Intel Corporation was incorporated in California in 1968 and reincorporated in Delaware in 1989 and is the world's largest semiconductor chip maker, based on revenue. They develop advanced integrated digital technology products, primarily integrated circuits, for industries such as computing and communications. Integrated circuits are semiconductor chips etched with interconnected electronic switches. Intel also develops platforms – defined as integrated suites of digital computing technologies that are designed and configured to work together to provide an optimized user computing solution compared to components that are used separately.
Intel Corporation 401(k) Savings Plan's 401K plan consists of 63 funds. These funds enable participants to gain exposure to 5 major assets: US Equity, Foreign Equity, Emerging Market Equity, REITs and Fixed Income.
The list of minor asset classes covered:
Conservative Allocation: AOK
Diversified Emerging Mkts: EEM, GMM, PXH, DEM, SCHE
Emerging Markets Bond: PCY
Equity Precious Metals: DBP
Foreign Large Blend: EFA, VEU, GWL, PFA
Foreign Large Value: EFV, PID, DWM
Foreign Small/mid Value: SCZ
High Yield Bond: HYG, JNK, PHB
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
Large Value: IVE, IWW, JKF, VTV, ELV, PWV, RPV, SCHV
Long Government: TLT, TLH, IEF, EDV, VGLT, TLO, PLW
Long-term Bond: CLY, LQD, BLV, VCLT
Mid-cap Blend: IJH, IWR, JKG, VO, MDY, EMM, PJG, DON, EZM, MVV
Mid-cap Growth: IJK, IWP, VOT, EMG, PWJ, RFG, UKW
Mid-cap Value: IJJ, IWS, JKI, VOE, EMV, PWP, RFV, UVU
Moderate Allocation: AOM
Multisector Bond: AGG, GBF, BND, LAG
Real Estate: IYR, ICF, VNQ
Small Blend: IJR, IWM, JKJ, VB, DSC, PJM, DES, SAA, UWM, SCHA
Small Growth: IJT, IWO, JKK, VBK, DSG, PWT, RZG, UKK
Small Value: IJS, IWN, JKL, VBR, DSV, PWY, RZV, UVT
Us Equity: IVV, IYY, IWV, VTI, VV, SPY, DLN, RSP, SCHX
World Allocation: AOR, AOA
World Bond: IGOV, BWX, WIP
World Stock: IOO, VT
As of Oct 25, 2010, this plan 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 great (99%)
Fund Quality -- Rated as below average (32%)
Portfolio Building -- Rated as above average (82%)
Overall Rating: above average (72%)
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 purposes, we include the moderate model portfolios of a typical 5 asset SIB (Simpler Is Better) plan. This SIB plan has the following candidate index funds and their ETFs equivalent:
US Equity: SPY or VTI
Foreign Equity: EFA or VEU
REITs: IYR or VNQ or ICF
Emerging Market Equity: EEM or VWO
Fixed Income: AGG or BND
Performance chart (as of Oct 25, 2010)
Performance table (as of Oct 25, 2010)
|Portfolio Name||1Yr AR||1Yr Sharpe||3Yr AR||3Yr Sharpe||5Yr AR||5Yr Sharpe|
|Intel Corporation 401(k) Savings Plan Tactical Asset Allocation Moderate||18%||128%||11%||85%||14%||109%|
|Intel Corporation 401(k) Savings Plan Strategic Asset Allocation Moderate||15%||145%||2%||8%||7%||41%|
|Five Core Asset Index ETF Funds Tactical Asset Allocation Moderate||12%||81%||7%||51%||15%||105%|
|Five Core Asset Index ETF Funds Strategic Asset Allocation Moderate||16%||114%||3%||12%||9%||41%|
Currently, asset classes in Emerging Market Equity (EEM, VWO), REITs (IYR, VNQ, ICF) and Fixed Income (AGG, BND) are doing relatively well. These asset classes are available to Intel Corporation 401(k) Savings Plan participants.
Having a large number of funds and five asset classes enable both strategic and tactical asset allocation to perform to optimal levels. Note that even in the strategic asset allocation there will be some styles rotation to slightly improve returns.
To summarize, the Intel Corporation 401(k) Savings Plan plan gives participantsthe ability to build a solid portfolio to achieve good investment returns using asset allocation strategies that are tailored to their risk profiles.
Currently, the tactical asset allocation strategy indicates overweighing on Emerging Market Equity, REITs and Fixed Income funds.