Top Plans for Brokerages
Vanguard ETF: 7.4%*
Diversified Core: 8.1%*
Six Core Asset ETFs: 7.3%*
*:5 Yr Annualized Return of TAA Moderate Portfolio

...More Plans...

Articles on VIPSX

  • 403B Investments: University of California Retirement Savings Program Review

    09/16/2011

     

    University of California systems is the largest public university system in the nation. It provides its faculties and staff 457(b) deferred compensation, defined contribution and 403(b) tax deferred plans with UC Core Funds and a set of supplemental low cost funds from Vanguard, Dimensional Funds and Dreyfus. Please refer to its annual report of June 2010 for more information.

    This report reviews University of California Retirement Savings Program plan. We discuss its investment options and presents the plan rating by MyPlanIQ. Asset allocation investment portfolios are examined. We then show how plan participants in University of California Retirement Savings Program can achieve reasonable investment results using portfolio management and risk management strategies for their 401k investments.

    We form University of California Retirement Savings Program using funds reported in the annual report. UC Core funds are represented by corresponding Vanguard index funds as proxies.

    The plan consists of 15 funds. These funds enable participants to gain exposure to 5 major assets: US Equity, Foreign Equity, REITs, Emerging Market Equity, Fixed Income.

     

    Asset Class Ticker Name
    SMALL BLEND VSMAX Vanguard Small Cap Index Adm
    DIVERSIFIED EMERGING MKTS DFEMX DFA Emerging Markets I
    REAL ESTATE VGSLX Vanguard REIT Index Adm
    LARGE GROWTH VFTSX Vanguard FTSE Social Index Inv
    ROOT CASH CASH
    Short-Term Bond VBISX Vanguard Short-Term Bond Index Inv
    Intermediate-Term Bond VBTLX Vanguard Total Bond Market Index Adm
    SHORT GOVERNMENT STABLEVALUE STABLEVALUE
    LARGE BLEND IWV iShares Russell 3000 Index
    LARGE BLEND VFINX Vanguard 500 Index Investor
    Foreign Large Blend EFA iShares MSCI EAFE Index
    Inflation-Protected Bond VIPSX Vanguard Inflation-Protected Secs Inv
    Moderate Allocation CFUNX C/Funds:C/Fund

    As of Sep 15, 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 (84%)
    Fund Quality -- Rated as below average (24%)
    Portfolio Building -- Rated as above average (78%)
    Overall Rating: average (64%)

    The plan has a good diversification score as it covers the five major asset classes. In the US stock asset class, it has small and large cap style funds. All of these are low cost index funds.

    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 Sep 15, 2011)

    Performance table (as of Sep 15, 2011)

    In the last 5 year time span, the UC Plan beats the SIB 5 core portfolios in both strategic and tactical asset allocation categories. This indicates that extra minor asset classes (such as small/large cap) do provide additional opportunities for better portfolio management and risk management.

    To summarize, participants in University of California Retirement Savings Program 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 retirement investments (in this case, 403b investments).

    Symbols: SPX, QQQQ, IWV, EFA, VTI, VEU, VWO, VNQ, BND, VSMAX, DFEMX, VGSLX, VFTSX, VBISX, VBTLX, VFINX, VIPSX, CFUNX, FSLBX, Retirement Investments, 403b Investments, Portfolio Management, Risk Management

    comments(0)  Share/Bookmark

  • Goldman Sachs Brings Asset Allocation Savvy to Its 401K Plan

    06/03/2011

    Retirement investing is a long term process. This report reviews The Goldman Sachs 401(k) 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 The Goldman Sachs 401(k) Plan can achieve reasonable investment results using asset allocation strategies.

    Plan Review and Rating

    As one of the largest investment banks in the world, Goldman Sachs (GS) does give its employees ample diversification opportunities. The plan consists of 36 funds. These funds enable participants to gain exposure to 6 major assets: US Equity, Foreign Equity, Commodity, Emerging Market Equity, REITs, Fixed Income.

    As of Jun 2, 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 great (100%) 
    Fund Quality -- Rated as below average (14%) 
    Portfolio Building -- Rated as average (52%) 
    Overall Rating: average (55%)

    It is a bit surprising that the plan's fund quality is rated below average. In the plan, other than the low cost index funds, it provides many Goldman Sachs funds such as Goldman Sachs Asset Management L.P./Structured US Equity Fund (GSELX). This could possibly help your own fund business with the expense of lower qualities. We don't know what cost the plan is charged for these funds. 

    Current Economic and Market Conditions

    As we are clearly entering a seasonally weak period for risk assets, global economies have clearly slowed down. Recently released Case-Shiller housing index showed that the U.S. is now in a double dip state for housing prices. Unemployment rate has been stuck at 9% level. Additional indicators such as conference board consumer confidence index and Chicago ISM index are all pointing to a slow down in the summer season.

    Amid a string of bad economic news, risk assets have come down a bit, though they are still ranked high at the moment. Long term treasury bonds, however, have shot up in the anticipation of weakened economy. The following table shows the major asset class ranking in terms of their momentum.

     

     

    Assets ClassSymbols05/27
    Trend
    Score
    05/20
    Trend
    Score
    Direction
    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 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 
    Foreign Equity: EFA or VEU 
    Commodity: DBC 
    Emerging Market Equity: EEM or VWO 
    REITs: IYR or VNQ or ICF 
    Fixed Income: AGG or BND 

    Performance chart (as of Jun 2, 2011)

    Performance table (as of Jun 2, 2011)

     

    Portfolio Name1Yr AR1Yr Sharpe3Yr AR3Yr Sharpe5Yr AR5Yr Sharpe
    The Goldman Sachs 401(k) Plan Tactical Asset Allocation Moderate 12% 113% 9% 70% 13% 98%
    The Goldman Sachs 401(k) Plan Strategic Asset Allocation Moderate 17% 214% 1% 5% 5% 30%
    Six Core Asset ETF Benchmark Tactical Asset Allocation Moderate 14% 141% 8% 64% 13% 92%
    Six Core Asset ETF Benchmark Strategic Asset Allocation Moderate 20% 188% 3% 16% 7% 36%

    From the above table, one can see that the plan is comparable with six core asset benchmark. 

    To summarize, participants in The Goldman Sachs 401(k) Plan can achieve very reasonable investment returns by adopting asset allocation strategies that are tailored to their risk profiles. This plan provides adquate diversification but can be improved by working on fund qualities. 

    Symbols: GS, ^RUT, MLM, VTI, VEU, VWO, VNQ, DBC, BND, STLEX, SVSPX, VUSTX, VIGIX, VIVIX, VIMSX, SSEMX, VIPSX, STLAX, STLBX, WFBIX, STLCX, STLDX, STLFX, GMCFX, GSTGX, WACPX, GSELX, GCMAX, GSHTX, GSCGX, GSLAX, GSFIX, GGOIX, GREIX, QRAAX, PIGLX, SVRIX Exchange Tickers: (GS), (^RUT), (CASH), (MLM), (VTI), (VEU), (VWO), (VNQ), (DBC), (BND), (STLEX), (SVSPX), (VUSTX), (VIGIX), (VIVIX), (VIMSX), (SSEMX), (VIPSX), (STLAX), (STLBX), (WFBIX), (STLCX), (STLDX), (STLFX), (GMCFX), (GSTGX), (WACPX), (GSELX), (GCMAX), (GSHTX), (GSCGX), (GSLAX), (GSFIX), (GGOIX), (GREIX), (QRAAX), (PIGLX), (SVRIX)

     

    comments(0)  Share/Bookmark

  • 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)

    comments(0)  Share/Bookmark

  • 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)

    comments(0)  Share/Bookmark

  • UPS, Fedex Square off in Retirement Plans

    04/19/2011

    The combination of a robust U.S. equity market and the proliferation of company-sponsored retirement plans helped push total assets in 401(k) pans over the $3 trillion threshold at close of last year, up 13% from 2009. 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.

    The starting point for any retirement investing is the company provided retirement plan. Not all plans are created equal. Not all plans have the same number of choices, asset classes, quality of funds and, most importantly, risk adjusted returns.

    The list of minor asset classes covered by UPS Savings Plan The list of minor asset classes covered by Federal Express (FedEx) 401K Plan for Pilots
    Emerging Markets Bond: BAEDX
    Foreign Large Blend: EFA
    Inflation-protected Bond: BPRAX
    Intermediate-term Bond: SSINX, SBMRX
    Large Blend: SVSPX
    Mid-cap Blend: MDY
    Real Estate: VGSIX
    Retirement Income: VTINX
    Small Blend: IWM
    Target Date 2000-2010: VTENX
    Target Date 2011-2015: VTXVX
    Target Date 2016-2020: VTWNX
    Target Date 2021-2025: VTTVX
    Target Date 2026-2030: VTHRX
    Target Date 2031-2035: VTTHX
    Target Date 2036-2040: VFORX
    Target Date 2041-2045: VTIVX
    Target Date 2050+: VFIFX
    Conservative Allocation: VSCGX
    Foreign Large Blend: VGTSX
    Foreign Large Value: VTRIX
    Inflation-protected Bond: VIPSX
    Intermediate-term Bond: VBTIX
    Large Blend: VIFSX
    Large Value: VWNDX
    Mid-cap Blend: VEMSX, VMISX
    Moderate Allocation: VWELX, VSMGX
    Retirement Income: VTINX
    Small Blend: VSISX
    Target Date 2000-2010: VTENX, VTOVX
    Target Date 2011-2015: VTXVX
    Target Date 2016-2020: VTWNX
    Target Date 2021-2025: VTTVX
    Target Date 2026-2030: VTHRX
    Target Date 2031-2035: VTTHX
    Target Date 2036-2040: VFORX
    Target Date 2041-2045: VTIVX
    Target Date 2050+: VFIFX

     

    Asset Class UPS Savings Plan Federal Express (FedEx) 401K Plan for Pilots
    REITs 1 0
    Balanced Fund 10 14
    Fixed Income 4 2
    Sector Fund 0 0
    Foreign Equity 1 2
    US Equity 3 5
    Other 0
    0
    Total 19 23

     

    Fedex has more funds but have one less asset class -- UPS has REITs and Fedex does not. Neither company provides Emerging Markets or Commodity funds.

    Both companies have a wide choice of Target Date funds which may appeal to some but are expensive and have mixed reviews as to their value for money.

    It is interesting that UPS has emerging market bonds but no emerging ma
    There are easy ways to improve these plans with emerging market and commodity exposure.

    As of Apr 18, 2011, UPS Savings Plan investment choice is rated as average and Federal Express (FedEx) 401K Plan for Pilots 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 UPS Savings Plan Federal Express (FedEx) 401K Plan for Pilots
    Diversification above average (85%) below average (13%)
    Fund Quality below average (21%) average (47%)
    Portfolio Building above average (66%) below average (31%)
    Overall Rating average (58%) below average (31%)

     


    Performance chart (as of Apr 18, 2011)

    Performance table (as of Apr 18, 2011)

    Portfolio Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe
    UPS Savings Plan Tactical Asset Allocation Moderate 10% 77% 10% 102% 10% 98%
    UPS Savings Plan Strategic Asset Allocation Moderate 7% 55% 1% 9% 3% 11%
    Federal Express 401K Plan Tactical Asset Allocation Moderate 4% 39% 7% 73% 7% 69%
    Federal Express 401K Plan Strategic Asset Allocation Moderate 8% 87% 4% 36% 6% 41%
    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%


    Currently Commodities, Real Estate and US Equity are doing well. US Equity and Real Estate available to UPS Savings Plan participants Only US Equities are available to FedEx participants.

    When we add the six asset class SIB benchmark to the table, it is possible to see how the two compare against a reference.

    Takeaways

    • The UPS plan with its extra asset class has a three point lead over the FedEx plan when comparing tactical asset allocation
    • The Six asset class benchmark has a three point lead over the UPS plan when comparing tactical asset allocation
    • The FedEx plan without the recent burden of the Real Estate crash beats UPS when comparing strategic asset allocation
    • The Six asset class benchmark beats the FedEx plan over five years where emerging markets and commodities offset the drag of real estatewhen comparing strategic asset allocation


    With either plan, augmenting a retirement portfolio with emerging market equities and commodities will provide better diversification and likely higher risk adjusted returns. As inflation seems like a near certainty, commodity exposure becomes increasingly important.


    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: UPS, FDX, BAEDX, EFA, BPRAX, SSINX, SBMRX, SVSPX, MDY, VGSIX, VTINX, IWM, VGTSX, VTRIX, VIPSX, VBTIX, VIFSX, VWNDX, VEMSX, VMISX, VWELX, VSMGX, VTINX, VSISX, AGG, BND, VTI, VNQ, IYR, DBC, VWO, EEM, EFA


    Exchange Tickers: (UPS), (FDX), (BAEDX), (EFA), (BPRAX ), (SSINX), (SBMRX), (SVSPX), (MDY), (VGSIX), (VTINX), (IWM), (VGTSX), (VTRIX), (VIPSX), (VBTIX), (VIFSX), (VWNDX), (VEMSX), (VMISX), (VWELX), (VSMGX), (VTINX), (VSISX), (AGG), (BND), (VTI), (VNQ), (IYR), (DBC), (VWO), (EEM), (EFA)

    comments(0)  Share/Bookmark

  • Make inflation a personal fight

    03/25/2011

  • Investing with Styles Can Pay off

    07/09/2010

  • David Swensen's Six Asset Investment Plan

    06/09/2010

First   1   Last  

  • The Goldman Sachs 401(k) Plan Report On 06/03/2011

    06/03/2011

    Retirement investing is a long term process. This report reviews The Goldman Sachs 401(k) 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 The Goldman Sachs 401(k) Plan can achieve reasonable investment results using asset allocation strategies.

    Plan Review and Rating

    As one of the largest investment banks in the world, Goldman Sachs (GS) does give its employees ample diversification opportunities. The plan consists of 36 funds. These funds enable participants to gain exposure to 6 major assets: US Equity, Foreign Equity, Commodity, Emerging Market Equity, REITs, Fixed Income.

    As of Jun 2, 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 great (100%)
    Fund Quality -- Rated as below average (14%)
    Portfolio Building -- Rated as average (52%)
    Overall Rating: average (55%)

    It is a bit surprising that the plan's fund quality is rated below average. In the plan, other than the low cost index funds, it provides many Goldman Sachs funds such as Goldman Sachs Asset Management L.P./Structured US Equity Fund (GSELX). This could possibly help your own fund business with the expense of lower qualities. We don't know what cost the plan is charged for these funds. 

    Current Economic and Market Conditions

    As we are clearly entering a seasonally weak period for risk assets, global economies have clearly slowed down. Recently released Case-Shiller housing index showed that the U.S. is now in a double dip state for housing prices. Unemployment rate has been stuck at 9% level. Additional indicators such as conference board consumer confidence index and Chicago ISM index are all pointing to a slow down in the summer season.

    Amid a string of bad economic news, risk assets have come down a bit, though they are still ranked high at the moment. Long term treasury bonds, however, have shot up in the anticipation of weakened economy. The following table shows the major asset class ranking in terms of their momentum.


    Assets Class Symbols 05/27
    Trend
    Score
    05/20
    Trend
    Score
    Direction
    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 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
    Foreign Equity: EFA or VEU
    Commodity: DBC
    Emerging Market Equity: EEM or VWO
    REITs: IYR or VNQ or ICF
    Fixed Income: AGG or BND

    Performance chart (as of Jun 2, 2011)

    Performance table (as of Jun 2, 2011)

    From the above table, one can see that the plan is comparable with six core asset benchmark. 

    To summarize, participants in The Goldman Sachs 401(k) Plan can achieve very reasonable investment returns by adopting asset allocation strategies that are tailored to their risk profiles. This plan provides adquate diversification but can be improved by working on fund qualities. 

    Symbols:GS, ^RUT, MLM, VTI, VEU, VWO, VNQ, DBC, BND, STLEX, SVSPX, VUSTX, VIGIX, VIVIX, VIMSX, SSEMX, VIPSX, STLAX, STLBX, WFBIX, STLCX, STLDX, STLFX, GMCFX, GSTGX, WACPX, GSELX, GCMAX, GSHTX, GSCGX, GSLAX, GSFIX, GGOIX, GREIX, QRAAX, PIGLX, SVRIX

    Exchange Tickers: (GS), (^RUT), (CASH), (MLM), (VTI), (VEU), (VWO), (VNQ), (DBC), (BND), (STLEX), (SVSPX), (VUSTX), (VIGIX), (VIVIX), (VIMSX), (SSEMX), (VIPSX), (STLAX), (STLBX), (WFBIX), (STLCX), (STLDX), (STLFX), (GMCFX), (GSTGX), (WACPX), (GSELX), (GCMAX), (GSHTX), (GSCGX), (GSLAX), (GSFIX), (GGOIX), (GREIX), (QRAAX), (PIGLX), (SVRIX)

  • Adobe Systems Inc 401K Retirement Savings Plan Report On 06222011

    06/22/2011

Members enjoy Free features

  • Customize and follow a diversified strategic allocation portfolio for your 401k, IRA and brokerage investments within minutes
  • Receive monthly or quarterly re-balance emails
  • Enter funds and percentages in your portfolio, see its historical performance and receive ongoing rebalance emails
  • Real time fund ranking and selection for your plans
  • Quality retirement investing newsletter emails
  • Fund ranking and selection for your plans

Tens of thousands of users have signed up!

Join Now (Free)
No Credit Card Required

User names can only consist of alphabetic and
numeric characters.(eg: 0-9a-zA-Z)
I agree to the Terms of use

Login With Facebook:

Get Started Now. It's Free!

Get portfolio suggestions for your
401k plan or brokerage accounts

Powered by MyPlanIQ
You have created an account on MyPlanIQ.com by using this email "", please login MyPlanIQ account or reset your password.