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Articles on VIEIX

  • 401K Investments: Alcoa Savings Plan Review

    10/11/2011

    Retirement investing is a long term process. This report reviews Alcoa Inc Savings Plan MTIA 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 Alcoa Inc Savings Plan MTIA can achieve reasonable investment results using portfolio management and risk management strategies for their 401k investments.

    Plan Review and Rating

    Alcoa, Inc. engages in the production and management of aluminum, fabricated aluminum, and alumina. The company is the largest aluminum provider in the world. Alcoa, Inc. was founded in 1888 and is based in New York, New York.

    Alcoa Inc Savings Plan MTIA's 401K plan consists of 13 funds. These funds enable participants to gain exposure to 4 major assets: US Equity, Foreign Equity, Emerging Market Equity, Fixed Income.

     

    Asset Class Ticker Name
    LARGE GROWTH RAFCX American Funds AMCAP R3
    Moderate Allocation RLBFX American Funds American Balanced R5
    LARGE BLEND RICFX American Funds Invmt Co of Amer R5
    DIVERSIFIED EMERGING MKTS MGEMX Morgan Stanley Inst Emerging Mkts I
    WORLD STOCK RNPFX American Funds New Perspective R5
    Foreign Large Growth PRITX T. Rowe Price International Stock
    SMALL BLEND PASSX T. Rowe Price Small-Cap Stock Adv
    Moderate Allocation VGSTX Vanguard STAR Inv
    LARGE BLEND VITPX Vanguard Instl Ttl Stk Mkt Idx Instl Pls
    Intermediate-Term Bond VBMFX Vanguard Total Bond Market Index Inv
    MID-CAP BLEND VIEIX Vanguard Extended Market Idx Instl
    Small Growth MMCIX BNY Mellon Small/Mid Cap Inv
    Foreign Large Value MPITX BNY Mellon International M

    As of Oct 10, 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 average (51%)
    Fund Quality -- Rated as average (45%)
    Portfolio Building -- Rated as above average (81%)
    Overall Rating: average (61%)

    On stock/equity side, it offers various styles (large, mid and small cap) stock funds. Some of those funds are of high quality (such as American Funds AMCAP R3). An excellent moderate allocation fund American Funds American Balanced R5 is available for anyone who prefers using one stop shop fund.

    On fixed income (bond) side, Alcoa's plan offers only one Vanguard total bond index fund (VBMFX) for its plan participants. This is an area that can be expanded.

    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 proper asset allocation in place for one's retirement investment portfolios.

    Asset Class Trends

    The following table shows how major asset classes such as US equity (stocks), foreign equity, emerging market equity, Real Estate Investment Trusts (REITs), commodities and fixed income (bonds) are ranked based on their price momentum.

    Assets Class Symbols 10/10
    Trend
    Score
    10/03
    Trend
    Score
    Direction
    Gold GLD 7.88% 8.29% v
    Intermediate Treasuries IEF 3.76% 7.81% v
    Municipal Bonds MUB 2.29% 3.67% v
    Total US Bonds BND 2.05% 3.57% v
    Mortgage Back Bonds MBB 1.45% 2.43% v
    US Credit Bonds CFT 1.4% 2.41% v
    International Treasury Bonds BWX 0.87% -1.35% ^
    Treasury Bills SHV 0.05% 0.01% ^
    Emerging Mkt Bonds PCY -0.27% -0.92% ^
    US Stocks VTI -0.74% -10.36% ^
    US High Yield Bonds JNK -0.86% -5.7% ^
    US Equity REITs VNQ -3.32% -11.9% ^
    Commodities DBC -3.68% -8.09% ^
    International Developed Stks EFA -4.28% -14.26% ^
    International REITs RWX -5.45% -13.89% ^
    Emerging Market Stks VWO -10.26% -20.42% ^
    Frontier Market Stks FRN -10.66% -19.69% ^

    For more information on the trends of major asset classes, please see Asset Class Trend Watch

     

    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
    Emerging Market Equity: EEM or VWO
    Fixed Income: AGG or BND

    Performance chart (as of Oct 10, 2011)

    Performance table (as of Oct 10, 2011)

    Currently Fixed Income, Cash and International Bonds are doing well. Only one fixed income bond fund VBMFX is available to Alcoa Inc Savings Plan MTIA participants.

    To summarize, participants adopting Alcoa Inc Savings Plan MTIA 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: AA, SPX, COMP, VTI, VEU, VWO, BND, RAFCX, RLBFX, RICFX, MGEMX, RNPFX, PRITX, PASSX, VGSTX, VITPX, VBMFX, VIEIX, MMCIX, MPITX, 401K Investments, Portfolio Management, Retirement Investing

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  • 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)

    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

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