Cummins Inc. 401k (RSP) Plan PSDS Scan 12-31-2010

The Cummins 401k Plan has been helped tremendously by company stock CMI the last 5 years. They are an Indiana manufacturer of engines used in many industries around the world and their stock has a 5yr APR of 39.2% with a Sharpe ratio of 0.476 in spite of high volatility. Remarkable. The Balanced portfolio has a 5yr APR of 9.16% with a Sharpe ratio of 0.73 and that puts this 401k Plan way above average. Happy New Year everyone.

PG&E Corp. 401k (RSP) Plan PSDS Scan 12-31-2010

The PG&E 401k Plan made several changes since the last scan in 2009. They replaced asset allocation funds with Target Date Retirement funds and added a few new core investment options. As I read the 11-k report they also replaced the complicated stable value fund option with a money market fund in August 2011. The Plan continues to be helped by company stock PCG and the Balanced portfolio invested 11.8% of that portfolio in the stock. Like last year this conservative plan Balanced portfolio 5yr return, 4.58%, is a little below average. Company stock is still the best equity option in the Plan in my opinion.

Manitowoc 401k (RSP) Plan PSDS Scan 12-31-2010

The Manitowoc 401k has several good investment options but company stock MTW was not one of them the last 5 years. It was a victim of volatility with a 5yr average return of 33.6% but an annualized return of only 1.42% as volatility killed compounding once again. The Balanced portfolio has a 5yr return that is about average with a Sharpe ratio of 1.38. However, as you can see it is a lifeboat portfolio with only 3 investment options having more than 5% of Plan and they are all income investment options. There is not much more to say.

Williams Companies 401k (IPP) Plan PSDS Scan 12-31-2010

The Williams 401k Plan was not helped by company stock WMB the last 5 years but still had a slightly above average Balanced portfolio return with a 5yr APR of 6.08% and a Sharpe ratio of 1.38. That portfolio's three largest holdings were PTTRX, the Fidelity stable value fund FMIP2 and FFFAX the Fidelity Freedom Income Fund. Target Date Retirement Income Funds have out performed all the Target Date Funds in every Plan I have scanned (several hundred) but employees invest very little in them. If you are near retirement I suggest you pay more attention to fund performance than fund name.

EQT Corp. 401k (SPP) Plan PSDS Scan 12-31-2010

The EQT 401k Plan Balanced portfolio improved a little over last year but the stock EQT 5yr APR went down a bit. The Balanced portfolio 5yr APR of 7.0% with a Sharpe ratio of 1.27 is above average and the largest holding is the bond fund PTTRX. The employee portfolio's 3 largest holdings were company stock EQT, the stable value fund FMIP2 in the scan and an equity fund AGTHX. There were no big changes to the Plan options over last year. A good plan and a pretty good but not great company stock.

State of Texas 401k (457) Plan PSDS Scan 12-31-2010

The Texas 401k (457) Plan closed its stable value fund option to new investments in 2009 and it is not in the scan this year. The Balanced portfolio's three largest holdings are the money market fund VMMXX in the scan, a bond index fund AGG and a target date retirement fund WOTDX. I have no information on employee asset allocation and posted a uniform portfolio for comparison purposes. The Balanced portfolio 5yr APR is 4.86% a little below average again this year. The Plan might consider a good Sector fund like an emerging market or commodity investment option.

2011 Sharpe Stock Portfolio PSDS Scan 12-31-2010

This year two stocks MCD and CHD carried my portfolio while BRK and the Mutual Funds were off their 2010 highs. In 2011 YTD they out performed GLD too, Merry Christmas everyone.

Energen Corp. 401k (ESP) Plan PSDS Scan 12-31-2010

The Energen 401k Plan was last scanned in 2008. The employee portfolio now has 46.6% of their money invested in company stock EGN. The Balanced portfolio has only 2% in the stock because it is very volatile and that kills compounding. The 5yr average APR for EGN is 16% but the annualized 5yr APR is only 7% and the Sharpe ratio is 0.094. The investment options are still all Vanguard funds the Balanced portfolio is a little below average with a 5yr APR of 4.75% and a Sharpe ratio of 1.15. A pretty good plan and company stock is above average but volatile.

Ecolab Inc. 401k (SP) Plan PSDS Scan 12-31-2010

The Ecolab 401k Balanced portfolio was helped a little by company stock ECL and it invested 3.9% of the portfolio in the stock. That stock is the largest holding by far in the employee portfolio. In the scan proxies for the SSgA Target Date Funds were used that have 5yr market data. They were FFFAX and FFFCX from Fidelity. There are several good investment options in the Ecolab 401k and company stock has done well the last five years.

United Technologies 401k (DC) Plan PSDS Scan 12-31-2010

Effective 1-1-2011 United Technologies overhauled its two 401k Plans and cut the number of investment options from 19 to 9. They also replace Fidelity with Aon Hewitt and switched to index investment options instead of mutual funds making plan simplicity a high priority. State Street Global Advisiors now manages 5 core funds that are all index funds. After reading the SEC 11-k report and other sources I think these 9 options in the scan are representative;

SSgA Core Index Funds - SPY, IWV, MDY, DIA, GLD (or AGG)
SSgA Target Date Funds - LTAIX, etc.
AllianceBernstein Asset Allocation Index - ACG
Stable Value Fund - SVF.hpx (Heuler Index)
Company Stock - UTX

The GLD option is my choice for a currency index but most would probably use AGG or another income index fund. Its Xmas time. The Balanced portfolio APR of 9.39% changes to 5.17% if you use AGG instead of GLD. All in all a good 401k plan but very different from last year and still helped by company stock.

BorgWarner 401k (RSP) Plan PSDS Scan 12-31-2010

The BorgWarner 401k Balanced portfolio got a big lift from company stock BWA this year. It was up 117% in 2010 according to Morningstar. That produced a 5yr Balanced return just over 6% and the employee portfolio 5yr APR was 7.73% as Detroit rebounded. This 401k Plan has very few investment options and the Blackrock US Debt Index, FUNDF in the scan, is one of them. It is also in the US Government 401k (TSP) Plan and it is the largest holding in the BorgWarner Balanced portfolio. All in all a good small plan and a very good stock the last five years.

PACCAR 401k (SIP) Plan PSDS Scan 21-31-2010

The PACCAR 401k Balanced portfolio was helped by company stock PCAR again this year and it remains a volatile stock with an off the chart STD of 41.11%. The stock is still the largest holding of the employee portfolio by far with the next two largest holdings being FCNTX and the stable value trust fund FMIP2. There were a few changes in the Plan investment options and one of them, FASIX, is in the Balanced portfolio at 8.6% of the portfolio. PTTRX remains the largest holding. A good plan and a good but volatile company stock.

APTARGROUP 401k (PSSP) PSDS Scan 12-31-2010

The APTARGROUP 401k Balanced portfolio invested 13% of the Plan in company stock ATR this year. It did very well in 2010 and has a 5yr APR of 14.4% with a 5yr Sharpe ratio of 0.526. There were very few changes in investment options and the scan this year included the Fidelity stable value trust fund FMIP. The Balanced portfolio 5yr APR of 6.41% is above average. This is a good 401k Plan helped by company stock this year.

IRA 2012 Portfolio Design Study 12-31-2010 Data

This is a work in progress and will change during year end testing. The Blog is a convenient way to interact with others involved in the review process.

A Reed Elsevier Roth 401k Rollover Portfolio Scan 12-31-2010

The Reed Elsevier US Salary Investment Plan has a Roth 401k Rollover Elections form on the Web. It caught my attention and here is a portfolio design scan for those Elections or a proxy if they do not yet have 5yr data. In the scan only the Target Date Funds, Income and 2020 are in the scan for the usual reasons, they are highly correlated by design. Many 401k Plans limit participants to one or two TDFs for the same reason. In the scan the US Government 401k (TSP) Target Date Funds for Income & 2020 are proxies.

SSgA Yield Enhanced Fund...................................SSHYX
SSgA Bond Market Index Fund.............................SSBMX
SSgA Target Retirement Income Fund....................L-inc
SSgA Target Retirement 2020 Fund........................L2020
Dodge & Cox International Fund......................DODFX
SSgA S&P 500 Index Fund..............................SVSPX
Domini Social Equity Fund.......................................DSEFX
SSgA Russell 2000 Index Fund................................IWM
Hartford Midcap HLS Fund.....................................HIMCX
Smith Barney Large Cap Growth..............................TLGUX
American Funds Fundamental Investors Fund...........ANCFX
SSgA Emerging Markets Fund.................................SSEMX
Hartford Small Company HLS Fund.........................MDY
SSgA Daily EAFE....................................................EFA
American Funds New Perspectives...........................ANWPX

The Balanced portfolio by rule only contains investment options with a positive 5yr Sharpe ratio and a few funds like DSEFX have 0% invested in them. The Balanced portfolio 5yr APR is 6.62% which is above average but the STD volatility risk is probably too high for some retirees. I found this rollover form an efficient and interesting way to define Roth 401k options for employees.

Marsh & McLennan 401k (SIP) Plan PSDS Scan 12-31-2010

The Masrsh & McLennan 401k was last scanned in 2008. Since then the Balanced portfolio has improved to a 5yr APR of 5.41% with a Sharpe ratio of 2.01 and it is still a lifeboat portfolio. It has over 70% invested in the GIC and the bond fund PTTRX. The employee portfolio includes money in company stock MMC and a large GIC. According to the SEC 11-k report those two options amounted to 0.5% of a large Master Trust that holds money for several retirement plans. I included those two investment options in the scan this year. The employee portfolio's largest holding is collectively the LifePath Target Date funds represented by STLAX and STLCX in the scan. That is a trend I see more often in 401k plans now. All in all a good Plan but not a very good company stock the last 5 years.

Cytec Industries 401k (ESP) Plan PSDS Scan 12-31-2010

The Cytec 401k Plan was not helped by company stock CYT which has a 5yr APR of 3.05% and a barely positive Sharpe ratio of 0.004. Cytec is large specialty chemicals company that also makes composite materials for Boeing and other aerospace companies. The Plan is small and Vanguard is the trustee I think. The SEC 11-k report only provided investment options at the category level and I used Vanguard funds mostly in the design scan. The Balanced portfolio three largest holdings are VRST the stable value fund, a bond fund VBIIX and VBINX a balanced fund. The employee portfolio largest holdings are company stock CYT, VRST and VBINX. A good plan and a company that provides specialty materials and processes to several industries.