401k/IRA Retirement Account – 2007 Performance Summary

Our retirement accounts represent about 30% of our total assets. They are spread out over two Fidelity accounts, one Vanguard account, and one Schwab account. Our work history accounts for this spread than diligent planning. Currently our employers use Fidelity and Schwab. Here is a summary of our holding and performance details of the mutual funds held in our 401K and Individual Retirement Accounts (IRA):

Current Employer 401k Account 1:

Symbol	% of Portfolio	Fund Fees	Fund Return 2007 (After Fees)	Comments
Dodge & Cox Stock Fund (DODGX)	18.06	0.52	0.14	A Large cap value fund with a history of outperforming the S&P500 index. Has very low turnover ratio. The fund is very big (~70B) and so outperformance may be harder to come by going forward.
Fidelity Diversified International Fund (FDIVX)	15.94	0.97	16.03	Diversified large-cap international growth fund. This fund is very big at over 58B. Turnover is at 58%. Has a history of outperforming its related index, the MSCI EAFE.
American Beacon Small Cap Value (AVPAX)	13.18	1.06	-6.64	A Small-cap value fund with about 1.2B of total assets under management. Turnover at 48%.
Hotchkis & Wiley Mid-cap Value (HWMIX)	11.78	1.02	-14.77	A mid-cap value fund with about 2.4B of total assets under management. Turnover at 45%.Top 10 holdings account for 38% of assets.

Current Employer 401k Account 2:

Symbol	% of Portfolio	Fund Fees	Fund Return 2007 (After Fees)	Comments
Calomos Growth A (CVGRX)	0.36	1.44	23.26	A 12B large cap growth fund. The top 10 holdings represent about 27% of assets.
Schwab S&P500 Index (SWPIX)	0.30	0.36	5.34	An index fund that tracks the performance of the S&P500 index benchmark.
William Blair International Growth (WBIGX)	0.35	1.67	18.13	A 5B large cap international fund with between 10 and 25% exposure to emerging markets.

Rollover IRA Account:

Symbol	% of Portfolio	Fund Fees	Fund Return 2007 (After Fees)	Comments
Vanguard Index Trust 500 Index (VFINX)	6.94	0.18	5.39	An index fund that tracks the performance of the S&P500 index benchmark.
Vanguard Pacific Stock Index (VPACX)	2.65	0.27	4.78	An index fund that tracks the performance of the MSCI Pacific index benchmark.
Vanguard Total International Stock Index (VGTSX)	2.73	NA	15.52	A fund made up of three other Vanguard funds - the European Stock Index Fund, the Pacific Stock Index, and the Emerging Markets Stock Index Fund.
Vanguard Inflation Protected Securities (VIPSX)	2.54	0.20	11.59	Invests in inflation indexed bonds (primarily US) with maturities between 7 and 20 years.
Vanguard Target Retirement 2035 (VTTHX)	0.03	NA	7.49	A fund made up of other Vanguard funds with an AAP of 90% stocks and 10% bonds.
Vanguard Long-Term Bond Index (VBLTX)	2.50	0.18	6.63	An index fund that tracks the performance of a market-weighted bond index with a long-term dollar-weighted average maturity.

Old Employer 401k Account Yet To Be Rolled Over:

Symbol	% of Portfolio	Fund Fees	Fund Return 2007 (After Fees)	Comments
T. Rowe Price Growth Stock (PRGFX)	8.07	0.70	10.37	A large cap growth fund with 38% turnover rate. The fund is fairly large at ~21B.
T. Rowe Price International Stock (PRITX)	7.03	0.87	13.43	A large cap international growth fund with about 7B assets under management. Invests in both developed & developing economies.
Fidelity Select Technology (FSPTX)	2.14	0.95	19.78	A sector specific fund focused on large cap technology stocks with about 2B in assets under management. Top 10 holdings account for 45% of total assets.
Fidelity Select Health Care (FSPHX)	2.43	0.87	12.45	A sector specific fund focused on large cap healthcare stocks with about 2B in assets under management. Top 10 holdings account for 38% of total assets.

The total returns this year were rather mediocre at 2.29%. The performance doesn’t compare very well with the returns of popular indices and slips further when pitted against the stock portfolio that we manage. Following reasons contribute significantly for such a mediocre performance:

• Our mutual fund selections had their pitfalls and our preference for managed funds as opposed to indexed funds resulted in the double-whammy of index underperformance along with higher fees. The relatively newer HWMIX in the mid-cap and AVPAX in the small-cap area both fall into this category. Further, DODGX had a rare rough year barely providing a positive return for the year.
• Our employer plans are limited in the number of mutual funds to choose from.
• We did not take advantage of the flexibility associated with the vast amount of investment options available when old employer accounts were rolled over to an IRA. Our failure rollover one of our old employer accounts to an IRA resulted in less flexibility and higher fees.
• We did not plan well to allocate our 401K funds based on an Asset Allocation Plan (AAP).

We plan to look into reallocating our 401K portfolio accounts and rolling over the old employer account not yet rolled over into an rollover IRA account. The ultimate aim will be for an overall split-up of 40-40-20 across Domestic, International, and Bonds/Alternative.


Related Posts:

1. 401K/IRA Account 2007 Performance Summary.
2. 401K/IRA Account – Asset Allocation for 2008 – Part 1.
3. 401K/IRA Account – Asset Allocation for 2008 – Part 2.
4. Retirement Portfolio – Mid Year Update.
5. Asset Allocation Adjustments to Retirement Portfolio in the face of market correction.
6. 401K/IRA/Retirement Account 2008 Performance Summary.
7. 401K/IRA/Retirement Account 2009 Reallocations.
8. 401K & Retirement Accounts Performance - Mid Year 2009 Update.