Cliffs Natural Resources 401k (RSP) PSDS Scan 12-31-2011

Cliffs Natural Resources company stock CLF did not have a good 2011 and the Balanced portfolio 5yr APR is down to 4.77% this year. That portfolio's largest holdings are the stable value fund SVF.hpx in the scan, PRRXX the money market fund, RPSIX an income fund and company stock CLF the only equity option in the portfolio. The employee portfolio's largest holding by far is company stock at 42% of Plan. The plan is about average and company stock CLF is well above average but very volatile.

Honeywell 401k (S&OP) Plan PSDS Scan 12-31-2011

The Honeywell 401k Plan and company stock HON performance improved a little over last year but the Balanced portfolio remains a lifeboat portfolio. The Plan trustee is State Street with ING still the record keeper. I changed the Target Date funds to Vanguards in this scan and VTINX is one of the investments over 5% of the Balanced portfolio. The top 3 holdings of the Balanced portfolio are the GIC (61.9%), VBISX (18.2%), and VFICX (10.0%). The largest holding in the employee portfolio is still company stock. A good plan but a little below average returns the last 5 years.

Rebalanced RJF IRA Portfolio PSDS Scan 12-31-2011

Last year the PEG ratio for Caterpillar stock CAT was down to 0.59 and it was added to the RJF IRA portfolio in this scan. The rebalancing used 12-31-2011 5yr Market data from Thomson-Reuters and the portfolio has done well so far in 2012. I used a 5yr covariance matrix for the portfolio to study interactions among the 14 investment options in the portfolio. The 3 most volatile investments are CAT, OXY and FLPSX and the 3 least volatile are TPINX, PRPFX and CHD. The Balanced portfolio STD computed using the covariance matrix is about twice as high as the scan STD which assumes all options are independent. That assumptions has no effect on the 5yr APR. More on that in a Tech Note I am writing.

Chevron 401k (ESIP) Plan PSDS Scan 12-31-2011

Chevron's 401k and stock CVX continue to do well but the Balanced portfolio invested only in income funds except for 7.8% invested in company stock. The employee portfolio invested over 50% of that portfolio in company stock again this year. This plan is one of my favorites and I have owned over the years many of the Plan investment options but the last 5 years have not been kind to equity funds. VINIX for example has top 10 holdings that include Apple and other outstanding stocks but the funds 5yr return is slightly negative. The employee portfolio looks good to me but I would reduced the CVX holding a bit if you are near retirement.

Mylan 401k (PS) Plan PSDS Scan 12-31-2011

The Mylan 401k Plan was not helped by company stock MYL the last 5 years. The Plan also changed Trustees and now has several SMA funds. The Plan income options are very good and the Balanced portfolio invested almost all of the portfolio in them; a stable value fund SVF.hpx in the scan and two bond funds PTTRX and VBMFX. The Merrill Lynch Retirement Preservation Trust is now controlled by the Bank of America National Association BANA in other Plans and I believe it is the case here too. I just went through that issue with another 401k Plan and used the Heuler stable value fund index in that scan. The company did a good job of documenting recent Plan changes; its the SMA equity options that did not perform well the last 5 years.

Oracle 401k (SIP) Plan PSDS Scan 12-31-2011

This year the Oracle 401k scan results may surprise a few. While company stock ORCL and the bond fund PTTRX have about the same return the last 5 years, 2011-2007, the Balanced portfolio invested only 3.7% in the stock because of its high volatility. The Balanced portfolio invested 21.7% in PTTRX and 26.2% in the Galliard stable value fund WFSVF in the scan. The 401k Plan changed a few investment options, Vanguard is now providing the Target Date Funds and a few other funds. The Oracle Plan is a little above average.

Valero Energy 401k (TP) Plan PSDS Scan 12-31-2011

The Trustee for the Valero Energy 401k Plan is now the Bank of American National Trust BANA. It was Merrill Lynch. The Plan SEC 11-k report still shows a Retirement Preservation Trust as its second largest holding. You may want to read the Federal Register Volume 76 Number 219 Monday November 14, 2011 Notes for a detailed risk analysis. I kept that Trust investment in the scan as the Heuler stable value fund index. Company stock VLO was down in 2011 and is not in the Balanced portfolio but it remains the largest holding in the employee portfolio. On a positive not the stock is up over 10% YTD.

Core Laboratories 401k (PSRP) PSDS Scan 12-31-2011

Core Laboratories is an oil and gas services company based in the Netherlands with US operations in Houston. Company stock CLB continued to do well in 2011 and the 401k Balanced portfolio invested 8.3% of that portfolio in company stock. The employee portfolio invested 34.9% of their money in the stock. The top 2 holdings of both portfolios are CLB and the stable value fund SVF in the scan but with the Balanced portfolio is much more conservative by design. As you probably know my interest in doing these scans is employees in or near retirement.

United Technologies 401k (DC) Plan PSDS Scan 12-31-2011

United Technologies company stock UTX was down 4.78% in 2011 and its 5yr APR dropped to 5.51% in this scan. That and a weak 2011 for many mutual funds reduced the Balanced portfolio APR to 4.83%. Last years scan reflected the Plans 2011 reduction of investment options from 19 to 9 and several other Plan changes. This scan's investment options are the same except for correcting GLD to AGG as it should have been last year. Gold was not one of the 5 core SSgA fund options but it is in my retirement portfolio.

Perrigo Co. 401k (PSIP) Plan PSDS Scan 12-31-2011

Perrigo is a global generic pharmaceutical company whose stock PRGO continues to soar. The Balanced portfolio this year invested 19.4% of the portfolio in company stock; that is more than the employees invested in the stock. Their 3 largest holdings are PTTRX. MACGX and PRGO at 11% of Plan. The Balanced portfolio also invested 16.9% in VIPSX and that makes me a little less nervous about the surprisingly large investment in PRGO. This is a good 401k with several excellent investment options and one extraordinary company stock the last 5 years.

Whirlpool 401k (RP) Plan PSDS Scan 12-31-2011

It has been 2 years since the last Whirlpool 401k scan and a lot has changed. The investment options are all Vanguard investments now and company stock WHR that has not done well the last 5 years. The Balanced portfolio has most of that portfolio in 3 income funds, VRST5 has 48.3%, VBMFX has 23.8% and the money market fund VMMXX has 17.0%. Compare that to the employee portfolio in the 3D scan image. If you are near retirement the employee portfolio has way too much volatility risk in my opinion. The Vanguard funds are not bad but 2011 and the last 5 years have not been kind to very many mutual funds.

Becton Dickinson 401k (SIP) PSDS Scan 12-31-2011

Beckton Dickinson company stock BDX was down 9.61% in 2011 and the Balanced portfolio is now even more of a lifeboat portfolio than last year. In the scan Federal Reserve data was used to extend BIL to a 5yr data period and CWI is a proxy for the SSgA "ACWX" mutual fund. The largest holding of both the Balanced portfolio and the employee portfolio is the GIC. That about says it all for this year. The Plan could use a few "5 Star" equity investment options.

Alliance Data Systems 401k (RSP) PSDS Scan 12-31-2011

Alliance Data Systems had a good 2011 and their 401k Plan Balanced portfolio invested 6.5% of the Plan in company stock ADS, more than the employee portfolio. Like the previous scan for Amazon's 401k the Plan equity options did not do well the last 5 years. In the Alliance Data Systems 401k Plan none of their Plan equity options have any money invested in them because they do not have positive 5yr Sharpe ratios. This may happen a lot this year, company stocks outperforming their Plan equity options the last 5 years because 2011 was not a good year for most mutual funds.

Amazon 401k (SP) Plan PSDS Scan 12-31-2011

This year the Amazon 401k Plan scan includes company stock which has a positive 5yr Sharpe ratio. The stock however is very volatile as Mr. Market demonstrated again this week. The Balanced portfolio invested 15.2% of that portfolio in the stock and the rest in PTTRX at 63.6%, VTINX at 20.8% and less than 1% in VEXPX. Company stock is the largest holding of the employee portfolio according to the US DoL Form 5500 filing. This 401k Plan with company stock will be a contender for one of the Top 401k Plan spots next year. Interesting to me is the 3D scan image which has 2 lifeboats; one dominated by income funds only and one with company stock AMZN which has the highest Sharpe ratio 0.68. That does not happen often and usually the lifeboat portfolio without equity options has the highest Sharpe ratio.

Compass Minerals Intl. 401k (SP) Plan PSDS Scan 12-31-2011

Compass Minerals Intl. 401k still has an above average 5yr APR of 6.76% in spite of company stock CMP having a bad year in 2011; it was down minus 20.9%. Even so CMP has a 5yr APR of 19.7% with a positive Sharpe ratio of 0.65. It is the only equity investment option in the Balanced portfolio. That is not good. The employee portfolio has lots of money in Target Date Retirement funds that are still trying to recover from 2008. FFFAX is a retirement income fund not a Target Date fund. In that same recovery mode are the S&P500 and FUSEX that have both been disappointments the last 5 years. This 401k Plan was the top rated plan the last two years with only one equity option CMP in the Balanced portfolio. Interesting.