2011 401k Design Scans Quick Look Data

Last year I was late in getting the 2010 Top 10 401k Plan data posted for the 280 401k Plans scanned. This year I decided to post "quick look" data for the Top 10 401k Plans in the form of a design scan for just those 10 plans Balanced portfolios and compare that data to the Hewitt Index portfolio design scan posted in January 2010. As you might expect the Top 10 portfolios and the Hewitt Index portfolio have similar Balanced portfolio returns but with lower volatility if you assume the 401k portfolios are independent. I very much doubt that because PTTRX, for example, is in almost all of them. Also, as a reminder of how important rebalancing is the top 401k Plan the last two years was from Compass Minerals International but their stock CMP had a poor 2011 and is unlikely to repeat again in 2012.

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.