett Packard (Ticker:HPQ) has the "Hewlett Packard 401K".
Hewlett Packard Company (commonly known as 'HP') (NYSE: HPQ) is one of the largest IT companies. Founded by Bill Hwelett and Dave Packard in Palo Alto, California, HP was the earliest technology company that eventually led the formation of Silicon Valley in the San Francisco bay area. Today Hewlett-Packard has over 300 thousands employees world wide.
HP is renown to be employee friendly. It has been named several times as one of the best companies to work for. Its 401k plan provides a fairly diversified array of high quality funds.
Hewlett Packard 401K'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, Fixed Income.
As of Jun 13, 2011, this plan investment choice is rated as above average 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 great (97%)
Fund Quality -- Rated as average (62%)
Portfolio Building -- Rated as above average (65%)
Overall Rating: above average (74%)Current Economic and Market Conditions
Last week marked the sixth week of losses in the U.S. stock market. Investors are now clearly in a risk off mode. Key observations include
- U.S. stock market index (Vanguard Total Stock Market Index (VTI)), for example, is now ranked below U.S. 7-10 long term treasury bonds (IEF) and just a notch above credit bond index (CFT) in our major trend table.
- For the time being, commodities (DBC) and Gold (GLD) are still holding first places, with international REITs (RWX) is still strong.
- On the fixed income side, long bonds (TLT) (LQD) are now trending higher while emerging market bonds (PCY) is still holding a higher place.
This shows investors' strong risk aversion but it is still not water shed flight to safety moment yet. Again, we are vigilant to monitor how markets are unfolding here.
For more information on how these assets are ranked, please see here.
Assets Class Symbols 05/27
Trend
Score05/20
Trend
ScoreDirection International REITs RWX 11.77% 10.82% ^ Commodities DBC 10.84% 10.32% ^ US Equity REITs VNQ 10.77% 10.41% ^ Gold GLD 9.42% 10.06% v Emerging Market Stks VWO 8.56% 6.72% ^ US Stocks VTI 8.29% 8.23% ^ International Developed Stks EFA 6.77% 5.23% ^ US High Yield Bonds JNK 6.37% 6.37% v International Treasury Bonds BWX 5.96% 4.66% ^ Frontier Market Stks FRN 4.05% 4.27% v Emerging Mkt Bonds PCY 3.57% 4.27% v Intermediate Treasuries IEF 2.71% 2.39% ^ US Credit Bonds CFT 2.5% 2.81% v Municipal Bonds MUB 2.13% 2.0% ^ Total US Bonds BND 1.99% 1.92% ^ Mortgage Back Bonds MBB 1.75% 1.8% v Treasury Bills SHV 0.07% 0.02% ^ 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 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 Jun 13, 2011)Performance table (as of Jun 13, 2011)
Portfolio Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe Hewlett Packard 401K Tactical Asset Allocation Moderate 9% 94% 11% 87% 12% 93% Hewlett Packard 401K Strategic Asset Allocation Moderate 15% 201% 5% 26% 6% 36% Five Core Asset ETF Benchmark Tactical Asset Allocation Moderate 10% 102% 9% 74% 11% 77% Five Core Asset ETF Benchmark Strategic Asset Allocation Moderate 16% 154% 4% 17% 7% 27% Currently are doing well. But these asset classes are not available to Hewlett Packard 401K participants.
To summarize, investors adopting Hewlett Packard 401K plan can achieve reasonable investment returns by adopting asset allocation strategies that are tailored to their risk profiles.
Symbols:HPQ, CASH, SPY, VTI, VEU, VWO, VNQ, BND, ICAEX, ARTIX, PHIYX, LZEMX, PRRIX, VPMCX, RNWFX, PIGLX, MIDJX, DODFX, DSFRX, FMAGX, FCNTX, FRESX, FLPSX, DODGX, PTRIX, PEBIX, PISIX, PIGIX, PFMIX, PTSHX, PFGCX, VEXMX, CRIMX
Exchange Tickers: (HPQ), (CASH), (SPY), (VTI), (VEU), (VWO), (VNQ), (BND), (ICAEX), (ARTIX), (PHIYX), (LZEMX), (PRRIX), (VPMCX), (RNWFX), (PIGLX), (MIDJX), (DODFX), (DSFRX), (FMAGX), (FCNTX), (FRESX), (FLPSX), (DODGX), (PTRIX), (PEBIX), (PISIX), (PIGIX), (PFMIX), (PTSHX), (PFGCX), (VEXMX), (CRIMX) - Hewlett Packard 401K Report On 06232011
06/23/2011