Aflac Incorporated 401(k) Savings and Profit Sharing Plan consists of 11 funds. These funds enable participants to gain exposure to 3 major assets: US Equity, Foreign Equity, Fixed Income.
|LARGE BLEND||NYVRX||Davis NY Venture R|
|Moderate Allocation||DODBX||Dodge & Cox Balanced|
|LARGE VALUE||DODGX||Dodge & Cox Stock|
|Mid-Cap Growth||ACRNX||Columbia Acorn Z|
|Foreign Large Blend||BJBIX||Julius B Intl Eq A|
|LARGE GROWTH||RGAFX||American Funds Growth Fund of Amer R5|
|Foreign Large Blend||AEPGX||American Funds EuroPacific Gr A|
|Intermediate-Term Bond||NSFIX||Columbia Total Return Bond Z|
|Small Growth||VSEAX||JPMorgan Small Cap Equity A|
|LARGE BLEND||MASRX||BlackRock S&P 500 Index I|
|Asset Class||Number of funds|
|Emerging Market Equity||0|
As of Sep 6, 2013, this plan investment choice is rated as 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 average (45%)
Fund Quality — Rated as average (64%)
Portfolio Building — Rated as above average (75%)
Overall Rating: average (63%)
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 Sep 6, 2013)
Performance table (as of Sep 6, 2013)
|1Yr AR||3Yr AR||3Yr Sharpe||5Yr AR||5Yr Sharpe|
|Aflac Incorporated 401(k) Savings and Profit Sharing Plan Tactical Asset Allocation Moderate||9.8%||12.6%||8.8%||96.6%||7.9%||88.4%|
|Aflac Incorporated 401(k) Savings and Profit Sharing Plan Strategic Asset Allocation – Equal Weight Moderate||9.2%||12.1%||10.8%||92.9%||8.1%||56.0%|
|Three Core Asset ETF Benchmark Tactical Asset Allocation Moderate||5.9%||8.3%||6.3%||89.7%||4.1%||51.8%|
|Three Core Asset ETF Benchmark Strategic Asset Allocation – Equal Weight Moderate||6.4%||9.6%||8.5%||68.4%||5.9%||34.0%|
The portfolios benefit greatly from the recent strength in US and developed country stocks. However, we think providing more diversified choices such as emerging market stock funds and REITs funds can allow participants to construct a better asset allocation portfolio.
This plan beats the three asset benchmark by virtue of the US asset class choices that sport several excellent funds. If would be a stronger plan with more fixed income choices and an additional asset class.
To summarize, Aflac Incorporated 401(k) Savings and Profit Sharing Plan participants can achieve the best investment returns by adopting asset allocation strategies that are tailored to their risk profiles.
Aflac Incorporated 401(k) Savings and Profit Sharing Plan would do well by their employees to consider reviewing their existing funds and adding an additional asset class.
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.