Investment Options

The Cadence Design Systems Inc. 401k Plan offers participants a range of investment options to construct a diversified asset allocation portfolio. The available options are as follows:

1. Vanguard Target Retirement 2020 Trust
2. Vanguard Target Retirement 2030 Trust
3. Vanguard Target Retirement 2040 Trust
4. Vanguard Target Retirement 2050 Trust
5. Vanguard Target Retirement 2060 Trust
6. Vanguard Target Retirement Income Trust
7. Vanguard Institutional 500 Index Trust
8. Vanguard Treasury Money Market Investment Fund
9. DFA US Small Cap I Fund
10. Hartford Midcap HLS IA Fund
11. Vanguard Extended Market Index-Institutional Fund
12. Vanguard International Growth Admin Fund
13. Vanguard Total International Stock Index Fund I
14. Vanguard Total Bond Market Index-Institutional Fund
15. Vanguard US Growth Admin Fund
16. Metropolitan West Total Return Bond
17. Dodge & Cox Stock Fund
18. Dodge & Cox International Stock Fund
19. Allspring Special Mid Cap Value

Most funds are index funds that have low expense ratios.

Major Asset Classe for Diversified Asset Allocation

1. US Stocks: The Cadence Design Systems Inc. 401k Plan offers exposure to US stocks through the Vanguard Institutional 500 Index Trust and other funds such as Vanguard US Growth Admin Fund, Dodge & Cox Stock Fund, DFA US Small Cap I Fund and Allspring Special Mid Cap Value. The lineup includes some of the best US stock funds such as Dodge & Cox Stock Fund and DFA US Small Cap I Fund. These options allow participants to invest in a broad range of US stocks, providing them with a foundation for US equity growth within their portfolio.
2. International Stocks: To gain exposure to international stocks, participants can invest in the Vanguard International Growth Admin Fund, Vanguard Total International Stock Index Fund I, and Dodge & Cox International Stock Fund. These funds provide access to international companies and help diversify participants’ portfolios beyond US markets.
3. REITs (Real Estate Investment Trusts): The Cadence Design Systems Inc. 401k Plan does not offer dedicated REIT options. This limitation means participants may need to seek alternative investment vehicles outside of the plan to include real estate in their portfolio. The absence of REITs within the plan can be seen as a drawback, as it restricts participants from directly investing in this asset class.
4. Emerging Market Stocks: The plan does not have specific investment options focused on emerging market stocks. While the Vanguard Total International Stock Index Fund I and other international funds do provide some exposure to emerging markets, participants seeking greater allocation to this asset class may find the options limited within the plan.
5. Bonds: The plan includes bond investments through various mutual funds such as the Vanguard Total Bond Market Index-Institutional Fund and Metropolitan West Total Return Bond, whose fund managers have won Morningstar’s manager of the year award in fixed income category. These funds allow participants to include bonds in their portfolios, offering capital preservation and income generation potential.

Cash Related Investments: The Cadence Design Systems Inc. 401k Plan offers participants the Vanguard Treasury Money Market Investment Fund, which is a money market fund. This option provides a cash-related investment for participants who prefer stability and liquidity in their portfolio.

Target Date Funds: For participants seeking a simplified approach to asset allocation, the plan offers Vanguard Target Retirement Trusts. These funds automatically adjust their asset allocation based on the target retirement date, gradually shifting towards a more conservative investment mix over time. Participants can choose the target date fund that aligns with their expected retirement year to simplify their investment decisions.

Utilizing MyPlanIQ’s Retirement Portfolio Tool

Participants in the Cadence Design Systems Inc. 401k Plan can benefit from utilizing MyPlanIQ’s retirement portfolio tool. This tool allows participants to customize a risk-managed tactical asset allocation model portfolio for the plan. By considering factors such as risk tolerance, time horizon, and investment goals, participants can receive customized portfolio suggestions. MyPlanIQ monitors market and economic trends and regularly updates rebalance instructions on these model portfolios based on its strategies. If participants are concerned about risk, they can choose to customize a risk-managed tactical asset allocation model portfolio for the plan using MyPlanIQ’s tactical allocation model portfolios. These tactical portfolios minimize interim large drawdown and still manage to deliver similar or better returns than standard strategic allocation portfolios.