Vanguard ETF: | 7.4%* | ||
Diversified Core: | 8.1%* | ||
Six Core Asset ETFs: | 7.3%* |
Articles on PTTRX
- 401K Investments: Southwest Airlines Should Expand Its Horizon for Their Employees' 401k Plan
09/12/2011
We review Southwest Airlines Co 401K Plan.
Southwest Airlines Co. (LUV) operates as a passenger airline that provides scheduled air transportation in the United States. As of December 31, 2009, it operated 537 Boeing 737 aircraft and provided service to 68 cities in 35 states. The company also sells frequent flyer credits and related services to companies participating in its Rapid Rewards frequent flyer program, including car rental agencies, hotels, restaurants, and retail locations. Southwest Airlines Co. was founded in 1967 and is headquartered in Dallas, Texas. The company is one of the best managed airline companies in the U.S.
The plan consists of 11 funds. They cover 3 major assets: US Equity, Foreign Equity, Fixed Income.
Asset Class Ticker Name Intermediate-Term Bond PTTRX PIMCO Total Return Instl LARGE GROWTH HACAX Harbor Capital Appreciation Instl Foreign Large Blend CEUFX American Funds EuroPacific Gr 529F SMALL BLEND ICSCX ICM Small Company LARGE BLEND VINIX Vanguard Institutional Index Instl Retirement Income MTDIX Manning & Napier Target Income I Target Date 2000-2010 MTHIX Manning & Napier Target 2010 I Target Date 2016-2020 MTNIX Manning & Napier Target 2020 I Target Date 2026-2030 MTPIX Manning & Napier Target 2030 I Target Date 2036-2040 MTTIX Manning & Napier Target 2040 I Target Date 2050+ MTYIX Manning & Napier Target 2050 I Excluding the 6 target date funds, there are only 5 individual funds for participants to make their own asset allocation.
As of Sep 9, 2011, this plan investment choice is rated as below 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 below average (15%)
Fund Quality -- Rated as above average (71%)
Portfolio Building -- Rated as below average (20%)
Overall Rating: below average (34%)The 5 individual funds are ranked reasonably well. However, lack of diversification coverage has serious impact on how a participant can do in portfolio management and risk management.
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 3 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
Fixed Income: AGG or BND
Performance chart (as of Sep 9, 2011)Performance table (as of Sep 9, 2011)
Portfolio Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe Southwest Airlines Co 401K Plan Tactical Asset Allocation Moderate 1% 12% 4% 41% 6% 55% Southwest Airlines Co 401K Plan Strategic Asset Allocation Moderate 2% 16% 5% 37% 5% 37% Three Core Asset ETF Benchmark Tactical Asset Allocation Moderate 11% 122% 4% 44% 5% 48% Three Core Asset ETF Benchmark Strategic Asset Allocation Moderate 3% 23% 3% 14% 2% 7% Currently Commodities, International Bonds and Fixed Income are doing well. Only Fixed Income is available to Southwest Airlines Co 401K Plan participants.
To summarize, diversification and proper risk management are the two major key factors in 401k investing. Southwest Airlines should extend its fund choices to allow plan participants in Southwest Airlines Co 401K Plan to achieve reasonable investment results using portfolio management and risk management strategies for their 401k investments.
Symbols: LUV, SPX, VTI, VEU, BND, PTTRX, HACAX, CEUFX, VINIX, 401K Investments, Retirement Investing, Portfolio Management, Asset Allocation, Risk Management
Disclaimer: 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.
- Portfolio Management: Best of Fixed Income Managers vs. Retirement Income ETFs
09/08/2011
Two defensive investment strategies useful in current stressful times are compared. The first is based on selecting the best bond fund every month or every quarter from a list of bond funds managed by Morningstar's 'Manager of the Year' P Bond Funds Momentum Based on Upgrading Fixed Income Managers of the Year`s Funds Monthly. These funds include PTTRX, TGLMX, WATFX, MWTRX, LSBDX, DODIX, FPNIX.
The second is Retirement Income ETFs that consists of a list of candidate dividend stock and bond ETFs including DVY, EMB, HYG, ICF, IDV, TIP, VIG, VWO.
The conclusion: the Fixed Income Managers of the Year is solid and has lower volatility, a good defensive strategy one should consider. Both of them are better alternatives than a broad based index such as S&P 500 (SPX) or total bond market index (AGG)
Read more from our SeekingAlpha's article:
Defensive Strategies In Stressful Times: The Best Of Fixed Income
Symbols: SPX, DVY, EMB, HYG, ICF, IDV, TIP, VIG, VWO, PTTRX, TGLMX, WATFX, MWTRX, LSBDX, DODIX, FPNIX, Retirement Investing, Dividend Stock, Retirement Income, Portfolio Management
- 401K Investments: Facebook 401K Plan Reviewed
09/08/2011
Retirement investing is a long term process. This report reviews Facebook 401k plan, discusses the 401k investment options and presents the plan rating by MyPlanIQ. Asset allocation investment portfolios are examined. Current economic and market conditions are discussed in the context of the investment portfolios in the plan. We will then show how plan participants in Facebook 401k can achieve reasonable investment results using portfolio management and risk management strategies for their 401k investments.
Plan Review and Rating
Facebook is the largest social media company based in Palo Alto, California.
Facebook 401k's 401K plan consists of 27 funds. These funds enable participants to gain exposure to 4 major assets: US Equity, Foreign Equity, REITs, Fixed Income.
Asset Class Ticker Name LARGE BLEND NBSRX Neuberger Berman Socially Resp Inv LARGE GROWTH NMTAX Columbia Marsico 21st Century A LARGE GROWTH PIGFX Pioneer Fundamental Growth A LARGE BLEND PRGIX T. Rowe Price Growth & Income LARGE VALUE MDDVX BlackRock Equity Dividend A Small Growth PGSGX JPMorgan Small Cap Growth A LARGE BLEND OGEAX JPMorgan Equity Index A MID-CAP BLEND OMEAX JPMorgan Market Expansion Index A Mid-Cap Growth LACAX Columbia Acorn A Intermediate-Term Bond PTRRX PIMCO Total Return R REAL ESTATE IARAX AIM Real Estate A MID-CAP VALUE CMVIX BlackRock Mid-Cap Value Equity Instl Foreign Large Growth JIGRX Janus Overseas S ROOT CASH CASH Target Date 2000-2010 FACFX Fidelity Advisor Freedom 2010 A LARGE GROWTH FNIAX Fidelity Advisor New Insights A Target Date 2000-2010 FFAVX Fidelity Advisor Freedom 2005 A Target Date 2000-2010 FACFX Fidelity Advisor Freedom 2010 A Target Date 2011-2015 FFVAX Fidelity Advisor Freedom 2015 A Target Date 2016-2020 FDAFX Fidelity Advisor Freedom 2020 A Target Date 2021-2025 FATWX Fidelity Advisor Freedom 2025 A Target Date 2026-2030 FAFEX Fidelity Advisor Freedom 2030 A Target Date 2031-2035 FATHX Fidelity Advisor Freedom 2035 A Target Date 2036-2040 FAFFX Fidelity Advisor Freedom 2040 A Target Date 2041-2045 FFFZX Fidelity Advisor Freedom 2045 A Target Date 2050+ FFFLX Fidelity Advisor Freedom 2050 A NotFound NotFound NotFound As of Sep 7, 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 average (59%)
Fund Quality -- Rated as average (59%)
Portfolio Building -- Rated as above average (83%)
Overall Rating: above average (69%)Current Economic and Market Conditions
The U.S. and the rest of the world face long term structural problems that it takes time to correct. The following are some of these problems:
- The consumption driven economies in developed countries and the export driven economies in emerging countries result in a one way trade flow that can only be sustained for a limited time.
- Private households in the U.S. are highly in debt, mostly due to the Federal Reserve's loose monetary policy to prop up consumption and living standards. It is impossible to make debts go away overnight without inflicting severe social and economic hardship.
- Sovereign debt is growing out of control in many countries due to years of relaxed fiscal policies and the recent stimulus driven rescue. It should be noted that this exists not only in developed countries but also in several emerging countries, noticeably in China (adding local government debt, the Chinese government debt would rival the US) and somewhat in Brazil.
- Uneven productivity and competitiveness of work forces in developed countries and emerging countries. Both productivity and competitiveness can be simply measured by return on investment (ROI), or so called 'cost effectiveness'. We can see this uneven productivity from the difference between German workers and those in peripheral European countries as well as the difference between manufacture workers in the U.S. and those in emerging countries.
- The relatively decline of K-12 education quality in the U.S., especially in science and technology, makes it more and more difficult for the country to be competitive in manufacturing and producing high tech goods.
It takes time to correct structural problems as it requires fundamental changes in policies, improvements in productive investments (such as infrastructure upgrade), a better trained current work force and a future generation that is better equipped in science and technology. All this will take time.
In such an environment, it is key to have asset allocation in place for one's retirement investment portfolios.
For more information on the trends of major asset classes, please see Asset Class Trend Watch.
Assets Class Symbols 09/07
Trend
Score08/31
Trend
ScoreDirection Gold GLD 18.12% 21.04% v Commodities DBC 6.68% 7.67% v Intermediate Treasuries IEF 6.67% 6.1% ^ Emerging Mkt Bonds PCY 3.76% 3.1% ^ US Equity REITs VNQ 3.6% 3.21% ^ International Treasury Bonds BWX 3.32% 4.3% v US Credit Bonds CFT 3.01% 2.34% ^ Total US Bonds BND 2.69% 2.67% ^ Municipal Bonds MUB 2.57% 3.85% v Mortgage Back Bonds MBB 2.02% 2.29% v US High Yield Bonds JNK 0.96% 1.55% v US Stocks VTI 0.68% 0.61% ^ International REITs RWX 0.28% 0.96% v Treasury Bills SHV 0.02% 0.03% v Emerging Market Stks VWO -0.66% -1.51% ^ Frontier Market Stks FRN -0.79% -0.44% v International Developed Stks EFA -4.99% -3.33% v 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 Sep 7, 2011)Performance table (as of Sep 7, 2011)
Portfolio Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe Facebook 401k Tactical Asset Allocation Moderate 6% 56% 11% 100% 11% 93% Facebook 401k Strategic Asset Allocation Moderate 4% 22% 5% 22% 5% 23% Four Core Asset Index Funds REITs Tactical Asset Allocation Moderate 8% 75% 9% 81% 8% 70% Four Core Asset Index Funds REITs Strategic Asset Allocation Moderate 7% 44% 4% 18% 4% 13% All model portfolios have out performed S&P 500 (VFINX, SPX) and balanced fund index (VBINX).
Currently Commodities, International Bonds and Fixed Income are doing well. Only Fixed Income is available to Facebook 401k participants. On the other hand, REITs as an asset class is relatively strong in the current low yield environment. Facebook 401K allows REITs exposure.
To summarize, participants adopting Facebook 401k plan can achieve reasonable investment returns by adopting asset allocation strategies that are tailored to their risk profiles. Diversification and proper risk management are the two major key factors in 401k investing.
Symbols: SPX, PTTRX, COMP, SPY, VTI, BDN, AGG, IYR, 401K Investments, Retirement Investing, Portfolio Management, Asset Allocation, Risk Management
- Global Media Giant News Corp Should Extend Diversified Offerings in Its 401K Plan
07/16/2011
News Corporation (NWS) (NWSA) operates as a diversified media company worldwide. News Corp has news and entertainment offerings in the United States, Latin America, Europe, and Asia. News Corp owns Fox News, Dow Jones (Wall Street News and Barron's), along with other major newspaper, TV and film properties. News Corporation was founded in 1922 and is based in New York, New York. It is a global news media giant.
News America (News Corp) 401k Savings Plan, like any other work place retirement plans, offers a limited choice of mutual funds for its plan participants. The plan consists of six funds. These funds enable participants to gain exposure to 3 major assets: US Equity, Foreign Equity, Fixed Income.
Asset Class Ticker Name MID-CAP VALUE HMVYX Hartford Mid Cap Value Y SMALL VALUE PVADX Allianz NFJ Small Cap Value Admin Intermediate-Term Bond PTTRX PIMCO Total Return Instl Foreign Large Blend SCINX DWS International S LARGE BLEND FUSEX Fidelity Spartan U.S. Equity Index Inv WORLD STOCK TGADX Templeton Growth Adv As of Jul 13, 2011, this plan investment choice is rated as averagebased 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 poor (4%)
Fund Quality -- Rated as average (56%)
Portfolio Building -- Rated as average (55%)
Overall Rating: average (40%)The plan has a poor diversification rating as it lacks of emerging market stocks and Real Estate Investment Trusts (REITs) coverage. Three out of six funds are U.S. small cap value, mid cap value and large cap blend stock funds. These are more or less value tilted, missing some of other important styles such as growth. In fixed income asset, it has one PIMCO total return bond fund, managed by famed bond manager Bill Gross. Though this fund is considered to be one of the best bond funds, it is desirable to offer some other bond funds such as inflation protected funds.
The lack of diversification does show its dificiency: Currently Real Estate, US Equity and Commodities are doing well. Only US Equity is available to News America (News Corp) 401k Savings Plan participants. The following are the trend scores of major asset classes.
Assets Class Symbols 07/15
Trend
Score07/08
Trend
ScoreDirection Gold GLD 12.76% 9.67% ^ US Equity REITs VNQ 10.85% 14.72% v Commodities DBC 10.36% 8.61% ^ US Stocks VTI 6.98% 9.37% v International REITs RWX 6.67% 8.75% v US High Yield Bonds JNK 4.69% 5.3% v Emerging Market Stks VWO 4.11% 5.79% v Municipal Bonds MUB 3.74% 2.44% ^ International Treasury Bonds BWX 3.61% 4.84% v Intermediate Treasuries IEF 3.48% 3.48% v International Developed Stks EFA 3.25% 6.09% v Emerging Mkt Bonds PCY 2.93% 3.26% v US Credit Bonds CFT 2.56% 2.82% v Frontier Market Stks FRN 2.48% 4.49% v Total US Bonds BND 2.0% 2.12% v Mortgage Back Bonds MBB 1.61% 1.63% v Treasury Bills SHV 0.04% 0.03% ^ Portfolio Building
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 3 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
Fixed Income: AGG or BND
Performance chart (as of Jul 13, 2011)Performance table (as of Jul 13, 2011)
Portfolio Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe News America (News Corp) 401k Savings Plan Tactical Asset Allocation Moderate 13% 179% 10% 105% 9% 94% News America (News Corp) 401k Savings Plan Strategic Asset Allocation Moderate 13% 218% 7% 53% 6% 47% Three Core Asset ETF Benchmark Tactical Asset Allocation Moderate 6% 89% 3% 42% 5% 44% Three Core Asset ETF Benchmark Strategic Asset Allocation Moderate 17% 186% 5% 26% 5% 24% To summarize, News Corp's 401K plan, unlike its sponsor company's global and diversified reach, can be extended to allow its participants to have exposures in other assets such as emerging market stocks (EEM) (VWO) and REITs (IYR) (VNQ). Experienced participants can also consider choosing its self-directed brokerage option which has more diversified fund choices.
Symbols: NWS, EEM, VWO, IYR, VNQ, PTTRX, Retirement Investing, 401K
Exchange Tickers: (NWSA), (NWS), (EEM), (VWO), (IYR), (VNQ), (PTTRX)Disclaimer: 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.
- H&R Block Can Use Its Financial Prowess to Help Its Own 401K Plan
06/24/2011
Retirement investing is a long term process. This report reviews H&R Block Retirement Savings Plan. We will discuss the investment choices and present the plan rating by MyPlanIQ. Asset allocation portfolios and their performance are presented.
Plan Review and Rating
H&R Block, Inc. (HRB), through its subsidiaries, provides tax preparation, retail banking, and various business advisory and consulting services. It operates in three segments: Tax Services, Business Services, and Corporate.
H&R Block Retirement Savings Plan's 401K plan consists of 21 funds. These funds enable participants to gain exposure to 3 major assets: US Equity, Foreign Equity, Fixed Income.
Asset Class Ticker Name Foreign Large Blend RERFX American Funds EuroPacific Gr R5 LARGE GROWTH RGAFX American Funds Growth Fund of Amer R5 LARGE VALUE DODGX Dodge & Cox Stock Target Date 2000-2010 FFFBX Fidelity Freedom 2000 Target Date 2000-2010 FFFVX Fidelity Freedom 2005 Target Date 2000-2010 FFFCX Fidelity Freedom 2010 Target Date 2011-2015 FFVFX Fidelity Freedom 2015 Target Date 2016-2020 FFFDX Fidelity Freedom 2020 Target Date 2021-2025 FFTWX Fidelity Freedom 2025 Target Date 2026-2030 FFFEX Fidelity Freedom 2030 Target Date 2031-2035 FFTHX Fidelity Freedom 2035 Target Date 2036-2040 FFFFX Fidelity Freedom 2040 Target Date 2041-2045 FFFGX Fidelity Freedom 2045 Target Date 2050+ FFFHX Fidelity Freedom 2050 Retirement Income FFFAX Fidelity Freedom Income SMALL BLEND HASCX Harbor Small Cap Value Instl Intermediate-Term Bond PTTRX PIMCO Total Return Instl Mid-Cap Growth VMGRX Vanguard Mid Cap Growth LARGE BLEND VINIX Vanguard Institutional Index Moderate Allocation VWELX Vanguard Wellington SHORT GOVERNMENT STABLEVALUE STABLEVALUE As of Jun 23, 2011, this plan investment choice is rated as 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 poor (10%)
Fund Quality -- Rated as great (87%)
Portfolio Building -- Rated as below average (31%)
Overall Rating: average (41%)The plan is clearly a traditional U.S. and developed country centric plan. Important asset classes such as emerging market stocks(EEM) and REITs (IYR) are missing. This plan is rated very high in its fund quality ranking but lags dramatically in terms of diversification.
Portfolio Building
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 3 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
Fixed Income: AGG or BND
Performance chart (as of Jun 23, 2011)Performance table (as of Jun 23, 2011)
Portfolio Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe H&R Block Retirement Savings Plan Tactical Asset Allocation Moderate 9% 66% 7% 73% 8% 82% H&R Block Retirement Savings Plan Strategic Asset Allocation Moderate 11% 128% 5% 28% 6% 43% Three Core Asset ETF Benchmark Tactical Asset Allocation Moderate 4% 22% 3% 23% 4% 38% Three Core Asset ETF Benchmark Strategic Asset Allocation Moderate 17% 126% 4% 12% 5% 20% Again, because of its low cost and high quality fund choices, the plan's strategic asset allocaiton portfolio outperforms the standard three asset class portfolio.
To summarize, with the global economy being well developed and more balanced, we would expect H&R Block can use its financial savvy (that they use to help their customers in their personal finance) to improve their own 401k plan offering. Adding funds to enable exposures in emerging markets and alternative investments such as Real Estate Investment Trusts (REITs) is a good direction to pursue.
Symbols: HRB, VTI, VEU, BND, RERFX, RGAFX, DODGX, PTTRX, VWELX, 401k
Exchange Tickers: (HRB), (STABLEVALUE), (VTI), (VEU), (BND), (RERFX), (RGAFX), (DODGX), (FFFBX), (FFFVX), (FFFCX), (FFVFX), (FFFDX), (FFTWX), (FFFEX), (FFTHX), (FFFFX), (FFFGX), (FFFHX), (FFFAX), (HASCX), (PTTRX), (VMGRX), (VINIX), (VWELX) - Adobe Systems 401K Can Benefit from More Diversified Funds in Emerging Market Stocks and REITs
06/22/2011
- High Quality Funds in Oracle 401K Plan Boost Portfolio Returns
06/13/2011
- How Are Morningstar's Best Bond Fund Managers Faring in These Trying Times
04/29/2011
- Smart U.S. Money Managers Dumped Long Term Treasury Bonds, Who Are Holding The Bag?
04/04/2011
- Accenture 401K Retirement Plan: High Quality and Low Cost Funds with Proper Diversification
03/25/2011
- Jabil Enables Its Employees to Access to Reasonable Funds in Their 401K Plan
03/23/2011
- Swensen Six Asset Lazy Portfolio Review Exhibits Different Q1 Behavior
03/19/2011
- Morningstar's 401K Clone Begs the Question- What about Managed Funds?
02/27/2011
- Morningstar's Conservative Retiree Portfolio Relies Heavily On Bonds -- Needs Management Help
02/18/2011
- Ford Motor 401K Report On 06/01/2011
06/01/2011
This report reviews Ford Motor 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 participants in Ford Motor 401K can achieve reasonable investment results using asset allocation strategies.
Plan Review and Rating
Ford Motor Company (Ticker: F) designs, develops, manufactures, and services cars and trucks worldwide. It operates in two sectors, Automotive and Financial Services. Ford Motor Company was founded in 1903 and is based in Dearborn, Michigan. Ford is one of the pioneers in automobile industry.
7/1/2010: The available funds are updated based on a user's input (thank you).
Ford Motor 401K's 401K plan consists of 24 funds. These funds enable participants to gain exposure to 4 major assets: US Equity, Foreign Equity, REITs, Fixed Income. The list of minor asset classes covered:
Foreign Large Blend: EFA, VEU, GWL, PFA
Foreign Small/mid Growth: IFSM, VSS, SCHC
Global Real Estate: IFGL, RWX
Inflation-protected Bond: TIP
Intermediate-term Bond: AGG, CIU, BIV, BND
Large Blend: IVV, IYY, IWV, VTI, VV, SPY, DLN, RSP, SCHX
Large Growth: IVW, IWZ, JKE, VUG, ELG, QQQQ, RPG, SCHG
Mid-cap Blend: IJH, IWR, JKG, VO, MDY, EMM, PJG, DON, EZM, MVV
Retirement Income:
Small Blend: IJR, IWM, JKJ, VB, DSC, PJM, DES, SAA, UWM, SCHA
Target Date 2016-2020: TZG
Target Date 2026-2030: TZL
Target Date 2036-2040: TZV
Target Date 2050+:
World Stock: IOO, VT
As of May 27, 2011, this plan investment choice is rated as 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 above average (77%)
Fund Quality -- Rated as average (55%)
Portfolio Building -- Rated as average (50%)
Overall Rating: average (59%)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 Ford Motor 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.
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 May 27, 2011)Performance table (as of May 27, 2011)
Portfolio Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe Ford Motors 401K Tactical Asset Allocation Moderate 13% 128% 9% 91% 10% 90% Ford Motors 401K Strategic Asset Allocation Moderate 17% 174% 4% 21% 6% 30% Four Core Asset Index Funds REITs Tactical Asset Allocation Moderate 10% 88% 8% 81% 10% 85% Four Core Asset Index Funds REITs Strategic Asset Allocation Moderate 17% 158% 4% 19% 6% 24% Currently are doing well. But these asset classes are not available to Ford Motor 401K participants.
To summarize, Ford Motor 401K plan participants can achieve reasonable investment returns by adopting asset allocation strategies that are tailored to their risk profiles.
Symbols:FORD, EFA, TIP, CASH, STLAX, STLBX, STLCX, STLDX, STLEX, STLFX, VIIIX, FCNTX, FDGRX, VIEIX, NBGIX, RLPIX, IRGTX, PRIDX, VTWSX, VBMFX, PTTRX, VTSMX, VGTSX, VGSIX
Exchange Tickers: (FORD), (EFA), (TIP), (CASH), (STLAX), (STLBX), (STLCX), (STLDX), (STLEX), (STLFX), (VIIIX), (FCNTX), (FDGRX), (VIEIX), (NBGIX), (RLPIX), (IRGTX), (PRIDX), (VTWSX), (VBMFX), (PTTRX), (VTSMX), (VGTSX), (VGSIX) - Oracle Corporation 401(k) Savings and Investment Plan Report On 06/13/2011
06/13/2011
- Adobe Systems Inc 401K Retirement Savings Plan Report On 06222011
06/22/2011