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Articles on XLB

  • US Sectors Favor Telecom, Healthcare

    05/10/2011

    The US Economy is divided into various Sectors. Sector are classified as General Segments of the economy within which a large group of companies can be categorized. Overall the US sectors shows good performance last year except for financial companies. The sectors that show substantial growth are energy, material and telecom industries.

     

    Energy (XLE) returns dropped recently due to profit taking. Crude oil prices are currently at their highest level since 2008. The US Energy Information Association (EIA) predicted that oil markets will continue to tighten over the next two years due to slow growth from non-OPEC countries.  Due to these events we expect the drawdown in global petroleum stocks and an increase in production demand from the OPEC countries, another reason for reducing crude oil production is the recent Libya and Middle East conflict which will disrupt the crude oil supply globally. We are expecting good growth in the energy sector as the total demand of oil grows by an annual average of 1.5 million bbl/d in 2011 and 2012.

     

    We believe IYZ will continue to grow slowly this year. Economists and portfolio managers are moving towards technology with demands for new products as well as telecommunications providers with dividends and earnings growth. The returns are not impressive although steady in nature. Worldwide the demand of technology and telecommunication related products are gaining popularity making this sector interesting.

     

    XLV prospects appear bright as there is a surge as the population ages and healthcare expects to double by 2018.

     

    XLF still remain down while the things gradually improve: XLF growth is expected to be meager in 2011 but the things will improve in 2012 – 13.      


    Assets Class Symbols 05/06
    Trend
    Score
    04/29
    Trend
    Score
    Direction
    Telecom IYZ 11.63% 10.44% ^
    Healthcare XLV 10.93% 10.5% ^
    Industries XLI 9.92% 11.4% v
    Energy XLE 9.47% 17.92% v
    Consumer Discretionary XLY 9.37% 9.76% v
    Consumer Staples XLP 8.43% 8.95% v
    Utilities XLU 7.14% 6.48% ^
    Materials XLB 6.91% 10.93% v
    Technology XLK 6.08% 6.94% v
    Financial XLF 1.08% 3.51% v
    The trend score is defined as the average of 1,4,13,26 and 52 week total returns (including dividend reinvested).

     

    Trend Rankings: The trend table ranks each of the ten U.S. industrial iShares ETFs and the score is based on the following formula: for an ETF or index, we use the average of 1, 4, 13, 26 and 52 week total returns (i.e. dividend and distribution reinvested). Notice the average of the total returns would overweight the recent price movement. This is similar to exponential moving average.

     

    One concern: The recovery of the economy will face challenges in upcoming months as they battle huge debt. S&P recently showed concern revising US credit rating. The current administration is making plans to cut the deficit which may lead to austerity programs that could affect the overall momentum of these sectors.

     

    Symbols:  XLY, IYZ, XLI, XLB, XLK, XLE, XLF, XLP, XLU, XLV


    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.

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  • XLE The Clear Sector Leader

    05/03/2011

     

    In a retirement account, Sector investing can be very worthwhile. It can lead to portfolio returns that “beat the market”. Sectors offer a way of focusing, in a disciplined fashion, similar to looking at Countries, or broad markets. At any given point in time, one or more sectors may be out performing other sectors, and the broad stock market. Portfolios that include Sector allocation can capture this performance.

     

    A great way to get sector exposure is through exchange traded funds. Today, there are numerous 'sector' type exchange traded funds that you can invest in. The iShares and the SPDR lineups are probably the two most popular. However there are several other providers that offer unique and interesting sector and industry ETFs.

     

    Below is the Sector performance table, sorted by “Trend Score”, which is also posted at MyPlanIQ - Global Trends .

    US Sectors TrendPerformance data are based on closing prices on April 29th 2011

    Description

    Symbol

    1 Week

    4 Weeks

    13 Weeks

    26 Weeks

    52 Weeks

    Trend Score

    Energy

    XLE

    1.9%

    0.61%

    13.56%

    36.92%

    36.63%

    17.92%

    Industries

    XLI

    2.84%

    1.9%

    8.48%

    21.41%

    22.37%

    11.4%

    Materials

    XLB

    1.04%

    1.74%

    8.45%

    18.79%

    24.64%

    10.93%

    Healthcare

    XLV

    2.89%

    5.89%

    11.99%

    14.16%

    17.58%

    10.5%

    Telecom

    IYZ

    1.95%

    2.63%

    7.69%

    14.23%

    25.69%

    10.44%

    Consumer Discretionary

    XLY

    1.6%

    3.18%

    9.67%

    16.07%

    18.29%

    9.76%

    Consumer Staples

    XLP

    2.01%

    4.82%

    9.38%

    11.14%

    17.39%

    8.95%

    Technology

    XLK

    1.48%

    2.81%

    3.87%

    10.58%

    15.95%

    6.94%

    Utilities

    XLU

    2.85%

    3.24%

    5.8%

    6.83%

    13.65%

    6.48%

    Financial

    XLF

    1.74%

    -0.91%

    1.06%

    13.2%

    2.44%

    3.51%

    The trend score is defined as the average of 1,4,13,26 and 52 week total returns (including dividend reinvested).

     

    With all of the headline news lately, it is no surprise that the Energy Sector ETFs are the strongest. The holdings inside the ETFs usually include the large cap oil companies such as Exxon and Chevron, and, some of the smaller cap companies. When crude oil, and petroleum product prices rise, usually the margins of the oil companies expand. An example could be the cost of production of a barrel of crude stays relatively fixed, as the selling price of the barrel of crude goes higher. Similarly, some of the costs of refining a gallon of gasoline stay relatively fixed, as the selling price of that gallon goes higher.

     

    These energy sector ETFs are definitely on my retirement portfolio watch list this year.

     

    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.

     

    Exchange Tickers: (NYSE:XLE), (NYSE:XLI), (NYSE:XLB), (NYSE:XLV), (NYSE:IYZ), (NYSE:XLY), (NYSE:XLP), (NYSE:XLK), (NYSE:XLU), (NYSE:XLF)

     

    Symbols: XLE, XLI, XLB, XLV, IYZ, XLY, XLP, XLK, XLU, XLF

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  • Schwab Select ETF Plan Has Bright Prospects

    04/06/2011

    Schwab ETF Plan Has Good Pedigree and Bright Prospects Retirement is now a "hair on fire" problem. There is much talk of working longer, downsizing, living on less. However, there is something you can do to help improve your risk adjusted returns. Look at your portfolios and plans to build a diversified portfolio with a systematic investment strategy.

    This is not as hard as you might think -- to highlight this point, we feature a plan created by a non professional that matches up well with any of the other plans. Kevin Carr. is an individual investor who employs a long term strategy. He manages an individual common stock portfolio as well as many plans on MyPlan IQ.  If you have any questions regarding this plan please contact him.

    This plan provides you with Schwab's experts’ top picks of low-cost ETFs representing approximately 50 ETFs, based on rigorous criteria including expenses, tracking error, trading volume, and more.  Schwab ETFs trade commission free.  There are no redemption periods so you can start today and not worry about holding periods.

    We report on this Schwab ETF Select List which consists of 49 funds. These funds give exposure to 6 major assets: US Equity, Commodity, Foreign Equity, REITs, Emerging Market Equity, Fixed Income.

     

    Asset Class Ticker Name
    LARGE BLEND SCHX Schwab U.S. Large-Cap ETF
    LARGE GROWTH SCHG Schwab U.S. Large-Cap Growth ETF
    LARGE VALUE SCHV Schwab U.S. Large-Cap Value ETF
    MID-CAP BLEND VO Vanguard Mid-Cap ETF
    Mid-Cap Growth VOT Vanguard Mid-Cap Growth ETF
    MID-CAP VALUE VOE Vanguard Mid-Cap Value ETF
    SMALL BLEND SCHA Schwab U.S. Small-Cap ETF
    Small Growth VBK Vanguard Small Cap Growth ETF
    SMALL VALUE VBR Vanguard Small Cap Value ETF
    LARGE BLEND SCHB Schwab U.S. Broad Market ETF
    LARGE VALUE VYM Vanguard High Dividend Yield Indx ETF
    Foreign Large Blend SCHF Schwab International Equity ETF
    Foreign Large Growth EFG iShares MSCI EAFE Growth Index
    Foreign Large Value EFV iShares MSCI EAFE Value Index
    FOREIGN SMALL/MID GROWTH SCHC Schwab International Small-Cap Eq ETF
    DIVERSIFIED EMERGING MKTS SCHE Schwab Emerging Markets Equity ETF
    Foreign Large Blend VEU Vanguard FTSE All-World ex-US ETF
    WORLD STOCK VT Vanguard Total World Stock Index ETF
    EUROPE STOCK VGK Vanguard European ETF
    DIVERSIFIED PACIFIC/ASIA VPL Vanguard Pacific Stock ETF
    JAPAN STOCK EWJ iShares MSCI Japan Index
    China Region GXC SPDR S&P China
    Intermediate-Term Bond BND Vanguard Total Bond Market ETF
    SHORT GOVERNMENT SCHO Schwab Short-Term U.S. Treasury ETF
    Intermediate Government SCHR Schwab Intermediate-Term U.S. Trsy ETF
    LONG GOVERNMENT TLH iShares Barclays 10-20 Year Treasury Bd
    Inflation-Protected Bond SCHP Schwab U.S. TIPS ETF
    Intermediate-Term Bond CIU iShares Barclays Intermediate Credit Bd
    High Yield Bond JNK SPDR Barclays Capital High Yield Bond
    WORLD BOND BWX SPDR Barclays Capital Intl Treasury Bond
    Muni National Long MUB iShares S&P National AMT-Free Muni Bd
    Consumer Discretionary XLY Consumer Discret Select Sector SPDR
    Consumer Staples XLP Consumer Staples Select Sector SPDR
    Equity Energy XLE Energy Select Sector SPDR
    Financial XLF Financial Select Sector SPDR
    Health XLV Health Care Select Sector SPDR
    Industrials XLI Industrial Select Sector SPDR
    Natural Resources XLB Materials Select Sector SPDR
    Technology XLK Technology Select Sector SPDR
    Communications IYZ iShares Dow Jones US Telecom
    Utilities XLU Utilities Select Sector SPDR
    COMMODITIES BROAD BASKET DBC PowerShares DB Commodity Index Tracking
    Commodities Agriculture DBA PowerShares DB Agriculture
    Commodities Precious Metals IAU iShares Gold Trust
    Commodities Industrial Metals DBB PowerShares DB Base Metals
    Commodities Energy USL United States 12 Month Oil
    MISCELLANEOUS SECTOR PFF iShares S&P U.S. Preferred Stock Index
    REAL ESTATE VNQ Vanguard REIT Index ETF


     

    Asset Class Number of funds
    Balanced Fund 0
    REITs 1
    Fixed Income 9
    Commodity 5
    Sector Fund 11
    Foreign Equity 8
    Emerging Market Equity 3
    US Equity 11
    Other 1
    Total 49

    Many are looking for access to a well rounded ETF plan through Schwab. This fills this hole and as Schwab makes more of their own funds available, it will be possible to move them into the plan. On this review, the only comment would be to add another REIT choice. The other asset classes have a good number of selections without being overwhelming.

    As of Apr 4, 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 (99%)
    Fund Quality -- Rated as average (47%)
    Portfolio Building -- Rated as average (56%)
    Overall Rating: above average (66%)

    Thehigh diversification score means that all the major and minor asset classes have been ticked. Fund quality is lower because some of the ETF's don't have a long history but that shouldn't impede the ability for the future.

    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 4, 2011)

    Performance table (as of Apr 4, 2011)

    Portfolio Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe
    Schwab ETF Select List Tactical Asset Allocation Moderate 9% 82% 8% 72% 12% 89%
    Schwab ETF Select List Strategic Asset Allocation Moderate 14% 118% 3% 15% 4% 20%
    Six Core Asset ETF Benchmark Tactical Asset Allocation Moderate 9% 81% 10% 82% 13% 89%
    Six Core Asset ETF Benchmark Strategic Asset Allocation Moderate 14% 121% 4% 20% 7% 34%


    This portfolio performs well against the six asset ETF benchmark

    • SAA provides lower volatility while albeit delivering lower historical returns but as more of the newer funds are applied to the portfolio, there will be more opportunity for closing the gap
    • The TAA portfolios run neck and neck over the five year period

    In a future article, we will review performance over the last three months to see how the plan has performed in the light of recent events.

    Kay Takeaways

    • Building a plan of funds is not the preserve of the few -- anybody who has the interest and application to research can provide well constructed plans
    • It is possible to benefit from those individuals while still having transparency and not being captive to any particular broker

    Symbols: SPY, VTI, EFA, VEU, EEM, VWO, IYR, VNQ, ICF, AGG, BND, DBC, HYG, JNK, PHB, CIU, BIV, MUB, TFI, PZA, MLN, GII, PUI, DBU, RYU, UPW, IYH, IXJ, VHT, XBI, PBE, DBR, RYH, EFG, IXP, PTE, DGG, LTL, IYM, IGE, VAW, XLB, XME, PYZ, DBN, RTM, UYM, MTK, PTF, DBT, RYT, ROM, GWL, PFA, IVE, IWW, JKF, VTV, ELV, PWV, RPV, SCHV, EFV, PID, DWM, IYF, VFH, IPF, PFI, DRF, RYF, KXI, VDC, PSL, DPN, RHS, RXI, VCR, IYJ, EXI, VIS, IGOV, BWX, WIP, IVV, IYY, IWV, VV, DLN, RSP, SCHX, IOO, VT, SHY, SHV, VGSH, PLK, USY, TLT, TLH, IEF, EDV, VGLT, TLO, PLW, 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, IFSM, VSS, SCHC, IJS, IWN, JKL, VBR, DSV, PWY, RZV, UVT, IJR, IWM, JKJ, VB, DSC, PJM, DES, SAA, UWM, SCHA, GMM, PXH, DEM, SCHE, ITE, IXC, IPW, DBE, RYE, DKA, IEI, VGIT, IJK, IWP, VOT, EMG, PWJ, RFG, UKW, IJT, IWO, JKK, VBK, DSG, PWT, RZG, UKK, TIP, EPP, VPL, GMF, PAF, EWJ, JPP, PJO, DXJ, GSG

    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.

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  • Schwab ETF Select List Plan Offers Diversification and High Quality Fund Selection

    03/16/2011

    by Kevin Carr, A MyPlanIQ Expert User

    On March 9, 2011, Charles Schwab announced the release of the ETF Select List.  The quarterly Schwab ETF Select List was created by Charles Schwab Investment Advisory, Inc. and is a filtered list of all of the ETFs in the marketplace, highlighting pre-screened, low-cost ETFs.  Schwab used quantitative and qualitative screens to filter each ETF and build the list, covering 6 major asset categories and 45 minor asset categories. All ETFs, including Schwab ETFs, are evaluated using the same criteria and broken into sectors for US Equity, Foreign Equity, Emerging Market Equity, Fixed Income, Commodity and REITs.

    The ETF Select List gives investors a choice of low-cost, pre-screened ETFs.  Schwab highlights just one ETF in each category, chosen based on specific criteria including expense ratio, risk, structure and how well it fits into its category. To make the list, an ETF has to meet minimum criteria that include assets under management, including narrowness of index, trading volume, bid/ask volatility, risk, annualized cost of ownership, fund structure and fit within a given category.  The list excludes exchange-traded notes (ETNs), inverse or leveraged ETFs, actively managed ETFs, and unmanaged baskets of securities.

    While the ETF Select List has only been out a few days, I constructed a plan on MyPlanIQ platform.  The Schwab ETF Select List  has no redemption periods, is commission efficient and offers low expenses. 

    As of March 13, the Schwab ETF Select List Plan has a four star investment menu rating with a 99% diversification score and an overall above average investment choice based on MyPlanIQ Plan Rating methodology .  The Plan Rating methodology is designed to measure how effective a plan’s available funds are using key factors such as diversification, fund quality and portfolio building.

    Attribute   Schwab ETF Select List   Six Core Asset ETF Benchmark
    Diversification   great (99%)   average (63%)
    Fund Quality   above average (70%)   below average (23%)
    Portfolio Building   average (53%)   above average (70%)
    Overall Rating   above average (72%)   average (54%)


    The chart and table below show the historical performance of moderate model portfolios employing strategic and tactical asset allocation strategies (SAA and TAA , both provided by MyPlanIQ). For comparison purpose, we also include the moderate model portfolios of a typical 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 Mar 15, 2011)



    Performance table (as of Mar 15, 2011)

    Currently Commodities, Real Estate and US Equity are doing well. These asset classes are available to Schwab ETF Select List participants.

    To Summarize, Schwab ETF Select List Plan offers wide diversification, high quality funds with low expenses. compared with other brokerage supported ETF plans, it is very favorable. From time to time, we will review the plan.

    Symbols:DBC,DBA,IAU,DBB,USL,PFF,VNQ,XLY,XLP,XLE,XLF,XLV,XLI,XLB,XLK,IYZ,XLU,BND,SCHO,SCHR,TLH,SCHP,CIU,JNK,BWX,MUB,SCHF,EFG,EFV,SCHC,SCHE,VEU,VT,VGK,VPL,EWJ,GXC,SCHX,SCHG,SCHV,VO,VOT,VOE,SCHA,VBK,VBR,SCHB,VYM,

    Symbols (exchange): (DBC),(DBA),(IAU),(DBB),(USL),(PFF),(VNQ),(XLY),(XLP),(XLE),(XLF),(XLV),(XLI),(XLB),(XLK),(IYZ),(XLU),(BND),(SCHO),(SCHR),(TLH),(SCHP),(CIU),(JNK),(BWX),(MUB),(SCHF),(EFG),(EFV),(SCHC),(
    SCHE),(VEU),(VT),(VGK),(VPL),(EWJ),(GXC),(SCHX),(SCHG),(SCHV),(VO),(VOT),(VOE),(SCHA),(VBK),(VBR),(SCHB),(VYM)

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  • Rising Energy Costs: Casting a Cloud over Energy-Dependent Sector ETFs

    01/15/2011

    The relative performance among sector ETFs remained largely unchanged last week, with energy (XLE) retaining its top spot. However, we saw a broad-based drop in trend scores across sectors. Marking a shift in sentiment, consumer discretionary (XLY) dropped to the fourth spot from being second a week ago. By examining the following table, one can gain critical insights into how to build portfolios at the sector level:

    Assets Class

    Symbols

    01/12
    Trend
    Score

    01/05
    Trend
    Score

    Direction

    Energy

    XLE

    16.21%

    14.72%

    ^

    Materials

    XLB

    13.6%

    14.24%

    v

    Industrials

    XLI

    12.87%

    14.01%

    v

    Consumer Discretionary

    XLY

    12.11%

    14.32%

    v

    Technology

    XLK

    9.71%

    10.35%

    v

    Telecom

    IYZ

    8.74%

    13.08%

    v

    Financial

    XLF

    8.08%

    9.88%

    v

    Consumer Staples

    XLP

    5.21%

    6.52%

    v

    Healthcare

    XLV

    4.68%

    5.18%

    v

    Utilities

    XLU

    3.25%

    3.65%

    v

    Fundamentals are improving the in the financial sector (XLF), with industry bellwether J.P. Morgan Chase reporting record-breaking profits on Friday. As credit condition has improved, delinquencies have dropped and lending activities are picking up. The industry is still facing headwinds. Litigations centered on mortgage buyback and still weak housing markets will post pressure on the margins.

    Energy (XLE) was lifted by rising oil prices. Along with the sharp rise in demand for heating oil and naturals gas driven by the severe winter conditions in the Northeast, the closure of the Trans-Alaska pipeline has helped push oil past $91. One may ask the question of whether rising energy costs would post a thread to the economic recovery and how this would affect the dynamics in sectors (e.g. industrials (XLI), consumer (XLY)) that are exposed to the volatile oil market and that require large energy input.

    Some economists have suggested as the U.S. economy becomes more service oriented, with energy costs accounting for less in the overall cost structure of the economy, rising oil prices would have little effect on the overall economy. That said, it’s crucial to recognize that rising energy costs would certainly affect consumer behavior and business spending at least in the short run. Therefore, identifying sectors that would be negatively affected in an event of oil shock is critically important when building a portfolio at the sector level.

    For more detailed total return performance, please see here.


     

     

    labels:investment,

    Symbols:XLY,IYZ,XLI,XLB,XLK,XLE,XLF,XLP,XLU,XLV,SPY,QQQQ,IWM,MDY,EFA,VEU,EEM,VWO,IYR,ICF,VNQ,GSG,DBC,DBA,USO,LQD,CSJ,CIU,HYG,JNK,PHB,TLT,IEF,SHY,SHV,BND,AGG,MUB,MBB,

     

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  • Most U.S. Sector End Sharply Higher For The Year

    01/01/2011

  • U.S. Sectors Trend: Cautious Gains Amid Mixed Catalyst

    12/19/2010

  • Samsung's Excellent 401K Plan, Pushes the ETF Benchmark Hard

    12/14/2010

  • U.S. Sectors Up on Economic Hopes

    12/11/2010

  • Allegheny Ludlum Corporation 401K Plan Is Rated As Above Average

    12/06/2010

  • Apache Design Solutions 401K Is Good For Diversification Purpose

    12/06/2010

  • US Sectors Nov 29

    11/30/2010

  • Can we Beat Morningstar Bond Managers with ETF's

    11/26/2010

  • US Sectors Up Across the Board

    11/23/2010

  • Top US Sectors Weather the week well -- bottom half feels the pain

    11/19/2010

  • ETFs Provide Insight Into U.S. Sectors' Performance

    11/12/2010

  • Top Tier ETF Broker Finalists

    10/28/2010

First   1   Last  

  • Apache Design Solutions 401K Report On 12/03/2010

    12/03/2010

    This report reviews Apache Design Solutions 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 Apache Design Solutions 401K can achieve reasonable investment results using asset allocation strategies.

    Plan Review and Rating

     

    Apache Design Solutions 401K's 401K plan consists of 42 funds. These funds enable participants to gain exposure to 5 major assets: US Equity, Foreign Equity, REITs, Emerging Market Equity, Fixed Income. The list of minor asset classes covered:

    Conservative Allocation: AOK
    Diversified Emerging Mkts: EEM, GMM, PXH, DEM, SCHE
    Foreign Large Blend: EFA, VEU, GWL, PFA
    Foreign Small/mid Growth: IFSM, VSS, SCHC
    Health: IYH, IXJ, VHT, XBI, PBE, DBR, RYH
    Intermediate Government: IEI, VGIT, ITE
    Intermediate-term Bond: AGG, CIU, BIV, BND
    Large Blend: IVV, IYY, IWV, VTI, VV, SPY, DLN, RSP, SCHX
    Large Growth: IVW, IWZ, JKE, VUG, ELG, QQQQ, RPG, SCHG
    Large Value: IVE, IWW, JKF, VTV, ELV, PWV, RPV, SCHV
    Mid-cap Growth: IJK, IWP, VOT, EMG, PWJ, RFG, UKW
    Mid-cap Value: IJJ, IWS, JKI, VOE, EMV, PWP, RFV, UVU
    Moderate Allocation: AOM
    Natural Resources: IYM, IGE, VAW, XLB, XME, PYZ, DBN, RTM, UYM
    Real Estate: IYR, ICF, VNQ
    Retirement Income:
    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
    Target Date 2016-2020: TZG
    Target Date 2026-2030: TZL
    Target Date 2036-2040: TZV
    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 (85%)
    Fund Quality -- Rated as (18%)
    Portfolio Building -- Rated as (79%)
    Overall Rating: (62%)

    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 Apache Design Solutions 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 5 asset SIB (Simpler Is Better) plan . This SIB plan has the following candidate index funds and their ETFs equivalent:

    US Equity: (SPY or VTI)
    Foreign Equity: (EFA or VEU)
    Emerging Market Equity: (EEM or VWO)
    REITs: (IYR or VNQ or ICF)
    Fixed Income: (AGG or BND)

    Performance chart (as of Dec 2, 2010)

    Performance table (as of Dec 2, 2010)

    Currently, asset classes in US Equity (SPY,VTI) and Emerging Market Equity (EEM,VWO) are doing relatively well. These asset classes are available to Apache Design Solutions 401K participants.

    To summarize, Apache Design Solutions 401K plan participants can achieve reasonable investment returns by adopting asset allocation strategies that are tailored to their risk profiles.

    Symbols: APA , SPY , VTI , EFA , VEU , EEM , VWO , IYR , VNQ , ICF , AGG , BND , AOM , AOK , CIU , BIV , IYH , IXJ , VHT , XBI , PBE , DBR , RYH , IYM , IGE , VAW , XLB , XME , PYZ , DBN , RTM , UYM , GWL , PFA , IVE , IWW , JKF , VTV , ELV , PWV , RPV , SCHV , TZG , TZL , TZV , IVV , IYY , IWV , VV , DLN , RSP , SCHX , IOO , VT , IVW , IWZ , JKE , VUG , ELG , QQQQ , RPG , SCHG , IJJ , IWS , JKI , VOE , EMV , PWP , RFV , UVU , IFSM , VSS , SCHC , IJS , IWN , JKL , VBR , DSV , PWY , RZV , UVT , IJR , IWM , JKJ , VB , DSC , PJM , DES , SAA , UWM , SCHA , GMM , PXH , DEM , SCHE , IEI , VGIT , ITE , IJK , IWP , VOT , EMG , PWJ , RFG , UKW , IJT , IWO , JKK , VBK , DSG , PWT , RZG , UKK

  • Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Report On 12/03/2010

    12/03/2010

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