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Articles on VBR

  • Using Asset Classes in Amerivest Guided Portfolios to Construct ETF Portfolios

    07/22/2011

    We have just released ETF based plan Amerivest Guided Portfolios Based ETF Plan that uses index ETFs to represent the asset classes suggested by the Amerivest balanced portfolio. Based on Amerivest, the model portfolios are suggested by Morningstars.

    One can see the list of ETFs used in this plan from the Investment Options of the plan.

    This plan investment choice is rated as average based on our plan rating methodology that measures the effectiveness of a plan's available investment funds. It has the following detailed ratings:

    Diversification -- Rated as great (94%)
    Fund Quality -- Rated as below average (26%)
    Portfolio Building -- Rated as below average (23%)
    Overall Rating -- Average (45%)

    The performance has been reasonable.

    Portfolio Performance Comparison

    Portfolio/Fund Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe
    VFINX 23% 151% 3% 15% 3% 8%
    Amerivest Guided Portfolios Based ETF Plan Strategic Asset Allocation Moderate 19% 181% 3% 17% 6% 34%
    Amerivest Guided Portfolios Based ETF Plan Tactical Asset Allocation Moderate 14% 125% 7% 44% 11% 76%
    VBINX 16% 203% 6% 32% 5% 28%

    Both SAA and TAA portfolios beat the general S&P 500 (SPX) (VFINX) and the balanced portfolio index (VBINX) in the last 5 years.

    See more detailed comparison from our comparison tool here. Users can change the parameters on that page to compare with other portfolios or funds.

    See the SeekingAlpha article for some detailed description on this plan.

    In general, this is a good plan that has very good diversification. Users can do more comparison and studies on this.

    Symbols: BIV, SPX, BLV, BND, BSV, BWX, DBC, EMB, GWX, IWC, JNK, MBB, TIP, VBK, VBR, VEU, VNQ, VOE, VOT, VTI, VTV, VUG, VWO, Brokerage Plans

     

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  • REIT and Commodities In Simple Six Fund Portfolio Shows Up Aronson's Lazy Portfolio

    04/20/2011

    The incidents in Japan, the Middle East and even as far back as New Orleans teach us the danger of living on borrowed time, the reactors, the governments the levees keeping things going -- just one more year. The temptation to delay until next time is very seductive until disaster strikes and the cost to repair, dwarfs the cost to prevent. Many working people put off their retirement investing -- just one more year until it becomes a "hair on fire" problem -- which it now is for baby boomers for whom retirement is a near and present danger.

    We continue to examine luminary portfolios to see what we can learn and use to further our investment portfolios.

    Ted Aronson and his AJO Partners manage about $25 billion of institutional assets. Aronson puts his family's taxable money in this well-diversified portfolio of no-load index funds.

    Fund Weight Ticker ETF
    US Equities 40% VFINX, VEXMX, VISGX, VTSMX, VISXX VTI, TMW, VBK, VBR
    International Equity 20% VPACX, VEURX VEA
    Emerging Markets 10% VEIEX EEM
    US Bonds 30% VIPSX, VUSTX, VWEHX TIP, LQD, HYG

    This is a well diversified four asset class portfolio with an aggressive profile. The US equities are broadly diversified. Asia Pacific is put above Europe for developed markets. There is a diversified set of fixed income with VWEHX and VUSTX being relatively high risk. The long term treasury bond has proved to be a good diversifier in recent history -- today all bonds are under pressure so this may be less true.

    The US component is possibly over-weighted and emerging markets could be increased or, even better, some real estate assets could be added.

    This portfolio was last reviewed at the end of the year and we now re-examine performance over the last three months as we see markets changing and inflation becoming more of a present reality.

    This lazy portfolio will be compared with six asset class SIB to examine the returns of four and six asset class portfolios


    Portfolio Performance Comparison

    Portfolio/Fund Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe
    Aronson Original
    6% 74% 2% 14% 3% 16%
    Six Core Asset ETF Benchmark Tactical Asset Allocation Moderate
    10% 71% 9% 73% 13% 91%
    Six Core Asset ETF Benchmark Strategic Asset Allocation Moderate
    13% 103% 3% 20% 7% 35%

    full comparison

    The Aronson portfolio has four asset classes missing out on REIT and commodities. The performance over the last five years has not been exceptional with the Simple SIB able to beat it across the board.

    Over the last three months, REIT and commodities have been in favor and having neither has had an impact on the Aronson returns.

    Takeaways
    • The Aronson lazy portfolio has moderate returns that can be beaten
    • Having broader diversification pays off as market conditions change
    • ETFs can readily be used to implement these portfolios with good performance
    • A 10% spread over five years means that it’s worth looking at alternatives
    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.
    The incidents in Japan, the Middle East and even as far back as New Orleans teach us the danger of living on borrowed time, the reactors, the governments the levees keeping things going -- just one more year. The temptation to delay until next time is very seductive until disaster strikes and the cost to repair, dwarfs the cost to prevent. Many working people put off their retirement investing -- just one more year until it becomes a "hair on fire" problem -- which it now is for baby boomers for whom retirement is a near and present danger.

     
    Exchange Tickers:  (NYSE: VFINX), (NYSE: VEXMX), (NYSE: VISGX), (NYSE: VTSMX), (NYSE: VISXX), (NYSE: VTI), (NYSE: TMW), (NYSE: VBK), (NYSE: VBR), (NYSE: VPACX), (NYSE: VEURX), (NYSE: VEA), (NYSE: VEIEX), (NYSE: EEM), (NYSE: VIPSX), (NYSE: VUSTX), (NYSE: VWEHX), (NYSE: TIP), (NYSE: LQD), (NYSE: HYG)

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  • REIT and Commodities In Simple Six Fund Portfolio Shows Up Aronson's Lazy Portfolio

    04/19/2011

    The incidents in Japan, the Middle East and even as far back as New Orleans teach us the danger of living on borrowed time, the reactors, the governments the levees keeping things going -- just one more year. The temptation to delay until next time is very seductive until disaster strikes and the cost to repair, dwarfs the cost to prevent. Many working people put off their retirement investing -- just one more year until it becomes a "hair on fire" problem -- which it now is for baby boomers for whom retirement is a near and present danger.

    We continue to examine luminary portfolios to see what we can learn and use to further our investment portfolios.

    Ted Aronson and his AJO Partners manage about $25 billion of institutional assets. Aronson puts his family's taxable money in this well-diversified portfolio of no-load index funds.

    Fund Weight Ticker ETF
    US Equities 40% VFINX, VEXMX, VISGX, VTSMX, VISXX VTI, TMW, VBK, VBR
    International Equity 20% VPACX, VEURX VEA
    Emerging Markets 10% VEIEX EEM
    US Bonds 30% VIPSX, VUSTX, VWEHX TIP, LQD, HYG

    This is a well diversified four asset class portfolio with an aggressive profile. The US equities are broadly diversified. Asia Pacific is put above Europe for developed markets. There is a diversified set of fixed income with VWEHX and VUSTX being relatively high risk. The long term treasury bond has proved to be a good diversifier in recent history -- today all bonds are under pressure so this may be less true.

    The US component is possibly over-weighted and emerging markets could be increased or, even better, some real estate assets could be added.

    This portfolio was last reviewed at the end of the year and we now re-examine performance over the last three months as we see markets changing and inflation becoming more of a present reality.

    This lazy portfolio will be compared with six asset class SIB to examine the returns of four and six asset class portfolios


    Portfolio Performance Comparison

    Portfolio/Fund Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe
    Aronson Original
    6% 74% 2% 14% 3% 16%
    Six Core Asset ETF Benchmark Tactical Asset Allocation Moderate
    10% 71% 9% 73% 13% 91%
    Six Core Asset ETF Benchmark Strategic Asset Allocation Moderate
    13% 103% 3% 20% 7% 35%

    full comparison

    The Aronson portfolio has four asset classes missing out on REIT and commodities. The performance over the last five years has not been exceptional with the Simple SIB able to beat it across the board.

    Over the last three months, REIT and commodities have been in favor and having neither has had an impact on the Aronson returns.

    Takeaways
    • The Aronson lazy portfolio has moderate returns that can be beaten
    • Having broader diversification pays off as market conditions change
    • ETFs can readily be used to implement these portfolios with good performance
    • A 10% spread over five years means that it’s worth looking at alternatives
    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.
    The incidents in Japan, the Middle East and even as far back as New Orleans teach us the danger of living on borrowed time, the reactors, the governments the levees keeping things going -- just one more year. The temptation to delay until next time is very seductive until disaster strikes and the cost to repair, dwarfs the cost to prevent. Many working people put off their retirement investing -- just one more year until it becomes a "hair on fire" problem -- which it now is for baby boomers for whom retirement is a near and present danger.

     

    Exchange Tickers:  (NYSE: VFINX), (NYSE: VEXMX), (NYSE: VISGX), (NYSE: VTSMX), (NYSE: VISXX), (NYSE: VTI), (NYSE: TMW), (NYSE: VBK), (NYSE: VBR), (NYSE: VPACX), (NYSE: VEURX), (NYSE: VEA), (NYSE: VEIEX), (NYSE: EEM), (NYSE: VIPSX), (NYSE: VUSTX), (NYSE: VWEHX), (NYSE: TIP), (NYSE: LQD), (NYSE: HYG)

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  • Bernstein No Brainer and Smart Money Lazy Portfolios Under The Microscope

    04/15/2011

    Retirement investing is now a "hair on fire" problem for Boomers who have no time to waste in getting their portfolios in order. The challenge is how to avoid being overwhelmed with conflicting data and shutting down.

    We present simple approaches to understand the path to higher returns with lower risk.

    Dr. William Bernstein is the author of the "Intelligent Asset Allocator" and "The Four Pillars of Investing." He's also a physician, neurologist and financial adviser to high-net-worth individuals. He has proposed a number of lazy portfolios. There are two that we now examine in the light of a more active benchmark which has monthly instead of annual rebalancing.

    1. The smart money portfolio

    2. The no-brainer portfolio

    The no-brainer portfolio comprises the following fund allocation:

    • 25% in Vanguard 500 Index VFINX (IVW)

    • 25% in Vanguard Small Cap NAESX or VTMSX (VB)

    • 25% in Vanguard Total International VGTSX or VTMGX (EFA, VEA)

    • 25% in Vanguard Total Bond VBMFX or VBISX (BND)

    Things to note about the portfolio:

    • Heavily weighted towards domestic equities

    • Similar to a three asset SIB [simpler-is-better] with domestic, international and fixed income

    • It would be better to have some REIT or emerging markets exposure


    The smart money portfolio comprises the following fund allocation:

    • 40% Vanguard Short Term Investment Grade VFSTX (SCJ, SHY)

    • 15% Vanguard Total Stock Market VTSMX (VTI)

    • 10% Vanguard Small Cap Value VISVX (VBR)

    • 10% Vanguard Value Index VIVAX (VTV)

    • 5% Vanguard Emerging Markets Stock VEIEX (VWO)

    • 5% Vanguard European Stock VEURX (VEU)

    • 5% Vanguard Pacific Stock VPACX (VPL)

    • 5% Vanguard REIT Index VGSIX (RWX, VNQ)

    • 5% Vanguard Small Cap Value NAESX or VTMSX (VB)

    To summarize:

    • 40% in U.S. equities

    • 10% in international equities

    • 5% in emerging market equities

    • 5% in REITs

    • 40% in fixed income


    The smart money portfolio is more conservative and has two more asset classes but they only represent five percent of the portfolio each. With 80% of the portfolio in US and fixed income, it isn't very different from the no brainer portfolio.

    We are going to use the SIB (Simpler Is Better) Portfolio as a benchmark. The SIB comprise – market index funds (ETFs or Mutual Funds) from key asset classes that can be used to measure historical returns to show the impact of asset class selection rather than fund or stock selection. We are going to use a six asset ETF SIBs. This will enable us to see the type of returns we can expect and contrast Mutual Funds and ETFs

    The following funds are used:

    Asset Class Ticker Name
    LARGE BLEND VTI Vanguard Total Stock Market ETF
    Foreign Large Blend VEU Vanguard FTSE All-World ex-US ETF
    DIVERSIFIED EMERGING MKTS VWO Vanguard Emerging Markets Stock ETF
    REAL ESTATE VNQ Vanguard REIT Index ETF
    COMMODITIES BROAD BASKET DBC PowerShares DB Commodity Idx Trking Fund
    Intermediate-Term Bond BND Vanguard Total Bond Market ETF

     

    The strategic asset allocation strategy has 40% in fixed income and 12% in the other five funds.


    The tactical asset allocation strategy has 40% in fixed income and 30% in the top two asset class funds determined by the price momentum -- unless that performance is below fixed income when the money will be diverted to fixed income. If fixed income is performing below cash, the fixed income portion will be cash.

    Portfolio Analysis

    full chart

    Portfolio Performance Comparison

    Portfolio/Fund Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe
    P William Bernstein No Brainer Nine Fund Portfolio Annual Rebalance 8% 79% 4% 20% 4% 21%
    P William Bernstein No Brainer Four Fund Portfolio 11% 87% 4% 18% 5% 19%
    Six Core Asset ETF Benchmark Tactical Asset Allocation Moderate 10% 71% 9% 73% 13% 91%
    Six Core Asset ETF Benchmark Strategic Asset Allocation Moderate 13% 103% 4% 20% 7% 35%

    Takeaways

    • Both Bernstein portfolios perform satisfactorily for a lazy portfolio – it is surprising that the no-brainer performs so well against its more diversified smart-money cousin
    • The Six Asset SIB buy and hold outperforms both Bernstein portfolios based on broader diversification.
    • Tactical Asset Allocation reduces downside risk and that wins in the current uncertain environment

    Symbols: BND, DBC, EFA, IVW, NAESX, RWX, SCJ, SHY, VB, VBR, VEA, VEIEX, VEU, VEURX, VFINX, VFSTX, VGSIX, VISVX, VIVAX, VNQ, VPACX, VPL, VTI, VTMGX, VTMSX, VTSMX, VTV, VWO

    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

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  • Schwab Mutual Funds Beat out ETFs

    04/06/2011

    l

    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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  • ALLERGAN, INC. SAVINGS AND INVESTMENT PLAN Report On 12/03/2010

    12/03/2010

    This report reviews ALLERGAN, INC. SAVINGS AND INVESTMENT 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 ALLERGAN, INC. SAVINGS AND INVESTMENT PLAN can achieve reasonable investment results using asset allocation strategies.

    Plan Review and Rating

    ALLERGAN, INC. SAVINGS AND INVESTMENT PLAN's 401K plan consists of 13 funds. These funds enable participants to gain exposure to 3 major assets: US Equity, Foreign Equity, Fixed Income. The list of minor asset classes covered:

    Foreign Large Blend: EFA, VEU, GWL, PFA
    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
    Moderate Allocation: AOM
    Short Government: SHY, SHV, VGSH, PLK, USY
    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
    World Stock: IOO, VT

    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 (21%)
    Fund Quality -- Rated as (16%)
    Portfolio Building -- Rated as (31%)
    Overall Rating: (24%)

    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 ALLERGAN, INC. SAVINGS AND INVESTMENT 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 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 Dec 2, 2010)

    Performance table (as of Dec 2, 2010)

    Currently, asset classes in US Equity (SPY,VTI), Foreign Equity (EFA,VEU) and Fixed Income (AGG,BND) are doing relatively well. These asset classes are available to ALLERGAN, INC. SAVINGS AND INVESTMENT PLAN participants.

    To summarize, ALLERGAN, INC. SAVINGS AND INVESTMENT PLAN plan participants can achieve reasonable investment returns by adopting asset allocation strategies that are tailored to their risk profiles.

    Symbols: AGN , SPY , VTI , EFA , VEU , AGG , BND , AOM , CIU , BIV , GWL , PFA , IVE , IWW , JKF , VTV , ELV , PWV , RPV , SCHV , IVV , IYY , IWV , VV , DLN , RSP , SCHX , IOO , VT , SHY , SHV , VGSH , PLK , USY , IVW , IWZ , JKE , VUG , ELG , QQQQ , RPG , SCHG , 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

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