401K Investments Review: Advanced Micro Devices Inc (AMD) Retirement Savings Plan

by | Oct 9, 2013 | 401K, 403B, Asset-Allocation, Headline, Investments, Portfolios | 0 comments

Advanced Micro Devices (AMD) is one of the largest semiconductor companies. It products include microprocessor and graphics ICs. 

Advanced Micro Devices Inc (AMD) Retirement Savings Plan is a simple plan that consists of  most Vanguard funds and a few selected active managed funds. These funds enable participants to gain exposure to 3 major assets: US Equity, Foreign Equity, Fixed Income.

 

Asset Class Ticker Name
SMALL VALUE PSVIX Allianz NFJ Small Cap Value Instl
Foreign Large Value BIIEX Brandes International Equity I
Moderate Allocation DODBX Dodge & Cox Balanced
MID-CAP BLEND FSLCX Fidelity Small Cap Stock
Foreign Large Blend GEARX GMO International Equity Allc Ser R6
LARGE GROWTH HACAX Harbor Capital Appreciation Instl
LARGE VALUE LAFFX Lord Abbett Affiliated A
LARGE BLEND FXSIX Fidelity Spartan 500 Index Institutional
Small Growth VSGIX Vanguard Small Cap Growth Index Instl
US Small Cap NAESX Vanguard Small Cap Index Inv
SMALL VALUE VISVX Vanguard Small Cap Value Index Inv
Target Date 2000-2010 VTENX Vanguard Target Retirement 2010 Inv
Target Date 2011-2015 VTXVX Vanguard Target Retirement 2015 Inv
Target Date 2016-2020 VTWNX Vanguard Target Retirement 2020 Inv
Target Date 2021-2025 VTTVX Vanguard Target Retirement 2025 Inv
Target Date 2026-2030 VTHRX Vanguard Target Retirement 2030 Inv
Target Date 2031-2035 VTTHX Vanguard Target Retirement 2035 Inv
Target Date 2036-2040 VFORX Vanguard Target Retirement 2040 Inv
Target Date 2041-2045 VTIVX Vanguard Target Retirement 2045 Inv
Target Date 2046-2050 VFIFX Vanguard Target Retirement 2050 Inv
Target-Date 2051+ VFFVX Vanguard Target Retirement 2055 Inv
Retirement Income VTINX Vanguard Target Retirement Income Inv
Intermediate-Term Bond WATFX Western Asset Core Bond I

 

Asset Class Number of funds
REITs 0
Balanced Fund 10
Fixed Income 1
Commodity 0
Sector Fund 0
Foreign Equity 2
Emerging Market Equity 0
US Equity 8
Other 3
Total 24

 

As of Sep 25, 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 below average (17%)
Fund Quality — Rated as average (52%)
Portfolio Building — Rated as above average (84%)
Overall Rating: average (54%)

Model portfolios using strategic and tactical asset allocation strategies (SAA and TAA ) are generated 

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 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 25, 2013)

Performance table (as of Sep 25, 2013)

Portfolio Name 1 Week
Return		 YTD
Return		 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe
Advanced Micro Devices Inc (AMD) Retirement Savings Plan Tactical Asset Allocation Moderate -0.7% 10.1% 11.1% 152.6% 8.2% 118.0% 9.3% 120.3%
Advanced Micro Devices Inc (AMD) Retirement Savings Plan Strategic Asset Allocation – Equal Weight Moderate -0.6% 8.0% 9.5% 149.1% 7.9% 104.1% 7.5% 62.8%
Three Core Asset ETF Benchmark Tactical Asset Allocation Moderate -1.1% 8.4% 10.0% 131.1% 7.1% 99.9% 4.6% 57.9%
Three Core Asset ETF Benchmark Strategic Asset Allocation – Equal Weight Moderate -1.2% 9.0% 11.0% 141.5% 8.2% 66.1% 6.5% 38.3%

Currently International Equity, US Equity and Balance Fund are doing well. These asset classes are available to Advanced Micro Devices Inc (AMD) Retirement Savings Plan participants.

This plan beats the three asset benchmark by virtue of the US asset class choices. If would be a stronger plan with more fixed income choices and an additional asset class.

To summarize, Advanced Micro Devices Inc (AMD) Retirement Savings Plan participants can achieve the best investment returns by adopting asset allocation strategies that are tailored to their risk profiles.

Advanced Micro Devices Inc (AMD) Retirement Savings Plan would do well by their employees to consider reviewing their existing funds and adding an additional asset class.

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.