Tyco International Ltd. provides security products and services, fire protection and detection products and services, valves and controls, and other industrial products to customers worldwide.
TYCO INTERNATIONAL RETIREMENT SAVINGS and INVESTMENT PLAN IV consists of 20 funds. These funds enable participants to gain exposure to 3 major assets: US Equity, Foreign Equity, Fixed Income.
|LARGE GROWTH||FDGRX||Fidelity Growth Company|
|LARGE VALUE||VWNFX||Vanguard Windsor II|
|LARGE BLEND||FUSVX||Fidelity Spartan U.S. Equity Index Adv|
|LARGE GROWTH||PAPIX||Allianz CCM Capital Appreciation Instl|
|SMALL BLEND||NAESX||Vanguard Small Cap Index|
|Target Date 2000-2010||FFFBX||Fidelity Freedom 2000|
|Target Date 2000-2010||FFFCX||Fidelity Freedom 2010|
|Target Date 2016-2020||FFFDX||Fidelity Freedom 2020|
|Target Date 2026-2030||FFFEX||Fidelity Freedom 2030|
|Target Date 2036-2040||FFFFX||Fidelity Freedom 2040|
|Target Date 2050+||FFFHX||Fidelity Freedom 2050|
|Moderate Allocation||FBALX||Fidelity Balanced|
|Retirement Income||FFFAX||Fidelity Freedom Income|
|Moderate Allocation||CTFAX||Columbia Acorn Thrm;A|
|Intermediate-Term Bond||BIV||Vanguard Intermediate-Term Bond ETF|
|Moderate Allocation||FPURX||Fidelity Puritan|
|LARGE BLEND||FUSEX||Fidelity Spartan 500 Index Inv|
|WORLD STOCK||JAWWX||Janus Worldwide T|
|LARGE BLEND||NBGTX||Neuberger Berman Guardian Tr|
|Asset Class||Number of funds|
|Emerging Market Equity||0|
As of Sep 10, 2013, this plan 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:
Diversification — Rated as below average (16%)
Fund Quality — Rated as poor (5%)
Portfolio Building — Rated as average (50%)
Overall Rating: below average (26%)
Using the above funds, one can construct model portfolios with two asset allocation strategies: strategic and tactical asset allocation strategies (SAA and TAA for participants in TYCO INTERNATIONAL RETIREMENT SAVINGS and INVESTMENT PLAN IV).
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.
The following compares these model portfolios:
Portfolio Performance Comparison
|Ticker/Portfolio Name||1Yr AR||3Yr AR||3Yr Sharpe||5Yr AR||5Yr Sharpe||10Yr AR||10Yr Sharpe|
|Tyco International Retirement Savings and Investment Plan IV Strategic Asset Allocation – Equal Weight Moderate||7.6%||7.9%||0.96||6.1%||0.5||5.4%||0.44|
|TYCO INTERNATIONAL RETIREMENT SAVINGS and INVESTMENT PLAN IV Strategic Asset Allocation – Optimal Moderate||9.6%||10.5%||1.02||8.1%||0.54||6.3%||0.43|
|Tyco International Retirement Savings and Investment Plan IV Tactical Asset Allocation Moderate||9.6%||9.5%||1.41||7.3%||0.94||6.5%||0.71|
|VFINX (Vanguard 500 Index Investor)||20.6%||17.2%||1||8.6%||0.33||7.3%||0.3|
|VBINX (Vanguard Balanced Index Inv)||11.8%||11.5%||1.16||7.7%||0.51||6.9%||0.48|
The performance has not bee stellar but is reasonable. TYCO INTERNATIONAL RETIREMENT SAVINGS and INVESTMENT PLAN IV would do well by their employees to consider reviewing their existing funds and adding an additional asset class.
TYCO INTERNATIONAL RETIREMENT SAVINGS and INVESTMENT PLAN IV participants can achieve the best investment returns by adopting asset allocation strategies that are tailored to their risk profiles.
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.