BLUE SHIELD OF CALIFORNIA TAX DEFERRED SALARY INVESTMENT PLAN Investment Options

Participating in the Blue Shield of California Tax Deferred Salary Investment Plan offers a solid foundation for your retirement savings. To maximize the potential of your retirement plan, understanding how to construct a balanced and diversified asset allocation portfolio is crucial. This article will guide you through a structured four-step RAID approach: Risk assessment, Asset allocation, Investment selections, and Disciplined rebalancing.

Investment Options

Below are your available investment options within the plan:

• FIDELITY BROKERAGELINK MUTUAL FUNDS
• FIDELITY EXTENDED MARKET INDEX FUND MUTUAL FUNDS
• FIDELITY GOVERNMENT CASH RESERVES MUTUAL FUNDS
• FIDELITY U.S. BOND INDEX FUND MUTUAL FUNDS
• BLACKROCK TOTAL RETURN BOND FUND M
• DIAMOND HILL LARGE CAP PORTFOLIO FEE CLASS L
• FIDELITY GROWTH COMPANY COMINGLED POOL CLASS 3
• GALLIARD STABLE VALUE FUND X
• HARDING LOEVNER INTERNATIONAL EQUITY -- CLASS BN
• SPARTAN 500 INDEX POOL CLASS E
• STATE STREET TARGET RETIREMENT INCOME FUND CLASS IV
• STATE STREET TARGET RETIREMENT 2020 FUND CLASS IV
• STATE STREET TARGET RETIREMENT 2025 FUND CLASS IV
• STATE STREET TARGET RETIREMENT 2030 FUND CLASS IV
• STATE STREET TARGET RETIREMENT 2050 FUND CLASS IV
• STATE STREET TARGET RETIREMENT 2055 FUND CLASS IV
• STATE STREET TARGET RETIREMENT 2060 FUND CLASS IV
• THE PRINCIPAL DIVERSIFIED REAL ASSET COLLECTIVE INVESTMENT FUND
• VANGUARD INSTITUTIONAL TOTAL INTERNATIONAL STOCK MARKET INDEX TRUST
• WTC-CIF II SMID-CAPE RESEARCH EQUITY SERIES 4

These options cover the following major asset classes:

• US stocks: FIDELITY EXTENDED MARKET INDEX FUND, DIAMOND HILL LARGE CAP PORTFOLIO, FIDELITY GROWTH COMPANY COMINGLED POOL, SPARTAN 500 INDEX POOL, WTC-CIF II SMID-CAPE RESEARCH EQUITY SERIES
• International stocks: HARDING LOEVNER INTERNATIONAL EQUITY, VANGUARD INSTITUTIONAL TOTAL INTERNATIONAL STOCK MARKET INDEX TRUST
• REITs: THE PRINCIPAL DIVERSIFIED REAL ASSET
• Bonds: FIDELITY GOVERNMENT CASH RESERVES, FIDELITY U.S. BOND INDEX FUND, BLACKROCK TOTAL RETURN BOND FUND, GALLIARD STABLE VALUE FUND

Four-Step RAID Approach

1. Risk Assessment

Determining your risk profile is the first step. Consider factors such as your age, risk tolerance, job stability, and growth expectations. This comprehensive guide on how to decide your stock allocation can assist in defining your risk profile.

Generally, younger investors with longer investment horizons and higher risk tolerance can allocate a larger portion of their portfolio to stocks. Conversely, older investors closer to retirement might prefer a higher allocation to bonds for capital preservation.

2. Asset Allocation

Next, decide on the allocation to each major asset class. You can refer to these asset allocation templates for guidance based on your risk profile.

Given the available investment options, we cover portfolios for the following major asset classes: US stocks, international stocks, REITs, and bonds.

Example of a Moderate Asset Allocation Portfolio:

• 36% US stocks
• 18% International stocks
• 6% REITs
• 40% Bonds

3. Investment Selections

Select funds for each asset class:

• US Stocks (36%): Allocate to Spartan 500 Index Pool Class E, Fidelity Growth Company Commingled Pool Class 3, Diamond Hill Large Cap Portfolio Fee Class L
• International Stocks (18%): Allocate to Vanguard Institutional Total International Stock Market Index Trust, Harding Loevner International Equity Class BN
• REITs (6%): The Principal Diversified Real Asset Collective Investment Fund
• Bonds (40%): Fidelity U.S. Bond Index Fund, BlackRock Total Return Bond Fund M

4. Disciplined Rebalancing

Regularly monitor your portfolio and rebalance it to maintain your desired asset allocation. Over time, asset performance will cause your allocations to drift. Rebalancing ensures you stay on track to achieve your long-term investment goals.

Prioritize low-cost index funds where possible, particularly for the stock portion of your portfolio, to maximize returns by minimizing fees.

By following the RAID approach and using the recommended resources, you can effectively construct a balanced and diversified asset allocation portfolio. This will help you achieve your retirement goals in a disciplined and structured manner.

Basic asset allocation templates

The following asset allocation templates are based on popular lazy portfolios. These are core or major asset class-based portfolios using ultra-low-cost index funds for each asset class. Once you have decided on your proper risk asset (stocks) allocation, you can utilize these lazy portfolio templates to scale the allocations to your risk allocation level. See Asset Allocation Portfolio Templates for a guide:

The return data shown below all have the same latest date: 05/08/2025.

• Brief Performance
• Chart

Name	YTD Return	1Yr AR	3Yr AR	5Yr AR	10Yr AR	15Yr AR	20Yr AR	Inception
Four Core Asset Portfolio	0.28%	6.72%	7.08%	7.48%	6.09%	7.11%	6.67%	6.40%
Five Core Asset Portfolio	0.04%	6.68%	6.93%	7.34%	6.01%	7.00%	6.75%	6.59%
Three Core Asset Portfolio	0.07%	6.63%	7.82%	7.93%	6.46%	7.39%	6.80%	6.33%
Two Core Asset Portfolio	-2.07%	6.91%	8.36%	8.41%	7.54%	8.58%	7.50%	6.82%
Yale Endowment Template	0.70%	7.66%	6.52%	7.36%	6.51%	7.93%	7.45%	7.67%
S&P 500 Index	-3.34%	10.51%	13.95%	15.79%	12.23%	13.15%	10.17%	8.32%

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