News About <![CDATA[ISHARES RUSSELL 3000 VALUE ETF]]> News About en-us <![CDATA[How to prepare for the next bear market]]> <![CDATA[How To Find The Best Style ETFs]]> Related posts:
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  2. Top Ranked Small Cap Value ETF In Focus [ProShares Ultra MidCap400 (ETF), SPDR S&P 600 Small Cap Value ETF]
  3. S&P 500 Index: Respecting The Range [SPDR S&P 500 ETF Trust, ProShares Ultra S&P500 (ETF)]
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<![CDATA[iShares Russell 3000 Value ETF Experiences Big Outflow]]> <![CDATA[Tuesday's ETF with Unusual Volume: IWW]]> <![CDATA[IWW, GE, PFE, T: ETF Inflow Alert]]> <![CDATA[Friday's ETF with Unusual Volume: IWW]]> <![CDATA[Small Caps Leading the Way in 2013]]>

One of the tools on the Dorsey Wright research database that I check regularly is called the Asset Class Matrix which takes a broad universe of asset classes and ranks them by their relative strength. 

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<![CDATA[iShares Russell 3000 Value Index Fund Shares Up 19.0% Since SmarTrend's Buy Recommendation (IWW)]]> <![CDATA[Uptrend Call Working As iShares Russell 3000 Value Index Fund Stock Rises 17.8% (IWW)]]> <![CDATA[U.S. ETFs Attract $53 Billion in First Quarter: Morningstar]]> ]]> <![CDATA[IWW, BRK.B, MRK, GS: Large Outflows Detected at ETF]]> <![CDATA[Wednesday's ETF with Unusual Volume: IWW]]> <![CDATA[iShares Russell 3000 Value Index Fund -- Insider Buying Index Registering 11.2%]]> <![CDATA[IWW Makes Bullish Cross Above Critical Moving Average]]> <![CDATA[Notable ETF Outflow Detected - IWW]]> <![CDATA[IWW, PG, KFT, GS: ETF Inflow Alert]]> <![CDATA[iShares Russell 3000 Value Index Fund Breaks Above 200-Day Moving Average - Bullish for IWW]]> <![CDATA[iShares Russell 3000 Value Index Fund (IWW) Enters Oversold Territory]]> <![CDATA[How to buy ... ETFs]]> <![CDATA[5 reasons to defy the bears and buy stocks now]]> <![CDATA[Schwab Mutual Funds Beat out ETFs]]> l

Retirement investing is a "hair on fire" problem -- especially for baby boomers for whom retirement is a near and present danger. There is a real lack of consistent, unbiased information that a retiree can use to help improve risk adjusted returns. Blogger Jenny Hollingworth has been teaching herself about investing and has come to the point where she is going to choose a plan and make her first investments.

In her recent post New Steps she sorted through a list of alternatives and chose the Schwab OneSource Select List Funds.

The reason for her choice was:

  • The highest possible rating for each plan is 5 stars.  So I bypassed anything that didn’t have 5 (because really, why go for less?)
  • Picked out a name I knew: Schwab.  Specifically: Schwab OneSource Select List Funds. I selected it.  
  • This is an application to Charles Schwab's OneSource Select List mutual funds. These funds are  No Load and No Transaction Fee (NTF) mutual funds. Based on Schwab's policy, the no load NTF funds have 90 days redemption fee period. As of 1/1/2010, there are total  140 OneSource Select List funds available from Schwab.

We are going to review the Schwab OneSource Select List Funds  to see whether she chose a good plan. The plan consists of 137 funds. These funds enable participants to gain exposure to 6 major assets: US Equity, Commodity, Foreign Equity, REITs, Emerging Market Equity, Fixed Income.

 

Asset Class Ticker Name
LARGE VALUE AAGPX American Beacon Lg Cap Value Inv
Foreign Large Value AAIPX American Beacon Intl Equity Inv
Retirement Income AANPX American Beacon Retire Inc & Apprec Inv
High Yield Muni ABHYX American Century High-Yield Muni Inv
Inflation-Protected Bond ACITX American Century Infl-Adj Bond Inv
Muni National Long ACLVX American Century Long-Term Tax-Free Inv
MID-CAP VALUE ACMVX American Century Mid Cap Value Inv
Conservative Allocation AONIX American Century One Choice: Vry Cnsrv I
MID-CAP VALUE ARDEX Aston/River Road Dividend All Cap Val N
Target Date 2011-2015 ARFIX American Century LIVESTRONG 2015 Inv
Retirement Income ARTOX American Century LIVESTRONG Inc Inv
Target Date 2021-2025 ARWIX American Century LIVESTRONG 2025 Inv
Target Date 2031-2035 ARYIX American Century LIVESTRONG 2035 Inv
SMALL VALUE AVPAX American Beacon Small Cp Val Inv
EUROPE STOCK AXEAX Threadneedle European Equity A
Muni National Interm BMBSX Baird Intermediate Muni Bd Inv
Technology BOGSX Black Oak Emerging Technology
Small Growth BSCFX Baron Small Cap
Moderate Allocation BUFBX Buffalo Balanced
Technology BUFTX Buffalo Science & Technology
DIVERSIFIED EMERGING MKTS CEMVX Causeway Emerging Markets Investor
MID-CAP BLEND CHTTX Aston/Optimum Mid Cap N
Intermediate Government CPTNX American Century Government Bond Inv
Small Growth CSMVX Century Small Cap Select Inv
REAL ESTATE CSRSX Cohen & Steers Realty Shares
Long-Short CVSIX Calamos Market Neutral Income A
SMALL BLEND DISSX Dreyfus Small Cap Stock Index
Bank Loan EABLX Eaton Vance Floating Rate Adv
Conservative Allocation EXDAX Manning & Napier Pro-Blend Cnsrv Term S
Foreign Large Blend EXWAX Manning & Napier World Opportunities A
Moderate Allocation FAGSX First American Strat Growth Allc A
Financial FBRSX FBR Small Cap Financial
ULTRASHORT BOND FEUGX Federated Adjustable Rate Secs Instl
Intermediate Government FICMX Federated Income Instl
Muni National Interm FIMTX Federated Intermediate Municipal Instl
LARGE BLEND FMIHX FMI Large Cap
Long-Short FMLSX Wasatch-1st Source Long/Short
SHORT GOVERNMENT FSGVX Federated US Govt 1-3 Yr Instl
Muni Short FSHIX Federated Shrt-Interm Dur Muni Instl
Short-Term Bond FSTIX Federated Short-Term Income Instl
Intermediate-Term Bond FTRFX Federated Total Return Bond Instl Svc
SMALL BLEND GABSX Gabelli Small Cap Growth AAA
Communications GABTX GAMCO Global Telecommunications AAA
LARGE GROWTH HCAIX Harbor Capital Appreciation Inv
Foreign Large Blend HIINX Harbor International Inv
WORLD STOCK HLMGX Harding Loevner Global Equity Advisor
Foreign Large Growth HLMNX Harding Loevner International Equity Inv
Equity Energy ICENX ICON Energy S
China Region ICHKX Guinness Atkinson China & Hong Kong
LARGE VALUE INDZX RiverSource Diversified Equity Inc A
Moderate Allocation JABAX Janus Balanced T
Health JAGLX Janus Global Life Sciences T
LARGE GROWTH JAMRX Janus Research T
Small Growth JATTX Janus Triton T
Foreign Large Blend JETAX Artio International Equity II A
Target Date 2021-2025 JNSAX JPMorgan SmartRetirement 2025 A
LARGE BLEND JRMSX INTECH Risk-Managed Core T
Target Date 2011-2015 JSFAX JPMorgan SmartRetirement 2015 A
Target Date 2026-2030 JSMAX JPMorgan SmartRetirement 2030 A
Target Date 2016-2020 JTTAX JPMorgan SmartRetirement 2020 A
LARGE BLEND JUEAX JPMorgan US Equity A
LARGE VALUE JVLAX JHancock3 Disciplined Value A
Small Growth KGSCX Kalmar Growth-with-Value Small Cap
LARGE GROWTH LGILX Laudus Growth Investors US Large Cap Gr
WORLD BOND LIFNX Laudus Mondrian Intl Fixed Income
Foreign Large Blend LISOX Lazard Intl Strategic Equity Open
Multisector Bond LSBRX Loomis Sayles Bond Retail
DIVERSIFIED PACIFIC/ASIA MAPIX Matthews Asia Pacific Equity Income
PACIFIC/ASIA EX-JAPAN STK MAPTX Matthews Pacific Tiger Investor
China Region MCHFX Matthews China Investor
Muni National Interm MITFX Marshall Intermediate Tax-Free Inv
JAPAN STOCK MJFOX Matthews Japan Investor
Foreign Large Blend MKIEX McKee International Equity Instl
DIVERSIFIED PACIFIC/ASIA MPACX Matthews Asia Pacific Investor
High Yield Bond MWHYX Metropolitan West High Yield Bond M
Short-Term Bond MWLDX Metropolitan West Low Duration Bond M
Intermediate-Term Bond MWTRX Metropolitan West Total Return Bond M
MID-CAP BLEND NMMCX Northern Multi-Manager Mid Cap
SMALL VALUE NOSGX Northern Small Cap Value
Muni National Long NOTEX Northern Tax-Exempt
Small Growth NSPAX ING Small Cap Opportunities A
Foreign Small/Mid Value OAKEX Oakmark International Small Cap I
WORLD STOCK OAKGX Oakmark Global I
COMMODITIES BROAD BASKET PCRDX PIMCO Commodity Real Ret Strat D
Emerging Markets Bond PEMDX PIMCO Emerging Markets Bond D
LARGE BLEND PEOPX Dreyfus S&P 500 Index
WORLD BOND PFODX PIMCO Foreign Bond (USD-Hedged) D
Intermediate-Term Bond PGBOX JPMorgan Core Bond A
Multisector Bond PONDX PIMCO Income D
LARGE BLEND PRBLX Parnassus Equity Income - Inv
Inflation-Protected Bond PRRDX PIMCO Real Return D
SMALL VALUE PSOAX JPMorgan Small Cap Value A
Intermediate-Term Bond PTTDX PIMCO Total Return D
SMALL BLEND RYTFX Royce Total Return Svc
Intermediate-Term Bond SAMIX RidgeWorth Intermediate Bond I
Foreign Large Blend SICNX Schwab International Core Equity Inst
Foreign Large Blend SIEIX RidgeWorth Intl Equity Index I
ULTRASHORT BOND SIGVX RidgeWorth US Gov Sec Ultra-Short Bd I
Target Date 2031-2035 SRJAX JPMorgan SmartRetirement 2035 A
DIVERSIFIED EMERGING MKTS SSEMX SSgA Emerging Markets Instl
High Yield Bond STHTX RidgeWorth High Income I
Muni National Interm STTBX RidgeWorth Investment Grade T/E Bond I
LARGE BLEND SWANX Schwab Core Equity Inv
Global Real Estate SWASX Schwab Global Real Estate Select
Target Date 2026-2030 SWDRX Schwab Target 2030
LARGE VALUE SWDSX Schwab Dividend Equity
Financial SWFFX Schwab Financial Services
Target Date 2011-2015 SWGRX Schwab Target 2015
Intermediate Government SWGSX Schwab GNMA
Long-Short SWHEX Schwab Hedged Equity
Health SWHFX Schwab Health Care
Target Date 2021-2025 SWHRX Schwab Target 2025
Intermediate-Term Bond SWIIX Schwab Premier Income Instl
Foreign Large Blend SWISX Schwab International Index
Retirement Income SWKRX Schwab Monthly Income Enh Payout
Retirement Income SWLRX Schwab Monthly Income Max Payout
LARGE GROWTH SWLSX Schwab Large-Cap Growth
Foreign Large Growth SWMIX Laudus International MarketMasters Sel
Small Growth SWMSX Laudus Small-Cap MarketMasters Select
Muni National Interm SWNTX Schwab Tax-Free Bond
Moderate Allocation SWOBX Schwab Balanced Inv
LARGE BLEND SWPPX Schwab S&P 500 Index
SMALL BLEND SWSSX Schwab Small Cap Index
LARGE GROWTH TGCNX TCW Select Equities N
Mid-Cap Growth TGDNX TCW Growth Equities N
EQUITY PRECIOUS METALS TGLDX Tocqueville Gold
LARGE BLEND TICRX TIAA-CREF Social Choice Eq Retail
LARGE GROWTH TIRTX TIAA-CREF Large-Cap Growth Retail
LARGE GROWTH TWCGX American Century Growth Inv
Muni National Interm TWTIX American Century Interm-T Tx-Fr Bd Inv
SHORT GOVERNMENT TWUSX American Century Short-Term Govt Inv
LARGE VALUE TWVLX American Century Value Inv
Foreign Large Value TWWDX Thomas White International
Foreign Large Growth UMBWX Scout International
SMALL VALUE VSFAX Federated Clover Small Value A
Mid-Cap Growth WTMGX Westcore MIDCO Growth
LARGE VALUE YAFFX Yacktman Focused

 

Asset Class Number of funds
Balanced Fund 21
REITs 2
Fixed Income 34
Commodity 1
Sector Fund 9
Foreign Equity 18
Emerging Market Equity 7
US Equity 41
Other 4
Total 137


As of Apr 5, 2011, this plan investment choice is rated as above 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 great (98%)
Fund Quality -- Rated as average (54%)
Portfolio Building -- Rated as great (86%)
Overall Rating: above average (80%)

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 6 asset SIB (Simpler Is Better) plan . This SIB plan has the following candidate index funds and their ETFs equivalent:

US Equity: SPY or VTI
Commodity: DBC
Foreign Equity: EFA or VEU
REITs: IYR or VNQ or ICF
Emerging Market Equity: EEM or VWO
Fixed Income: AGG or BND
Performance chart (as of Apr 5, 2011)

Performance table (as of Apr 5, 2011)

With six asset classes and a wide number of funds, the returns beat the six asset class benchmark. With high scores in all categories, this plan delivers portfolios that have produced strong historical returns.

Symbols: SPY, VTI, EFA, VEU, EEM, VWO, IYR, VNQ, ICF, AGG, BND, DBC, HYG, JNK, PHB, AOM, AOK, CIU, BIV, ITM, MUB, TFI, PZA, MLN, IYH, IXJ, VHT, XBI, PBE, DBR, RYH, EFG, IXP, PTE, DGG, LTL, MTK, PTF, DBT, RYT, ROM, GWL, PFA, IVE, IWW, JKF, VTV, ELV, PWV, RPV, SCHV, SCZ, EFV, PID, DWM, IYF, VFH, IPF, PFI, DRF, RYF, IFGL, RWX, TZE, TZG, TZI, TZO, TZL, IGOV, BWX, WIP, IVV, IYY, IWV, VV, DLN, RSP, SCHX, IOO, VT, SHY, SHV, VGSH, PLK, USY, IEV, VGK, PEF, DEB, IVW, IWZ, JKE, VUG, ELG, QQQQ, RPG, SCHG, IJJ, IWS, JKI, VOE, EMV, PWP, RFV, UVU, IJH, IWR, JKG, VO, MDY, EMM, PJG, DON, EZM, MVV, IJS, IWN, JKL, VBR, DSV, PWY, RZV, UVT, IJR, IWM, JKJ, VB, DSC, PJM, DES, SAA, UWM, SCHA, GMM, PXH, DEM, SCHE, GBF, LAG, PCY, CSJ, BSV, VCSH, ITE, IXC, IPW, DBE, RYE, DKA, IEI, VGIT, IJK, IWP, VOT, EMG, PWJ, RFG, UKW, IJT, IWO, JKK, VBK, DSG, PWT, RZG, UKK, TIP, DBP, EPP, VPL, GMF, PAF, AAXJ, DND, EWJ, JPP, PJO, DXJ, GSG, BIL

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.

Originally from the UK, Jenny Hollingworth lives with her husband and two sons in Northern California. She is a wife, mother, writer, theatre director, coffee drinker, avid reader, keen walker, movie watcher, Jane Austen lover and observer of life, in no particular order. MyPlanIQ has no formal relationship with Jenny Hollingworth.



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<![CDATA[Schwab Mutual Funds Beat out ETFs]]> l

Retirement investing is a "hair on fire" problem -- especially for baby boomers for whom retirement is a near and present danger. There is a real lack of consistent, unbiased information [...]

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]]> <![CDATA[Schwab Select ETF Plan Has Bright Prospects]]> Schwab ETF Plan Has Good Pedigree and Bright Prospects Retirement is now a "hair on fire" problem. There is much talk of working longer, downsizing, living on less. However, there is something you can do to help improve your risk adjusted returns. Look at your portfolios and plans to build a diversified portfolio with a systematic investment strategy.

This is not as hard as you might think -- to highlight this point, we feature a plan created by a non professional that matches up well with any of the other plans. Kevin Carr. is an individual investor who employs a long term strategy. He manages an individual common stock portfolio as well as many plans on MyPlan IQ.  If you have any questions regarding this plan please contact him.

This plan provides you with Schwab's experts’ top picks of low-cost ETFs representing approximately 50 ETFs, based on rigorous criteria including expenses, tracking error, trading volume, and more.  Schwab ETFs trade commission free.  There are no redemption periods so you can start today and not worry about holding periods.

We report on this Schwab ETF Select List which consists of 49 funds. These funds give exposure to 6 major assets: US Equity, Commodity, Foreign Equity, REITs, Emerging Market Equity, Fixed Income.

 

Asset Class Ticker Name
LARGE BLEND SCHX Schwab U.S. Large-Cap ETF
LARGE GROWTH SCHG Schwab U.S. Large-Cap Growth ETF
LARGE VALUE SCHV Schwab U.S. Large-Cap Value ETF
MID-CAP BLEND VO Vanguard Mid-Cap ETF
Mid-Cap Growth VOT Vanguard Mid-Cap Growth ETF
MID-CAP VALUE VOE Vanguard Mid-Cap Value ETF
SMALL BLEND SCHA Schwab U.S. Small-Cap ETF
Small Growth VBK Vanguard Small Cap Growth ETF
SMALL VALUE VBR Vanguard Small Cap Value ETF
LARGE BLEND SCHB Schwab U.S. Broad Market ETF
LARGE VALUE VYM Vanguard High Dividend Yield Indx ETF
Foreign Large Blend SCHF Schwab International Equity ETF
Foreign Large Growth EFG iShares MSCI EAFE Growth Index
Foreign Large Value EFV iShares MSCI EAFE Value Index
FOREIGN SMALL/MID GROWTH SCHC Schwab International Small-Cap Eq ETF
DIVERSIFIED EMERGING MKTS SCHE Schwab Emerging Markets Equity ETF
Foreign Large Blend VEU Vanguard FTSE All-World ex-US ETF
WORLD STOCK VT Vanguard Total World Stock Index ETF
EUROPE STOCK VGK Vanguard European ETF
DIVERSIFIED PACIFIC/ASIA VPL Vanguard Pacific Stock ETF
JAPAN STOCK EWJ iShares MSCI Japan Index
China Region GXC SPDR S&P China
Intermediate-Term Bond BND Vanguard Total Bond Market ETF
SHORT GOVERNMENT SCHO Schwab Short-Term U.S. Treasury ETF
Intermediate Government SCHR Schwab Intermediate-Term U.S. Trsy ETF
LONG GOVERNMENT TLH iShares Barclays 10-20 Year Treasury Bd
Inflation-Protected Bond SCHP Schwab U.S. TIPS ETF
Intermediate-Term Bond CIU iShares Barclays Intermediate Credit Bd
High Yield Bond JNK SPDR Barclays Capital High Yield Bond
WORLD BOND BWX SPDR Barclays Capital Intl Treasury Bond
Muni National Long MUB iShares S&P National AMT-Free Muni Bd
Consumer Discretionary XLY Consumer Discret Select Sector SPDR
Consumer Staples XLP Consumer Staples Select Sector SPDR
Equity Energy XLE Energy Select Sector SPDR
Financial XLF Financial Select Sector SPDR
Health XLV Health Care Select Sector SPDR
Industrials XLI Industrial Select Sector SPDR
Natural Resources XLB Materials Select Sector SPDR
Technology XLK Technology Select Sector SPDR
Communications IYZ iShares Dow Jones US Telecom
Utilities XLU Utilities Select Sector SPDR
COMMODITIES BROAD BASKET DBC PowerShares DB Commodity Index Tracking
Commodities Agriculture DBA PowerShares DB Agriculture
Commodities Precious Metals IAU iShares Gold Trust
Commodities Industrial Metals DBB PowerShares DB Base Metals
Commodities Energy USL United States 12 Month Oil
MISCELLANEOUS SECTOR PFF iShares S&P U.S. Preferred Stock Index
REAL ESTATE VNQ Vanguard REIT Index ETF


 

Asset Class Number of funds
Balanced Fund 0
REITs 1
Fixed Income 9
Commodity 5
Sector Fund 11
Foreign Equity 8
Emerging Market Equity 3
US Equity 11
Other 1
Total 49

Many are looking for access to a well rounded ETF plan through Schwab. This fills this hole and as Schwab makes more of their own funds available, it will be possible to move them into the plan. On this review, the only comment would be to add another REIT choice. The other asset classes have a good number of selections without being overwhelming.

As of Apr 4, 2011, this plan investment choice is rated as above 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 great (99%)
Fund Quality -- Rated as average (47%)
Portfolio Building -- Rated as average (56%)
Overall Rating: above average (66%)

Thehigh diversification score means that all the major and minor asset classes have been ticked. Fund quality is lower because some of the ETF's don't have a long history but that shouldn't impede the ability for the future.

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 6 asset SIB (Simpler Is Better) plan . This SIB plan has the following candidate index funds and their ETFs equivalent:

US Equity: SPY or VTI
Commodity: DBC
Foreign Equity: EFA or VEU
REITs: IYR or VNQ or ICF
Emerging Market Equity: EEM or VWO
Fixed Income: AGG or BND
Performance chart (as of Apr 4, 2011)

Performance table (as of Apr 4, 2011)

Portfolio Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe
Schwab ETF Select List Tactical Asset Allocation Moderate 9% 82% 8% 72% 12% 89%
Schwab ETF Select List Strategic Asset Allocation Moderate 14% 118% 3% 15% 4% 20%
Six Core Asset ETF Benchmark Tactical Asset Allocation Moderate 9% 81% 10% 82% 13% 89%
Six Core Asset ETF Benchmark Strategic Asset Allocation Moderate 14% 121% 4% 20% 7% 34%


This portfolio performs well against the six asset ETF benchmark

  • SAA provides lower volatility while albeit delivering lower historical returns but as more of the newer funds are applied to the portfolio, there will be more opportunity for closing the gap
  • The TAA portfolios run neck and neck over the five year period

In a future article, we will review performance over the last three months to see how the plan has performed in the light of recent events.

Kay Takeaways

  • Building a plan of funds is not the preserve of the few -- anybody who has the interest and application to research can provide well constructed plans
  • It is possible to benefit from those individuals while still having transparency and not being captive to any particular broker

Symbols: SPY, VTI, EFA, VEU, EEM, VWO, IYR, VNQ, ICF, AGG, BND, DBC, HYG, JNK, PHB, CIU, BIV, MUB, TFI, PZA, MLN, GII, PUI, DBU, RYU, UPW, IYH, IXJ, VHT, XBI, PBE, DBR, RYH, EFG, IXP, PTE, DGG, LTL, IYM, IGE, VAW, XLB, XME, PYZ, DBN, RTM, UYM, MTK, PTF, DBT, RYT, ROM, GWL, PFA, IVE, IWW, JKF, VTV, ELV, PWV, RPV, SCHV, EFV, PID, DWM, IYF, VFH, IPF, PFI, DRF, RYF, KXI, VDC, PSL, DPN, RHS, RXI, VCR, IYJ, EXI, VIS, IGOV, BWX, WIP, IVV, IYY, IWV, VV, DLN, RSP, SCHX, IOO, VT, SHY, SHV, VGSH, PLK, USY, TLT, TLH, IEF, EDV, VGLT, TLO, PLW, IEV, VGK, PEF, DEB, IVW, IWZ, JKE, VUG, ELG, QQQQ, RPG, SCHG, IJJ, IWS, JKI, VOE, EMV, PWP, RFV, UVU, IJH, IWR, JKG, VO, MDY, EMM, PJG, DON, EZM, MVV, IFSM, VSS, SCHC, IJS, IWN, JKL, VBR, DSV, PWY, RZV, UVT, IJR, IWM, JKJ, VB, DSC, PJM, DES, SAA, UWM, SCHA, GMM, PXH, DEM, SCHE, ITE, IXC, IPW, DBE, RYE, DKA, IEI, VGIT, IJK, IWP, VOT, EMG, PWJ, RFG, UKW, IJT, IWO, JKK, VBK, DSG, PWT, RZG, UKK, TIP, EPP, VPL, GMF, PAF, EWJ, JPP, PJO, DXJ, GSG

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.



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<![CDATA[Schwab Select ETF Plan Has Bright Prospects]]> Schwab ETF Plan Has Good Pedigree and Bright Prospects Retirement is now a "hair on fire" problem. There is much talk of working longer, downsizing, living on less. However, there is something you[...]

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<![CDATA[Six Versus Five SIB ]]> Life moves quickly. Already this year we have seen troubles in Egypt being supplanted by Tunisia and Bahrain. This was swept into the background by the triple disasters in Japan and now Libya grabs the headlines. All of this twists and turns markets all the while, we may worry about how that impacts our retirement as well as being caught up in the human tragedy.

One of the most glaring holes in our education system is retirement investing. As a result, we feel afraid and powerless and look to “big brother” to help out. Be aware that some of the biggest pension schemes in the country are failing with terrible returns. Many states are in real trouble because of the pension liabilities so they aren’t doing any better. As inflation bites, it is unlikely that these pension schemes will keep up. In any case, increasingly they are a thing of the past. 401K plans have moved from being an adjunct to a pension plan to being the mainstay of retirement income. In a study of over 800 mainly retirement plans, we noted that the majority of plans supported only three asset classes which is going to have a significant impact on the potential returns for the participant.

Asset Classes Number of plans
Three 59
Four 23
Five 14
Six 4


Sadly, only 4% of the plans we reviewed had the six asset classes to build the sort of portfolios necessary to optimize returns and minimize risk.

In a previous article we found reviewed historical simulations from a five asset class plan would, over a decade, put 75% more money in your pocket compared to a three asset plan which is the staple of most 401(K) plans. In this article, we are going to add commodities as another class to provide diversification protection.

We use a simple benchmark vehicle -- SIB -- simpler is better to show the potential difference in returns between the portfolios with different numbers of asset classes.

Each of the SIBs are built from one ETF per asset class. The ETFs we selected for these portfolios are as follows:

Asset Class Ticker Name
LARGE BLEND VTI Vanguard Total Stock Market ETF
Foreign Large Blend VEU Vanguard FTSE All-World ex-US ETF
DIVERSIFIED EMERGING MKTS VWO Vanguard Emerging Markets Stock ETF
REAL ESTATE VNQ Vanguard REIT Index ETF
COMMODITIES BROAD BASKET DBC PowerShares DB Commodity Idx Trking Fund
Intermediate-Term Bond BND Vanguard Total Bond Market ETF

So the three asset SIB has (VTI), (VEU) and (BND). The four asset SIB adds emerging markets (VWO). The five asset SIB adds Real Estate (VNQ). The six asset SIB adds commodities (DBC). Note that these ETFs were chosen arbitrarily. If you want to see a range of alternatives and their relative performance, MyPlanIQ maintains updated information on major ETFs in most asset classes.

Commodities can be volatile and some may have trepidation in owning this type of asset. ETF's which are broadly diversified reduce the volatility and don't rely on fund managers who can be hit or miss. In the coming years, commodities will be important and have already shown their value as inflation is an issue in emerging markets and will shortly start to arise more locally.

If we compare the historical returns between the five and six asset SIBs, we can see the benefit of adding the extra asset class.

Performance chart (as of Mar 2, 2011)

Performance table (as of Mar 2, 2011)

 

 

If we ignore the short term difference -- which are not insignificant -- and look at the five year returns we see a difference between five and six assets.. Note that the difference in returns between three and six asset SIB, over a decade -- puts more than twice the amount of money in your nestegg.

We also note that after starting the year very strongly, US Equities gave back much of their gains over the past month -- something that a portfolio with access to commodities and real estate mitigated to a large degree.

You may not have all the asset classes in your current 401K plan -- but if you have an IRA or the chance to rollover an old 401K into an IRA and assemble a six asset portfolio, you will thank yourself when you retire.

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.


Exchange Symbols:(NYSE,VTI),(NYSE, ,SPY),(NYSE,VEU),(NYSE,EFA),(NYSE,VWO),(NYSE,EEM),(NYSE,VMQ),(NYSE,IYR),(NYSE,BND),(NYSE,AGG),(NYSE,IEI),(NYSE,SHY),(NYSE,TIP),(NYSE,EFV),(NYSE,IWM),(NYSE,IWN),(NYSE,IWW),

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]]> <![CDATA[Six Versus Five SIB ]]> Life moves quickly. Already this year we have seen troubles in Egypt being supplanted by Tunisia and Bahrain. This was swept into the background by the triple disasters in Japan and now Libya grabs[...]

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<![CDATA[Fund Advice Lazy Portfolio Performs Well in Good Times -- Be Cautious in Choppy Markets]]> Retirement investing is a long term proposition and is similar to looking after your health – do what is sensible and have occasional checkups that become more frequent as you age. One of th[...]

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<![CDATA[Fund Advice Lazy Portfolio Performs Well in Good Times -- Be Cautious in Choppy Markets]]> Retirement investing is a long term proposition and is similar to looking after your health – do what is sensible and have occasional checkups that become more frequent as you age. One of the most glaring holes in our education system is retirement investing. As a result, we feel afraid and powerless and look to “big brother” to help out. Be aware that some of the biggest pension schemes in the country are failing with terrible returns . Many states are in real trouble because of the pension liabilities so they aren’t doing any better. As inflation bites, it is unlikely that these pension schemes will keep up. In any case, increasingly they are a thing of the past.

A simple portfolio (six ETFs – index funds – no fancy management – one fund for each of six different classes). over a five year period, buy and hold has returned 7% and a more active momentum strategy has returned 13%. This is a simple, easy to understand fund and investment approach that can be used as a benchmark for what others are telling you.

We are investigating and breaking down luminary portfolios for ideas and approaches to retirement investing to help gain understanding and experience.


The FundAdvice Ultimate Buy and Hold Portfolio is tracked by MarketWatch.com's lazy portfolios, maintained by Paul Farrel. The portfolio is very diversified in equity asset classes although corporate bonds are missing. The plan consists of 11 funds. These funds enable participants to gain exposure to 5 major assets: US Equity, Foreign Equity, REITs, Emerging Market Equity, Fixed Income.

 

Asset Class Ticker Original Portfolio Holdings
DIVERSIFIED EMERGING MKTS VEIEX 6%
LARGE BLEND VFINX 6%
Intermediate Government VFITX 20%
SHORT GOVERNMENT VFISX 12%
Inflation-Protected Bond VIPSX 8%
Foreign Large Value VTRIX 12%
Foreign Large Blend VDMIX 12%
SMALL BLEND NAESX 6%
SMALL VALUE VISVX 6%
LARGE VALUE VIVAX 6%
REAL ESTATE VGSIX 6%

 

Asset Class Number of funds Lazy Portfolio Percentage
Balanced Fund 0
REITs 1 6
Fixed Income 3 40
Commodity 0
Foreign Equity 2 24
Emerging Market Equity 1 6
US Equity 4 24
Other 6
Total 11


As of Mar 21, 2011, 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 average (48%)
Portfolio Building -- Rated as above average (72%)
Overall Rating: average (58%)

Portfolio Discussions

This is a well balanced portfolio with access to five asset classes. In the original, Emerging markets and Real Estate is underweighted and Commodities are not represented at all. We are going to compare the original portfolio with an ETF portfolio with standard Strategic Asset allocation and Tactical Asset allocation weightings.

The ETF Portfolio has:

(EEM) for emerging markets, (SPY) forlarge blend, (IEI) for the intermediate government bond, (SHY) for the short treasury, (TIP) for inflation protected bonds, (EFV) for foreign large blend, (IWM) for the small blend, (IWN) as small value, (IWW) for large value, (IYR) for real estate


SAA will have 40% in Fixed income and 15% in each of the other asset classes
TAA will have 40% in Fixed income and 30% in the two top performing asset classes

The ETF portfolio uses a simpler structure -- one ETF for each asset class -- VTI or SPY, VEU or EFA, VWO or EEM, VMQ or IYR, BND or AGG.

With any of these ETFs, we would expect the performance would be similar to the Mutual Fund versions because they have high trading volume. They don't have the same history as the Mutual Funds if you want to go back ten years.

Performance table (as of Mar 21, 2011)

Portfolio Performance Comparison

Portfolio Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe
FundAdvice Ultimate Buy and Hold Lazy Portfolio ETFs SAA
12% 87% 4% 18% 5% 20%
Fund Advice Ultimate Buy and Hold Lazy Portfolio 10% 72% 4% 15% 5% 21%
Five Core Asset ETF Benchmark Strategic Asset Allocation Moderate 12% 76% 5% 16% 5% 19%
Five Core Asset ETF Benchmark Tactical Asset Allocation Moderate 7% 42% 8% 60% 10% 63%
FundAdvice Ultimate Buy and Hold Lazy Portfolio ETFs TAA
5% 23% 6% 45% 8% 55%



What we can see is that the buy and hold strategies -- the original portfolio and the two strategic asset allocation portfolios -- were running neck and neck with the tactical portfolios until we started to hit significant market turbulence around 2007. Until the spring of 2009 the tactical portfolios were clearly ahead but as we came out of the recession, it's possible to see that the buy and hold strategies have closed the gap somewhat. This is a great way of understanding what the two approaches bring over the long term.

We note that the buy and hold strategies are virtually indistinguishable. The original portfolio has been well chosen in the sense that it is only rebalanced once a year and there is no rotation of sub-classes (for example between the different fixed income or US equity classes) and it has barely suffered at all. In a future article we will drill into the last few months and see whether moving some or all of the fixed income into cash has helped the two SAA portfolios squeeze out a little more of late.

We also not the difference between the two TAA portfolios. The Five asset benchmark with only one fund per asset class has outperformed the plan with multiple choices. Research has shown that rotating assets in subclasses can bring benefits but, in recent days, that hasn't proven to be the case with the exception of moving fixed income to cash. The simple benchmark plans have done remarkably well over the past five years.

The key takeaways are:

  • Over the longer term, when there have been downturns in the market, a tactical asset allocation strategy wins out
  • When the markets are doing well, buy and hold wins out
  • Be careful about asset class rotation -- it doesn't always give you the best returns
  • You have to be involved and aware to get the most out of your investments

We can expect choppy markets over the next few months and care should be taken as to which strategy is selected.

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.


Exchange Symbols:(NYSE,VTI),(NYSE, ,SPY),(NYSE,VEU),(NYSE,EFA),(NYSE,VWO),(NYSE,EEM),(NYSE,VMQ),(NYSE,IYR),(NYSE,BND),(NYSE,AGG),(NYSE,IEI),(NYSE,SHY),(NYSE,TIP),(NYSE,EFV),(NYSE,IWM),(NYSE,IWN),(NYSE,IWW),

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]]> <![CDATA[Employees in Sprint Nextel Dial up An Average 401K Retirement Plan]]>  

Sprint Nextel Corporation offers wireless and wireline communications products and services to consumers, businesses, and government users in the United States, Puerto Rico, and [...]

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]]> <![CDATA[Employees in Sprint Nextel Dial up An Average 401K Retirement Plan]]>  

Sprint Nextel Corporation offers wireless and wireline communications products and services to consumers, businesses, and government users in the United States, Puerto Rico, and the U.S. Virgin Islands. Sprint Nextel was founded in 1899 and is headquartered in Overland Park, Kansas. Recently, AT&T (T) announced its plan to acquire T-Mobile USA, putting enormous pressure to Sprint Nextel, ranked only as a distant the third largest mobile phone service provider in the U.S.

In this article, we review Sprint Nextel 401K Plan. We will discuss how participants in the plan can achieve reasonable investment results using asset allocation strategies. We will also discuss how those portfolios are positioned in today’s market environment.

Sprint Nextel 401K Plan's 401K plan consists of 29 funds. These funds enable participants to gain exposure to 4 major assets: US Equity, Foreign Equity, Emerging Market Equity, Fixed Income. Four Core Asset ETF (EM) Benchmark's 401K plan consists of 4 funds. These funds enable participants to gain exposure to 4 major assets: US Equity, Foreign Equity, Emerging Market Equity, Fixed Income.

The following table lists its fund choices:

Asset Class Ticker Name
LARGE VALUE TWEIX American Century Equity Income Inv
SMALL VALUE DFSVX DFA US Small Cap Value I
Mid-Cap Growth HAMGX Harbor Mid Cap Growth Instl
High Yield Bond PHIYX PIMCO High Yield Instl
WORLD BOND PFUIX PIMCO Foreign Bond
WORLD STOCK GMGEX GMO Global Equity Allocation III
SMALL BLEND IWM iShares Russell 2000 Index
Foreign Large Blend EFA iShares MSCI EAFE Index
LARGE BLEND SPY SPDR S&P 500
MID-CAP BLEND MDY SPDR S&P MidCap 400
Multisector Bond SMARX Brandes Separately Managed Acct Res Tr
Multisector Bond SMARX Brandes Separately Managed Acct Res Tr
Intermediate-Term Bond AGG iShares Barclays Aggregate Bond
ROOT CASH CASH
DIVERSIFIED EMERGING MKTS EEM iShares MSCI Emerging Markets Index
Foreign Large Blend VGTSX Vanguard Total Intl Stock Index Inv
LARGE GROWTH VWUSX Vanguard US Growth Inv
LARGE VALUE VIVAX Vanguard Value Index Inv
Target Date Funds
Northern Trust Corp

 

The list of minor asset classes covered by Sprint Nextel 401K Plan The list of minor asset classes covered by Four Core Asset ETF (EM) Benchmark
Diversified Emerging Mkts: EEM, GMM, PXH, DEM, SCHE
Equity: VTI, VT
Foreign Large Blend: EFA, VEU, GWL, PFA
High Yield Bond: HYG, JNK, PHB
Intermediate-term Bond: AGG, CIU, BIV, BND
Large Blend: IVV, IYY, IWV, VTI, VV, SPY, DLN, RSP, SCHX
Large Growth: IVW, IWZ, JKE, VUG, ELG, QQQQ, RPG, SCHG
Large Value: IVE, IWW, JKF, VTV, ELV, PWV, RPV, SCHV
Mid-cap Blend: IJH, IWR, JKG, VO, MDY, EMM, PJG, DON, EZM, MVV
Mid-cap Growth: IJK, IWP, VOT, EMG, PWJ, RFG, UKW
Multisector Bond: AGG, GBF, BND, LAG
Small Blend: IJR, IWM, JKJ, VB, DSC, PJM, DES, SAA, UWM, SCHA
Small Value: IJS, IWN, JKL, VBR, DSV, PWY, RZV, UVT
World Bond: IGOV, BWX, WIP
World Stock: IOO, VT
Diversified Emerging Mkts: EEM, GMM, PXH, DEM, SCHE
Foreign Large Blend: EFA, VEU, GWL, PFA
Intermediate-term Bond: AGG, CIU, BIV, BND
Large Blend: IVV, IYY, IWV, VTI, VV, SPY, DLN, RSP, SCHX

 

Asset Class Sprint Nextel 401K Plan Four Core Asset ETF (EM) Benchmark
Fixed Income 5 1
Sector Fund 0 0
Foreign Equity 3 1
Emerging Market Equity 1 1
US Equity 19 1
Other 1 0
Total 29 4

 

As of Mar 21, 2011, Sprint Nextel 401K Plan investment choice is rated as average and Four Core Asset ETF (EM) Benchmark 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:

Attribute Sprint Nextel 401K Plan Four Core Asset ETF (EM) Benchmark
Diversification above average (83%) poor (8%)
Fund Quality below average (15%) poor (8%)
Portfolio Building average (59%) below average (20%)
Overall Rating average (53%) below average (13%)

 

The chart and table below show the historical performance of moderate model portfolios employing strategic and tactical asset allocation strategies (SAA and TAA , both provided by MyPlanIQ). For comparison purpose, we also include the moderate model portfolios of a typical 4 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
Emerging Market Equity: EEM or VWO
Fixed Income: AGG or BND

Performance chart (as of Mar 21, 2011)

Performance table (as of Mar 21, 2011)

Currently Commodities, Real Estate and US Equity are doing well. Only US Equity is available to Sprint Nextel 401K Plan participants.

To summarize, Sprint Nextel offers its employees average rated fund choices. It has strong fixed income funds or portfolios. Some low cost funds such as DFA index fund or S&P index funds are good portfolio building blocks. Actively managed funds such as American Century Equity Income (TWEIX) or GMO Global Equity Allocation (GMGEX)  have been outstanding. The plan can extend its diversification by offering further funds in major asset classes such as REITs as well as some high quality actively managed equity funds.


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.

Symbols:S,T,SPY,VTI,EFA,VEU,EEM,VWO,AGG,BND,VT,HYG,JNK,PHB,CIU,BIV,GWL,PFA,IVE,IWW,JKF,VTV,ELV,PWV,RPV,SCHV,IGOV,BWX,WIP,IVV,IYY,IWV,VV,DLN,RSP,SCHX,IOO,IVW,IWZ,JKE,VUG,ELG,QQQQ,RPG,SCHG,IJH,IWR,JKG,VO,MDY,EMM,PJG,DON,EZM,MVV,IJS,IWN,JKL,VBR,DSV,PWY,RZV,UVT,IJR,IWM,JKJ,VB,DSC,PJM,DES,SAA,UWM,SCHA,GMM,PXH,DEM,SCHE,GBF,LAG,IJK,IWP,VOT,EMG,PWJ,RFG,UKW,TWEIX,DFSVX,HAMGX,PHIYX,PFUIX,GMGEX,

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]]> <![CDATA[The Ins and Outs of Total Market ETFs]]> ]]> <![CDATA[People@Work: Jimmy John's Failed Union Vote Highlights Plight of Fast-Food Workers]]>

Low pay, lack of benefits and other issues drove Ayo Collins and three other Jimmy John's workers to enlist the aid of the Chicago-based Industrial Workers of the World to help organize 10 targeted Minneapolis stores. The effort fell short, by a vote of 87 to 85.

Continue reading People@Work: Jimmy John's Failed Union Vote Highlights Plight of Fast-Food Workers

People@Work: Jimmy John's Failed Union Vote Highlights Plight of Fast-Food Workers originally appeared on DailyFinance on Mon, 25 Oct 2010 08:30:00.

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<![CDATA[U.S. stocks in March posted their best monthly gain since 1991]]> <![CDATA[Why It’s Important to Evaluate Your ETFs]]>