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Introducing the ABC Retirement Solutions Asset Allocation Models

Income 100% Fixed Income. Moderate Income 75% Fixed Income / 25% Stock. Balanced 50% Fixed Income / 50% Stock. Moderate Growth 25% Fixed Income / 75% Stock. Growth 100% Stock. Introducing the ABC Retirement Solutions Asset Allocation Models.

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Introducing the ABC Retirement Solutions Asset Allocation Models

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  1. Income 100% Fixed Income Moderate Income 75% Fixed Income / 25% Stock Balanced 50% Fixed Income / 50% Stock Moderate Growth 25% Fixed Income / 75% Stock Growth 100% Stock Introducing the ABC Retirement SolutionsAsset Allocation Models In working with many retirement plan clients, we find there are usually two groups of participants: The first group of employees are those who are comfortable selecting their own mix of investments from a menu of individual mutual funds. The second group of employees are those who would prefer to select a single, managed portfolio for their retirement account that will be professionally managed over time. That is the focus of the ABC Retirement Solutions Asset Allocation Models. As a set of five portfolios with objectives spanning from conservative to growth, the ABC asset allocation models provide convenient exposure to the key asset classes while helping to simplify the process of investing for retirement. Each of these asset allocation models is tailored to different participant needs. They can be used alone, or in combination with other funds to attain your desired asset allocation objective: The objective of the Income Model is to generate income. The interest rate and principal market value of this model will change in reaction to interest rates, government policies, and worldwide economic conditions. The asset allocation of the Income Model is 100% fixed income mutual funds. Investments in the fixed income funds may include US Government obligations, corporate notes, asset-backed and mortgage-backed securities, commercial paper and other fixed income securities. The majority of issues will have maturities or average lives between one and ten years. The objective of the Moderate Income Model is income generation with capital appreciation a secondary consideration. The interest rate and market value of the model will change in reaction to interest rates, government policies and worldwide economic conditions. The Moderate Income Model allocates its assets to 75% fixed income and 25% stocks. The asset classes are high-quality fixed income and stock funds. The fixed income portion consists of short-and intermediate-term mutual funds. The stock portion is diversified between value and growth, large and small, and domestic and international companies. The objective of the Balanced Model is to balance capital appreciation and current income in stock and fixed income funds. The interest rate and market value of the model will change in reaction to interest rates, government policies and worldwide economic conditions. The Balanced Model allocates its assets to 50% fixed income and 50% stocks. The asset classes are high-quality fixed income and stock funds. The fixed income portion consists of short-and intermediate-term mutual funds. The stock portion is diversified between value and growth, large and small, and domestic and international companies. The objective of the Moderate Growth Model is capital appreciation with current income a secondary consideration. The interest rate and market value of the model will change in reaction to interest rates, government policies and worldwide economic conditions. The Moderate Growth Model allocates its assets to 25% fixed income and 75% stocks. The asset classes are high-quality fixed income and stock funds. The fixed income portion consists of short-and intermediate-term mutual funds. The stock portion is diversified between value and growth, large and small, and domestic and international companies. The objective of the Growth Model is capital (price) appreciation over the long-term with dividend income as a limited consideration. The interest rate and market value of the model will change in reaction to interest rates, government policies and worldwide economic conditions. The Growth Model is exclusively a stock portfolio, utilizing mutual funds that could include both domestic and international securities. The portfolio is diversified between value and growth, large and small, and domestic and international companies.

  2. ASSET CLASS / Model Objective Fund Name Income Moderate Income Balanced Moderate Growth Growth % Stock 0.0% 25.0% 50.0% 75.0% 100.0% % Fixed 100.0% 75.0% 50.0% 25.0% 0.0% SHORT TERM FIXED INCOME FUNDS Federated Limited Duration Inst Svc – FTRDX 30.0% 22.0% 0.0% 0.0% 0.0% INTERMEDIATE TERM FIXED INCOME FUNDS Federated Total Bond Inst Svc – FTRFX 30.0% 23.0% 50.0% 25.0% 0.0% Federated Income Inst Sv. – FITSX 40.0% 30.0% 0.0% 0.0% 0.0% LARGE CAP DOMESTIC FUNDS Federated Cap Apprec A - FEDEX 0.0% 18.0% 18.0% 21.0% 20.0% Janus Advisor Growth – JGORX 0.0% 0.0% 7.0% 13.0% 20.0% Federated Stock – JGORX 0.0% 0.0% 9.0% 11.0% 10.0% SMALL MEDIUM CAP DOMESTIC FUNDS Federated Kaufmann A - KAUAX 0.0 0.0% 0.0% 0.0% 10.0% Loomis Sm Cap Val Ret Ad 0.0 3.0% 8.0% 15.0% 20.0% INTERNATIONAL FUNDS AmCent Intl Growth Adv - TWGAX 0.0% 4.0% 8.0% 15.0% 20.0% Income Portfolio 100% Fixed Income Moderate Income Portfolio 75% Fixed Income / 25% Stock Balanced Portfolio 50% Fixed Income / 50% Stock Moderate Growth Portfolio 25% Fixed Income / 75% Stock Growth Portfolio 100% Stock Reviewing the investment mix of the ABC Retirement Solutions Asset Allocation Models… Investment mix shown reflects the model asset weightings in effect on September 30, 2002

  3. Quarter Calendar 1 Year Ended 3 Years Ended 5 Years Ended Ended Year-to-date 9/30/2002 9/30/2002 9/30/2002 Annualized 9/30/2002 9/30/2002 Annualized Annualized Investment Objective 2.14% 4.99% 4.92% 7.44% 6.45% Income 3.44% 6.41% 6.55% 7.83% 6.83% Blended Index -2.85% -1.98% 1.22% 4.56% 5.47% Moderate Income -1.94% -1.82% 1.66% 2.82% 4.47% Blended Index -7.21% -8.48% -1.58% 1.33% 4.08% Balanced -6.87% -8.98% -2.05% -1.24% 2.54% Blended Index -12.59% -15.81% -4.23% -2.30% 2.33% Moderate Growth -12.80% -17.45% -5.92% -6.43% -0.31% Blended Index -17.48% -23.07% -7.18% -4.79% 0.67% Growth -19.01% -25.82% -9.64% -10.85% -3.18% Blended Index Model Performance Total Returns As of 9/30/02 (For Illustrative Purposes Only) Annualized Average Model Portfolio Performance For Periods Ending September 30, 2002 The performance displayed for the ABC Retirement Solutions Model Portfolios is for illustrative purposes only. The ABC Retirement Solutions Model Portfolios were created as of 7/31/02 and did not exist prior to this date. Total returns are historical and include change in share price, reinvestment of dividends and capital gains. Returns are computed before subtraction of management fees. Individual returns may vary based on timing of trades. Total returns for the ABC Retirement Solutions Model Portfolio are based on the historical returns of the component funds that make up each model. Returns for the Federated Kaufmann Fund and the Loomis Small Cap Value Fund are based on a different share class than that contained in the models, due to the lack of historical performance for the specific class used in the models. The ABC Retirement Solutions Model Portfolios are not bank deposits and are not an obligation of, or guaranteed by ABC Trust. These model portfolios are not federally insured and guaranteed by the FDIC, the U.S. Government or any other Government agency. The investments in the model portfolios involve investment risks, including the possible loss of principal. Investment returns will fluctuate. The returns are historical and do not reflect or guarantee future performance. The Blended Index is a composite index consisting of the S&P 500, Russell 2000, EAFE International, LB Aggregate Index, LB Intermediate Government Index and 90-Day T-Bill weighted accordingly with each model.

  4. Once you are eligible to participate in your retirement plan, you need to develop an investment strategy. This questionnaire can help you determine whether you are a conservative, balanced or aggressive investor and which investments offered by the retirement plan may suit your needs. 5 10 15 20 25 Conservative (5 – 10) Moderate (11 – 19) Aggressive (20 – 25) Age 20 – 40 Moderate Income Model or Balanced Model Age 20 – 40 Balanced Model or Moderate Growth Model Age 20 – 40 Growth Model or Moderate Growth Model Age 40 – 55 Moderate Income Model or Balanced Model Age 40 – 55 Balanced Model Age 40 - 55 Growth Model or Moderate Growth Model Age 55 – 65 Income Model or Moderate Income Model Age 55 – 65 Moderate Income Model or Balanced Model Age 55 - 65 Balanced Model or Moderate Growth Model Which Asset Allocation Model Is Right for You? Now total up the numbers circled and see where your score falls on the Investor Profile below. Remember, the five statements and your total score are not meant to tell you which investments to choose. Rather, the questionnaire may help you better understand your objectives and feelings about risk so that you can select an asset allocation mix that is right for you. The above is provided for informational purposes only. You may choose one or any combination of the model portfolios, or use them in combination with your plan’s other available investment funds. The choice of investments is entirely up to you.

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