A SharpeStockPortfolio PSDS Scans 12-31-2009

3 Year Period

5 Year Period

10 Year Period

One of the benefits of scanning company 401k plans is finding what I call SharpeStockPortfolios that have positive 3yr, 5yr and 10yr Sharpe ratios. There are more of them than I first thought and in this posting 12 of them were used to demonstrate that a prudent investor dosen't have to put his money in stable value investments to do well even in Black Swan markets.

Another interesting finding for me was that over 5 and 10 year periods a uniform asset allocation for this SharpeStockPortfolio was very close to the Balanced portfolio and even over a 3 year period they were close. That makes rebalancing cheaper and less important than for other portfolios I have scanned. I own 3 of the stocks in the portfolio Berkshire Hathaway, Church & Dwight and McDonalds.

FMC Technologies 401k (SIP) PSDS Scan 12-31-2009

This plan was definitely helped by company stock FTI and the Balanced portfolio invested 9.2% of the plan in the stock and the employee portfolio had 51.4% in the stock. Thats too much but the employees of oil and gas companies do that often. The two largest holdings in the Balanced portfolio were the cash portfolio SIGVX in the scan and the bond fund PTTRX. All in all a good plan with 8 investment options in the Balanced portfolio including the volatile stock FTI.

Colgate-Palmolive 401k (SIP) PSDS Scan 12-31-2009

The last scan for the Colgate-Palmolive plan was 6-31-2008 just before the 2008 crash began to change everthing. I only posted the 2D scan image back then and it is worth looking at if you have the time. Today the Balanced portfolio is helped a lot by company stock CL which has great 5yr and 3yr data in spite of 2008. That portfolio has 6 investment options and the GIC is the largest holding. The employee portfolio has company stock as its largest holding at 21.4% of plan and the GIC is its second largest holding.

National Oilwell Varco 401k (RSP) PSDS Scan 12-31-2009

The plan was helped by company stock NOV but it is volatile as the correlation chart shows. The Balanced portfolio had 6.2% of the portfolio in the stock and the top holding PTTRX had 28.0% invested in that bond fund. The fixed income and short term investment funds were represented by SSHIX in the scan and it was the second largest holding. The employee portfolio invested 14.1% of the portfolio in company stock and their portfolio 5yr APR = 6.81% also had a positive 5yr Sharpe ratio of o.35. All in all a good plan but as of 12-31-09 still a lifeboat Balanced portfolio.

Tyco International 401k (RSIP) PSDS Scan 12-31-2009

This plan was not helped by company stock TYC and the Balanced portfolio invested most of the plan in a GIC and interest bearing cash SIGVX in the scan. The employee portfolio's largest holding on 12-31-09 was FDGRX and that portfolio had 3.0% invested in company stock. As the 3D scan image shows the Balanced portfolio is another lifeboat portfolio.

FMC Corp. 401k (SIP) Plan PSDS Scan 12-31-2009

The Balanced portfolio invested 11.0% of this plan in company stock FMC and the employee portfolio has 35.2% in company stock. Normally I would say thats way too much but FMC was one of the first Patran customers about 30 years ago and I cannot be objective in this case. The plan has 15 investment options in the Balanced portfolio more than most and it is one of the better ones I have seen. It has a stable value fund FMIP2, a money market fund FGRXX and the ever popular PTTRX bond fund. They and FMC stock are the largest holdings of the Balanced portfolio.

Lubrizol 401k (PSSP) Plan PSDS Scan 12-31-2009

This plan was helped by company stock LZ and the Balanced portfolio has 7.4% of the plan in the stock and the employee portfolio has 18.5% invested in the stock. I have owned the stock in the past but as a retiree it is a bit too volatile for my IRA. The largest holding in both portfolios is the stable value fund SVF.hpx in the scan. The SSgA Target date funds do not yet have 5yr data and the US Gov 401k plan target date funds were used in the scan. The international small cap fund in the plan was represented by FISMX which has 5yr data.

Dominion Resources 401k (SSP) Plan PSDS Scan 12-31-2009

The Balanced portfolio for this plan has company stock D as its second largest holding and the bond fund MIIDX as its largest holding. The plan has no stable value fund or money market fund and continues to do well. The employee portfolio has 48.2% of their money in company stock D by far their largest holding. In the scan this year I used VHGEX instead of AEPGX as the proxy for the Capital Research & Management international equity fund as the plan advisor is Vanguard. This year the Balanced portfolio has a few Vanguard Target date funds and the employee portfolio has even more.

General Growth Properties 401k (SP) PSDS Scan 12-31-2009

I design Balanced portfolios for 401k plans to demonstrate that over 5yr periods all plans with SEC 11-k reports that I have scanned have a portfolio with a positive 5yr return. That even includes plans for companies in Chapter 11 bankruptcy like General Growth Properties whose stock GGP still trades every day. A bankruptcy court recently approved their disclosure statement and they expect to emerge from Chapter 11 bankruptcy in October. I own no GGP stock and have no interest in the company.

The Balanced portfolio for their 401k plan has the stable value fund VRST in the scan and the money market fund VMMXX as its 2 largest holdings with small amounts in 7 other investment options. As you can see in the 2D scan chart the company stock has been extremely volatile and the employee portfolio with 9.8% invested in the stock has "off-the-chart" volatility. I had to change the font on the STD axis to display the employee portfolio which has a small positive return. This company stock was up 810.85% in 2009 but the 5yr compound annual return was a negative APR = -4.78%. Volatility kills compounding.

Zep Inc. 401k Plan PSDS Scan 12-31-2009

The company stock ZEP does not have 5yr data and is not in the scan. There were a few changes in the plan investment options but the result is still a lifeboat Balanced portfolio with the two largest holdings being the Schwab money market fund SWVXX and the PIMCO bond fund PTTRX. In the scan AGG is a proxy for a US Bond Index fund and the Dow Jones Target Date funds without 5yr data were represented by Vanguard funds for 2015, 2025 and 2035. The employee portfolio had almost no money in the money market fund which increased portfolio volatility. The 3D scan image shows incremental improvement over last year.

Flowers Foods 401k (RSP) PSDS Scan 12-31-2009

This is a small plan but a quite good plan helped by company stock FLO. The Balanced portfolio invested 17.1% of the plan in the stock and the employee portfolio had 17.0% invested in the stock. I found that interesting. The plan trustee is Putnam and their stable value fund SVF.put in the scan was the largest holding in the Balanced portfolio which had a 5yr APR = 6.53% with a Sharpe ratio of 1.15 and low volatility STD = 3.41%.

A Schwab 457 (PCRA) Plan PSDS Scan 12-31-2009

This deferred compensation 457 plan was created from the Schwab Mutual Fund OneSource Select List posted on the Web. The list has over 100 funds and I selected 12 that have positive 5yr Sharpe ratios for the scan. My focus is on investments for younger employees at Blacktstone Audio where several of my grandchildren work. The 2 largest holdings in the Balanced portfolio are a PIMCO fund PTTDX and a Schwab GNMA fund. The aggressive portfolio allocation is growth focused and includes an emerging market option SSEMX.

O'Reilly Automotive 401k (PSSP) PSDS Scan 12-31-2009

This automotive parts company stock ORLY has done well the last 5yrs and it is in the Balanced portfolio at 7.7% of the portfolio. The employee portfolio has invested 39.7% of their money in the stock which is their largest holding by far. The Balanced portfolio largest holding is the stable value fund SVF.hpx in the scan and the portfolio contains 11 investment options as shown in the 3D scan image. All in all a good plan helped by company stock which is up 24% YTD.

BorgWarner 401k (RSP) Plan PSDS Scan 12-31-2009

A lot has changed since the October 2008 scan of ths plan. The scan now has a stable value fund and markets have fallen around the world especially in Detroit. The Balanced portfolio is now a lifeboat portfolio and has a 5yr APR = 4.96 instead of 8.76%. The employee portfolio has 14.0% invested in company stock BWA and a portfolio 5yr return of only 3.61%. On a positive note company stock had a great 2009 and is up 31.4% YTD in 2010. Things are looking a bit better.

Rite Aid 401k Plan PSDS Scan 12-31-2009

The Rite Aid plan needs a make over. The trustee T. Rowe Price has many good funds but none of them are in the plan and company stock RAD is stll double digit negative. The Balanced portfolio has over 90% of the plan in the GIC and PTTRX. On the plus side the company is stll in business and the plan has improved slightly compared to last year.

Sigma-Aldrich 401k (RSP) Plan PSDS Scan 12-31-2009

The Sigma-Aldrich plan was helped by company stock SIAL and the Balanced portfolio invested 7.3% of the portfolio in the stock. The employee portfolio has 13.6% invested in the stock with a 5yr APR = 4.98% and a positive Sharpe ratio. The Balanced portfolio has 14 of the plan investment options in the portfolio with the stable value fund FMIP2 in the scan the largest holding. The largest holding in the employee portfolio is FCNTX a bit of a surprise if you look at the correlation chart. The Balanced portfolio only put 2.4% of the plan in that fund.

Lincoln National 401k Plan PSDS Scan 12-31-2009

This plan was not helped by company stock LNC which has a 5yr APR = -8.77% and it is not in the Balanced portfolio. The investment options are mostly Delaware funds but the plan has invetsment options from Vanguard, Harbor, American and Dodge & Cox. The Balanced portfolio largest holding is the GIC and it is the largest employee portfolio holding as well. The employee portfolio's second largest holding is company stock LNC at 17.9% of their portfolio and that hurt 5yr performance. There are 12 investment options in the Balanced portfolio which has a 5yr APR = 4.63% with a positive 5yr Sharpe ratio. In the scan several proxies were used for Delaware funds that do not yet have 5yr data.