Employees in Sprint Nextel Dial up An Average 401K Retirement Plan
03/22/2011 0 comments
Sprint Nextel Corporation offers wireless and wireline communications products and services to consumers, businesses, and government users in the United States, Puerto Rico, and the U.S. Virgin Islands. Sprint Nextel was founded in 1899 and is headquartered in Overland Park, Kansas. Recently, AT&T (T) announced its plan to acquire T-Mobile USA, putting enormous pressure to Sprint Nextel, ranked only as a distant the third largest mobile phone service provider in the U.S.
In this article, we review Sprint Nextel 401K Plan. We will discuss how participants in the plan can achieve reasonable investment results using asset allocation strategies. We will also discuss how those portfolios are positioned in today’s market environment.
Sprint Nextel 401K Plan's 401K plan consists of 29 funds. These funds enable participants to gain exposure to 4 major assets: US Equity, Foreign Equity, Emerging Market Equity, Fixed Income. Four Core Asset ETF (EM) Benchmark's 401K plan consists of 4 funds. These funds enable participants to gain exposure to 4 major assets: US Equity, Foreign Equity, Emerging Market Equity, Fixed Income.
The following table lists its fund choices:
Asset Class | Ticker | Name |
---|---|---|
LARGE VALUE | TWEIX | American Century Equity Income Inv |
SMALL VALUE | DFSVX | DFA US Small Cap Value I |
Mid-Cap Growth | HAMGX | Harbor Mid Cap Growth Instl |
High Yield Bond | PHIYX | PIMCO High Yield Instl |
WORLD BOND | PFUIX | PIMCO Foreign Bond |
WORLD STOCK | GMGEX | GMO Global Equity Allocation III |
SMALL BLEND | IWM | iShares Russell 2000 Index |
Foreign Large Blend | EFA | iShares MSCI EAFE Index |
LARGE BLEND | SPY | SPDR S&P 500 |
MID-CAP BLEND | MDY | SPDR S&P MidCap 400 |
Multisector Bond | SMARX | Brandes Separately Managed Acct Res Tr |
Multisector Bond | SMARX | Brandes Separately Managed Acct Res Tr |
Intermediate-Term Bond | AGG | iShares Barclays Aggregate Bond |
ROOT | CASH | CASH |
DIVERSIFIED EMERGING MKTS | EEM | iShares MSCI Emerging Markets Index |
Foreign Large Blend | VGTSX | Vanguard Total Intl Stock Index Inv |
LARGE GROWTH | VWUSX | Vanguard US Growth Inv |
LARGE VALUE | VIVAX | Vanguard Value Index Inv |
Target Date Funds | Northern Trust Corp |
The list of minor asset classes covered by Sprint Nextel 401K Plan | The list of minor asset classes covered by Four Core Asset ETF (EM) Benchmark |
---|---|
Diversified Emerging Mkts: EEM, GMM, PXH, DEM, SCHE Equity: VTI, VT Foreign Large Blend: EFA, VEU, GWL, PFA High Yield Bond: HYG, JNK, PHB 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 Blend: IJH, IWR, JKG, VO, MDY, EMM, PJG, DON, EZM, MVV Mid-cap Growth: IJK, IWP, VOT, EMG, PWJ, RFG, UKW Multisector Bond: AGG, GBF, BND, LAG Small Blend: IJR, IWM, JKJ, VB, DSC, PJM, DES, SAA, UWM, SCHA Small Value: IJS, IWN, JKL, VBR, DSV, PWY, RZV, UVT World Bond: IGOV, BWX, WIP World Stock: IOO, VT |
Diversified Emerging Mkts: EEM, GMM, PXH, DEM, SCHE 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 |
Asset Class | Sprint Nextel 401K Plan | Four Core Asset ETF (EM) Benchmark | ||
---|---|---|---|---|
Fixed Income | 5 | 1 | ||
Sector Fund | 0 | 0 | ||
Foreign Equity | 3 | 1 | ||
Emerging Market Equity | 1 | 1 | ||
US Equity | 19 | 1 | ||
Other | 1 | 0 | ||
Total | 29 | 4 |
As of Mar 21, 2011, Sprint Nextel 401K Plan investment choice is rated as average and Four Core Asset ETF (EM) Benchmark 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 | Sprint Nextel 401K Plan | Four Core Asset ETF (EM) Benchmark | ||
---|---|---|---|---|
Diversification | above average (83%) | poor (8%) | ||
Fund Quality | below average (15%) | poor (8%) | ||
Portfolio Building | average (59%) | below average (20%) | ||
Overall Rating | average (53%) | below average (13%) |
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 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 Mar 21, 2011)
Performance table (as of Mar 21, 2011)
Portfolio Name | 1Yr AR | 1Yr Sharpe | 3Yr AR | 3Yr Sharpe | 5Yr AR | 5Yr Sharpe |
---|---|---|---|---|---|---|
Sprint Nextel 401K Plan Tactical Asset Allocation Moderate | 4% | 19% | 10% | 79% | 11% | 70% |
Sprint Nextel 401K Plan Strategic Asset Allocation Moderate | 11% | 92% | 4% | 17% | 5% | 24% |
Four Core Asset ETF (EM) Benchmark Tactical Asset Allocation Moderate | -0% | -16% | 6% | 46% | 8% | 51% |
Four Core Asset ETF (EM) Benchmark Strategic Asset Allocation Moderate | 11% | 66% | 4% | 11% | 5% | 18% |
Currently Commodities, Real Estate and US Equity are doing well. Only US Equity is available to Sprint Nextel 401K Plan participants.
To summarize, Sprint Nextel offers its employees average rated fund choices. It has strong fixed income funds or portfolios. Some low cost funds such as DFA index fund or S&P index funds are good portfolio building blocks. Actively managed funds such as American Century Equity Income (TWEIX) or GMO Global Equity Allocation (GMGEX) have been outstanding. The plan can extend its diversification by offering further funds in major asset classes such as REITs as well as some high quality actively managed equity funds.
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:S,T,SPY,VTI,EFA,VEU,EEM,VWO,AGG,BND,VT,HYG,JNK,PHB,CIU,BIV,GWL,PFA,IVE,IWW,JKF,VTV,ELV,PWV,RPV,SCHV,IGOV,BWX,WIP,IVV,IYY,IWV,VV,DLN,RSP,SCHX,IOO,IVW,IWZ,JKE,VUG,ELG,QQQQ,RPG,SCHG,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,IJK,IWP,VOT,EMG,PWJ,RFG,UKW,TWEIX,DFSVX,HAMGX,PHIYX,PFUIX,GMGEX,
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