Microsoft Corporation develops, manufactures, licenses, and supports a range of software products and services for various computing devices worldwide. The company is famous for its Windows operation systems and Office suite of tools for PC computers. It was cofounded by Bill Gates and Paul Allen in 1975 and is headquartered in Redmond, Washington.

Microsoft Corporation Savings Plus 401K Plan consists of 23 funds. These funds enable participants to gain exposure to 3 major assets: US Equity, Foreign Equity, Fixed Income.


Asset Class Ticker Name
MID-CAP VALUE ARTQX Artisan Mid Cap Value
ROOT STLBX Barclays Global Investors LP 2010 I
Target Date 2016-2020 STLCX Barclays Global Investors LP 2020 I
Target Date 2026-2030 STLDX Barclays Global Investors LP 2030 I
Target Date 2036-2040 STLEX Barclays Global Investors LP 2040 I
Target Date 2050+ STLFX Barclays Global Investors LP 2050 I
Retirement Income STLAX Barclays Global Investors LP Retire I
LARGE GROWTH FCNKX Fidelity Contrafund K
LARGE GROWTH FGCKX Fidelity Growth Company K
US EQUITY MSFT Microsoft Corporation
Moderate Allocation OAKBX Oakmark Equity & Income I
Intermediate-Term Bond PTTRX PIMCO Total Return Instl
SMALL BLEND RLPRX Royce Low-Priced Stock R
Foreign Large Blend VWIGX Vanguard International Growth
Foreign Large Value VTRIX Vanguard International Value
LARGE GROWTH VIGRX Vanguard Growth Index
LARGE BLEND VIIIX Vanguard Institutional Index Instl Pl
Short-Term Bond VBISX Vanguard Short-Term Bond Index
Small Growth VISGX Vanguard Small Cap Growth Index
MID-CAP VALUE IWS iShares Russell Midcap Value Index
LARGE VALUE VIVIX Vanguard Value Index Instl


Asset Class Number of funds
Balanced Fund 6
Fixed Income 2
Commodity 0
Sector Fund 0
Foreign Equity 2
Emerging Market Equity 0
US Equity 10
Other 3
Total 23

As of Jan 20, 2012, 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 (49%)
Fund Quality — Rated as above average (77%)
Portfolio Building — Rated as above average (66%)
Overall Rating: average (64%)

Overall, Microsoft 401K plan provides above average fund choices. These funds include several low cost Vanguard funds and several solid funds such as balance fund Oakmark Equity & Income, Fidelity Contrafund, Royce Low-Priced Stock. On the fixed income side, it provides PIMCO total return bond fund (PTTRX). The main drawback is that it only covers 3 major asset classes.

Americans continue to face an uncertain future, given (among others) the high unemployment rate, large federal and local government debts and global trade imbalance. With such an economic backdrop, the stock and debt markets are going to be volatile. Despite this, markets have been resilient and appear positioned to rebound.

In this market it is even more critical to properly diversify and respond market changes. MyPlanIQ offers two asset allocation strategies: strategic and tactical asset allocation strategies (SAA and TAA  for participants in Microsoft Corporation Savings Plus 401K Plan).

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 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 Jan 20, 2012)

Performance table (as of Jan 20, 2012)

In 2011, this plan actually benefited from its narrow 3 core asset coverage from its fund choices as all other risk assets such as emerging market stocks didn’t do well. The tactical asset allocation portfolio in fact had a positive return.

To summarize, Microsoft Corporation Savings Plus 401K Plan participants can achieve the best investment returns by adopting asset allocation strategies that are tailored to their risk profiles.

Microsoft Corporation Savings Plus 401K 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.