In this article, we will discussFord Motor's 401K .
Ford Motor Company (F) designs, develops, manufactures, and services cars and trucks worldwide. It operates in two sectors, Automotive and Financial Services. Ford Motor Company was founded in 1903 and is based in Dearborn, Michigan. Ford is one of the pioneers in automobile industry.
Ford Motor 401K's 401K plan consists of 24 funds. These funds enable participants to gain exposure to 4 major assets: U.S. Equity, Foreign Equity, REITs and Fixed Income. The list of minor asset classes covered:
Foreign Large Blend: EFA, VEU, GWL, PFA
Foreign Small/mid Growth: IFSM, VSS, SCHC
Global Real Estate: IFGL, RWX
Inflation-protected Bond: TIP
Intermediate-term Bond: AGG, CIU, BIV, BND
Large Blend: IVV, IYY, IWV, VTI, VV, SPY, DLN, RSP, SCHX
Large Growth: IVW, IWZ, JKE, VUG, ELG, QQQQ, RPG, SCHG
Mid-cap Blend: IJH, IWR, JKG, VO, MDY, EMM, PJG, DON, EZM, MVV
As of Oct 22, 2010, this plan investment choice is rated as Above Average based on MyPlanIQ Plan Rating methodology that was designed to measure how effective a plan's available investment funds are. It has the following detailed ratings:
Diversification -- Rated as above average (76%)
Fund Quality -- Rated as above average (69%)
Portfolio Building -- Rated as above average (71%)
Overall Rating: Above average (72%)
The Fund Quality ranking is very reasonable. Its selection includes Fidelity Contrafund, Neuberger Berman Genesis Instl and Royce funds.
The chart and table below show the historical performance of moderate model portfolios employing strategic and tactical asset allocation strategies (SAA and TAA , both provided by MyPlanIQ). For comparison purpose, we also include the moderate model portfolios of a typical 4 asset SIB (Simpler Is Better) plan . This SIB plan has the following candidate index funds and their ETFs equivalent:
Click to enlarge:
Performance table (as of Oct 22, 2010)
|Portfolio Name||1Yr AR||1Yr Sharpe||3Yr AR||3Yr Sharpe||5Yr AR||5Yr Sharpe|
|Ford Motors 401K Tactical Asset Allocation Moderate||7%||52%||8%||77%||11%||98%|
|Ford Motors 401K Strategic Asset Allocation Moderate||11%||107%||2%||9%||6%||34%|
|Four Core Asset Index Funds REITs Tactical Asset Allocation Moderate||12%||82%||6%||58%||10%||93%|
|Four Core Asset Index Funds REITs Strategic Asset Allocation Moderate||14%||100%||2%||5%||6%||25%|
Currently, asset classes in U.S. Equity (SPY, VTI) , Foreign Equity (EFA, VEU) , REITs (IYR, VNQ, ICF) and Fixed Income (AGG, BND) are doing relatively well. These asset classes are available to Ford Motor 401K participants.
To summarize, Ford Motor 401K plan provides above average choices to its plan participants. As one of the major automobile manufacturers, Ford employees can benefit from such a plan to support their retirement needs.
Disclosure: No position