Asset Allocation
Models
A tool to help simplify asset allocation
Prepared for:
Not sure how to invest? There’s help.
Due to the fact that different asset classes (e.g. stable value, bonds, stocks/equities), fluctuate,
allocating your assets among an assortment of investments can help strengthen your 401(k)
portfolio amidst an ever-changing market. When properly used an asset allocation strategy can
help you reduce risk and even increase potential return over time.
The Retirement Consultant for your Plan, Benefit Funding Services Group, has designed twelve
(12) asset allocation models using core investment options available in the Plan. The models are
automatically rebalanced on a quarterly basis, to help ensure the proper allocation amongst the
different asset classes. There is no charge to take advantage of this service. Continue reading to
determine which model may be right for you!
□ Determine your retirement time horizon.
Time is an important factor to any investor. Not only will investments generally increase over time
through the power of compounding, but time can also help smooth out the inevitable ups and
downs of the financial markets. Your investment strategy will depend heavily on just how much
time you have until you need to access your money.
□ Understand your tolerance for risk.
Conservative Investor
Concerned about short-term market ups and downs. Prefers minimizing risk and
maintaining principal. Seeks stability; does not prefer fluctuation in investment value
Moderate Investor
Willing to sacrifice safety of principal for potentially greater returns. Can tolerate modest
market fluctuations. Concerned with safety, but wants to stay ahead of inflation
Growth Investor
Seeks to maximize investment returns. Can tolerate substantial market fluctuations.
Accepts greater risks in exchange for prospect of greater rewards.
□ Choose a pre-made asset allocation model.
To determine which model may be right for you, start out by taking the Investor Style Quiz on the
next page to find out whether you are a conservative, moderate or growth-oriented investor. At the
end of the Quiz, calculate your Retirement Time Horizon (number of years until retirement).
Knowing your risk tolerance and time horizon will enable you to choose one of the 12 models. A
description of each model follows the Investor Style Quiz.
More Conservative
Potentially less investment risk and more inflation risk
CONSERVATIVE
More Aggressive
Potentially more investment risk and less inflation risk
MODERATE
For further details on the investment options in the Portfolio Models, please refer to the underlying
mutual funds’ prospectuses.
GROWTH
Investor Style Quiz
1. How concerned are you that you won’t achieve a high enough
rate of return over the long term?
8. Your level of experience with bonds or bond funds.
Very Concerned
10
Somewhat Concerned
7
Not Concerned
3
2. How concerned are you about potential loss of “buying power” or
“quality of life” due to the effects of inflation?
Very Concerned
6
Somewhat Concerned
4
Not Concerned
1
Very experienced
5
Somewhat experienced
3
Very little experience
2
None
1
High
12
Fair
10
Very little
4
None
0
9. Your comfort level with stocks or stock funds.
3. How concerned are you over wide swings in the value of your
account over a 1 – 3 month period?
10. Your comfort level with bonds or bond funds.
Very Concerned
0
Somewhat Concerned
4
High
7
Not Concerned
12
Fair
4
Very little
3
None
0
4. How concerned are you over wide swings in the value of your
account over a 1 – 2 year period?
Very Concerned
2
Somewhat Concerned
6
Not Concerned
12
Add up the points corresponding to your answers and total your
score below.
INVESTOR TOTAL SCORE:
5. Which of the following causes you the most concern about the
investments in your account?
Ability to get back at least as much as I put in
2
My money is not earning enough
6
How much I’ve gained or lost this month
0
6. One of your investments has performed very well for a few years.
If it suddenly dropped 15% in 3 months, what would you do?
Conservative
0 – 40 points
Moderate
41 – 60 points
Growth
61+ points
Sell immediately
0
The amount of risk that is appropriate for you also depends on your
time horizon – the approximate number of years between now and
your retirement. Calculate your time horizon below:
Hold it
6
Your planned retirement age
Buy more
8
(subtract) Your current age
7. Your level of experience with stock or stock funds.
Very experienced
6
Somewhat experienced
4
Very little experience
2
None
1
YOUR RETIREMENT TIME HORIZON
This quiz is designed to be used as a guide only and is not intended as financial advice. Your
financial decisions should not be based solely on the score you have obtained using this worksheet.
years
Asset Allocation Models
CONSERVATIVE
MODERATE
GROWTH
Structure
Asset Allocation Models are a composite of several investment options intended to be allocated in accordance
with a Plan participant’s risk tolerance and time horizon to retirement. Since asset allocation is one of the most
critical factors in a participant’s retirement savings success, Asset Allocation Models can be used to assist in
determining the proper allocation. The Models are constructed to provide different risk/return characteristics
that are determined by the underlying investment options. The investment options used in the Models are
actively-managed mutual funds.
Target Model Allocations
Score 0-40 points
Score 41-60 points
Score 61+ points
Conservative
Moderate
Growth
Risk Tolerance
Investm ent Options
Years to Retirement 0-5
yrs
6-10
yrs
11-15
yrs
16+
yrs
0-5
yrs
6-10
yrs
11-15
yrs
16+
yrs
0-5
yrs
6-10
yrs
11-15
yrs
16+
yrs
Stable Value
Gartmore Morley Stable
Value
60%
50%
30%
10%
55%
40%
10%
0%
50%
20%
0%
0%
Bond
PIMCO Total Return
20%
25%
30%
15%
20%
30%
25%
10%
25%
30%
15%
0%
Large Cap Value
Investment Company of
America
10%
10%
15%
25%
10%
15%
20%
30%
10%
15%
25%
30%
Large Cap Growth Growth Fund of America
5%
10%
10%
20%
10%
10%
20%
30%
10%
15%
20%
30%
Mid Cap Value
Goldman Sachs Mid Cap
Value
0%
0%
2%
5%
0%
3%
5%
5%
3%
5%
5%
5%
Mid Cap Growth
Artisan Mid Cap
2%
2%
3%
5%
2%
2%
5%
5%
0%
3%
10%
10%
Small Cap Blend
Royce Opportunity
3%
3%
3%
5%
3%
0%
5%
5%
2%
5%
5%
5%
Small Cap Growth Vanguard Explorer
0%
0%
2%
5%
0%
0%
5%
5%
0%
2%
10%
10%
Foreign Equity
0%
0%
5%
10%
0%
0%
5%
10%
0%
5%
10%
10%
EuroPacific Growth
100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Principal Risks
All equity (domestic and international) and fixed income investments exhibit certain risk characteristics that
include the potential for loss of principal value. Generally, the probability of loss of principal is greater with
investments that also provide the greatest potential for returns. International investments carry additional risks
that relate to currency and political uncertainty. The risks of Asset Allocation Models are based on the
proportionate risk characteristics of the underlying mutual funds.
Asset Allocation Models
CONSERVATIVE
MODERATE
GROWTH
Investment Option Profiles
STABLE VALUE
Gartmore Morley Stable Value – The objective of the Fund is to provide a low-risk, moderate yield
investment. The Fund is managed to earn a consistent level of return, while providing for, preservation of
capital, high credit quality and liquidity to pay plan benefits.
BOND
PIMCO Total Return – Seeks maximum total return. The fund normally invests at least 65% of assets in a
diversified portfolio of Fixed-Income Instruments of varying maturities, which may be represented by forwards
or derivatives such as options, futures contracts, or swap agreements. It invests primarily in investment-grade
debt securities, but may invest up to 10% of total assets in high-yield securities (“junk bonds”). The fund may
invest all assets in derivative instruments, such as options, futures contracts or swap agreements, or in
mortgage- or asset-backed securities.
LARGE CAP VALUE
Investment Company of America – Seeks to provide long-term growth of capital and income, placing greater
emphasis on future dividends than on current income. Principally invests in common stocks; may also hold
securities convertible into common stocks, as well as bonds (generally rated Baa or BBB or better), U.S.
government securities, nonconvertible preferred stocks, and cash and equivalents. The fund may invest up to
15% of its assets, at time of purchase, in securities of issuers domiciled outside the United States and not
included in the S&P 500.
LARGE CAP GROWTH
Growth Fund of America – Seeks to provide long-term growth of capital through a diversified portfolio of
common stocks. The fund emphasizes companies that appear to offer opportunities for long-term growth, and
may invest in cyclical companies, turnarounds and value situations. Invests primarily in common stocks. May
also invest in convertibles, preferred stocks, U.S. government securities, bonds and cash. May invest up to
15% of assets in securities of issuers domiciled outside the United States and Canada and not included in the
S&P 500. May invest up to 10% of assets in debt securities rated below investment grade.
MID CAP VALUE
Goldman Sachs Mid Cap Value – The Fund seeks long-term capital appreciation. The Fund invests, under
normal circumstances, at least 80% of its Net Assets in a diversified portfolio of equity investments in mid-cap
issuers with public stock market capitalizations (based upon shares available for trading on an unrestricted
basis) within the range of the market capitalization of companies constituting the Russell Midcap® Value Index
at the time of investment. Although the Fund will invest primarily in publicly traded U.S. securities, it may
invest up to 25% of its Net Assets in foreign securities, including securities of issuers in emerging countries and
securities quoted in foreign currencies.
MID CAP GROWTH
Artisan Mid Cap – Seeks maximum long-term capital growth. The fund invests primarily in U.S. companies
and, under normal market conditions, the fund invests no less than 80% of net assets in the common stocks of
medium-sized companies with a market capitalization greater than the market capitalization of the smallest
company in the Russell Mid-cap Index and less than three times the weighted average market capitalization of
companies in that index. The maximum investment in any single industry is 25% of net assets and no more
than 5% may be invested in securities of a single issuer.
For further details on the investment options in the Portfolio Models, please refer to the
underlying mutual funds’ prospectuses.
Asset Allocation Models
CONSERVATIVE
MODERATE
GROWTH
Investment Option Profiles
SMALL CAP BLEND
Royce Opportunity – Royce Opportunity Fund’s investment goal is long-term growth of capital. Invests the
Fund’s assets primarily in the equity securities of small- and micro-cap companies, those with market
capitalizations up to $2.5 billion, in an attempt to take advantage of what it believes are opportunistic situations
for undervalued securities. Such opportunistic situations may include turnarounds, emerging growth companies
with interrupted earnings patterns, companies with unrecognized asset values or undervalued growth
companies.
SMALL CAP GROWTH
Vanguard Explorer – The Fund invests mainly in the stocks of small companies. These companies tend to be
unseasoned but are considered by the Fund's advisors to have superior growth potential. Also, these
companies often provide little or no dividend income. The Fund uses multiple investment advisors.
FOREIGN EQUITY
EuroPacific Growth – Seeks to provide long-term growth of capital by investing in companies based outside
the United States. The fund normally invests at least 80% of net assets in securities of issuers in Europe and
the Pacific Basin that the investment adviser believes have the potential for growth. Growth stocks are stocks
that the investment adviser believes have the potential for above-average capital appreciation.
For further details on the investment options in the Portfolio Models, please refer to the
underlying mutual funds’ prospectuses.
Conservative Models
CONSERVATIVE
MODERATE
GROWTH
Conservative
0-5 yrs
6-10 yrs
11-15 yrs
16+ yrs
Investment Strategy:
Investment Strategy:
Investment Strategy:
Investment Strategy:
The primary objective of this
Conservative Model is capital
preservation. The Model is
allocated with 60% in Money
Market, 20% in bonds and
20% in domestic and foreign
equities. This Model is
ideally suited for conservative
individuals with a time
horizon of 5 years or less.
The primary objective of this
Conservative Model is capital
preservation. The Model is
allocated with 50% in Money
Market, 25% in bonds and
25% in domestic and foreign
equities. This Model is
ideally suited for conservative
individuals with a time
horizon of 6 to 10 years.
The primary objective of this
Conservative Model is capital
preservation with modest
capital appreciation. The
Model is allocated with 30% in
Money Market, 30% in Bonds
and 40% in domestic and
foreign equities. This Model is
ideally suited for conservative
individuals with a time horizon
of 11 to 15 years.
The primary objective of this
Conservative Model is capital
preservation with a secondary
objective of capital
appreciation. The Model is
allocated with 10% in Money
Market, 15% in bonds and
75% in domestic and foreign
equities. This Model is ideally
suited for conservative
individuals with a time horizon
of 16 plus years.
Target Allocation Mix:
Target Allocation Mix:
Target Allocation Mix:
Target Allocation Mix:
10%
20%
25%
30%
15%
40%
50%
20%
60%
25%
75%
30%
Investment Allocation:
Investment Allocation:
Investment Allocation:
Investment Allocation:
Money Market
Money Market
Money Market
60% Gartmore Morely Stable 50% Gartmore Morely Stable 30% Gartmore Morely Stable
Value
Value
Value
Money Market
10% Gartmore Morely Stable
Value
Bond
20% PIMCO Total Return
Bond
15% PIMCO Total Return
Bond
25% PIMCO Total Return
Bond
30% PIMCO Total Return
Large Cap Value
Large Cap Value
Large Cap Value
10% Investment Company of 10% Investment Company of 15% Investment Company of
America
America
America
Large Cap Growth
Large Cap Growth
5% Growth Fund of America America
Large Cap Value
25% Investment Company of
America
Large Cap Growth
Large Cap Growth
10% Growth Fund of America 20% Growth Fund of America
Mid Cap Value
Mid Cap Value
Mid Cap Value
0% Goldman Sachs Mid Cap 0% Goldman Sachs Mid Cap 2% Goldman Sachs Mid Cap
Value
Value
Value
Mid Cap Value
5% Goldman Sachs Mid Cap
Value
Mid Cap Growth
2% Artisan Mid Cap
Mid Cap Growth
2% Artisan Mid Cap
Mid Cap Growth
3% Artisan Mid Cap
Mid Cap Growth
5% Artisan Mid Cap
Small Cap Blend
3% Royce Opportunity
Small Cap Blend
3% Royce Opportunity
Small Cap Blend
3% Royce Opportunity
Small Cap Blend
5% Royce Opportunity
Small Cap Growth
0% Vanguard Explorer
Small Cap Growth
0% Vanguard Explorer
Small Cap Growth
2% Vanguard Explorer
Small Cap Growth
5% Vanguard Explorer
Foreign Equity
0% EuroPacific Growth
Foreign Equity
0% EuroPacific Growth
Foreign Equity
5% EuroPacific Growth
Foreign Equity
10% EuroPacific Growth
For further details on the investment options in the Portfolio Models, please refer to the
underlying mutual funds’ prospectuses.
Moderate Models
CONSERVATIVE
MODERATE
GROWTH
Moderate
0-5 yrs
6-10 yrs
11-15 yrs
16+ yrs
Investment Strategy:
Investment Strategy:
Investment Strategy:
Investment Strategy:
The primary objective of this
Moderate Model is to seek
both capital preservation and
income. The Model is
allocated with 55% in Money
Market, 20% in bonds and
25% in domestic and foreign
equities. This Model is
appropriate for individuals with
a moderate level of risk and a
short time horizon of 5 years or
less.
The primary objective of this
Moderate Model is to seek
both capital preservation,
income and moderate capital
appreciation. The Model is
allocated with 40% in Money
Market, 30% in bonds and
30% in domestic and foreign
equities. This Model is
appropriate for individuals with
a moderate level of risk and a
time horizon of 6-10 years.
The primary objective of this
Moderate Model is to seek
income and capital
appreciation. The Model is
allocated with 10% in Money
Market, 25% in Bonds and
65% in domestic and foreign
equities. This Model is
appropriate for individuals with
a moderate level of risk and
time horizon of 11-15 years.
The primary objective of this
Moderate Model is to seek
income and capital
appreciation. The Model is
allocated with 0% in Money
Market, 10% in bonds and
90% in domestic and foreign
equities. This Model is
appropriate for individuals with
a moderate level of risk and
time horizon of 16 plus years.
Target Allocation Mix:
Target Allocation Mix:
Target Allocation Mix:
Target Allocation Mix:
0% 10%
10%
25%
30%
40%
25%
55%
65%
20%
30%
90%
Investment Allocation:
Investment Allocation:
Investment Allocation:
Investment Allocation:
Money Market
55% Gartmore Morely Stable
Value
Money Market
40% Gartmore Morely Stable
Value
Money Market
10% Gartmore Morely Stable
Value
Money Market
0% Gartmore Morely Stable
Value
Bond
20% PIMCO Total Return
Bond
30% PIMCO Total Return
Bond
25% PIMCO Total Return
Bond
10% PIMCO Total Return
Large Cap Value
10% Investment Company of
America
Large Cap Value
15% Investment Company of
America
Large Cap Value
20% Investment Company of
America
Large Cap Value
30% Investment Company of
America
Large Cap Growth
Large Cap Growth
Large Cap Growth
Large Cap Growth
10% Growth Fund of America 10% Growth Fund of America 20% Growth Fund of America 30% Growth Fund of America
Mid Cap Value
0% Goldman Sachs Mid Cap
Value
Mid Cap Value
3% Goldman Sachs Mid Cap
Value
Mid Cap Value
5% Goldman Sachs Mid Cap
Value
Mid Cap Value
5% Goldman Sachs Mid Cap
Value
Mid Cap Growth
2% Artisan Mid Cap
Mid Cap Growth
2% Artisan Mid Cap
Mid Cap Growth
5% Artisan Mid Cap
Mid Cap Growth
5% Artisan Mid Cap
Small Cap Blend
3% Royce Opportunity
Small Cap Blend
0% Royce Opportunity
Small Cap Blend
5% Royce Opportunity
Small Cap Blend
5% Royce Opportunity
Small Cap Growth
0% Vanguard Explorer
Foreign Equity
0% EuroPacific Growth
Small Cap Growth
0% Vanguard Explorer
Foreign Equity
0% EuroPacific Growth
Small Cap Growth
5% Vanguard Explorer
Foreign Equity
5% EuroPacific Growth
Small Cap Growth
5% Vanguard Explorer
Foreign Equity
10% EuroPacific Growth
For further details on the investment options in the Portfolio Models, please refer to the
underlying mutual funds’ prospectuses.
Growth Models
CONSERVATIVE
MODERATE
GROWTH
Growth
0-5 yrs
6-10 yrs
11-15 yrs
16+ yrs
Investment Strategy:
Investment Strategy:
Investment Strategy:
Investment Strategy:
The primary objective of this
Growth Model is to seek
capital preservation, income
and moderate growth. The
Model is allocated with 50% in
Money Market, 25% in bonds
and 25% in domestic and
foreign equities. This Model is
appropriate for growth-oriented
individuals with a short time
horizon of 5 years or less.
The primary objective of this
Growth Model is to seek
capital preservation, income
and moderate growth. The
Model is allocated with 20% in
Money Market, 30% in bonds
and 50% in domestic and
foreign equities. This Model is
appropriate for growth-oriented
individuals with a time horizon
of 6-10 years.
The primary objective of this
Growth Model is capital
appreciation. The Model is
allocated with 0% in Money
Market, 15% in Bonds and
85% in domestic and foreign
equities. This Model is
appropriate for growthoriented individuals with a time
horizon of 11-15 years.
The primary objective of this
Growth Model is long-term
capital appreciation. The
Model is allocated with 100%
in domestic and foreign
equities. This Model is
appropriate for growthoriented individuals with a longterm time horizon of 16 plus
years.
Target Allocation Mix:
Target Allocation Mix:
Target Allocation Mix:
Target Allocation Mix:
0%
20%
25%
50%
15%
100%
50%
30%
25%
85%
Investment Allocation:
Investment Allocation:
Investment Allocation:
Investment Allocation:
Money Market
50% Gartmore Morely Stable
Value
Money Market
20% Gartmore Morely Stable
Value
Money Market
0% Gartmore Morely Stable
Value
Money Market
0% Gartmore Morely Stable
Value
Bond
25% PIMCO Total Return
Bond
30% PIMCO Total Return
Bond
15% PIMCO Total Return
Bond
0% PIMCO Total Return
Large Cap Value
10% Investment Company of
America
Large Cap Value
15% Investment Company of
America
Large Cap Value
25% Investment Company of
America
Large Cap Value
30% Investment Company of
America
Large Cap Growth
Large Cap Growth
Large Cap Growth
Large Cap Growth
10% Growth Fund of America 15% Growth Fund of America 20% Growth Fund of America 30% Growth Fund of America
Mid Cap Value
3% Goldman Sachs Mid Cap
Value
Mid Cap Value
5% Goldman Sachs Mid Cap
Value
Mid Cap Value
5% Goldman Sachs Mid Cap
Value
Mid Cap Value
5% Goldman Sachs Mid Cap
Value
Mid Cap Growth
0% Artisan Mid Cap
Mid Cap Growth
3% Artisan Mid Cap
Mid Cap Growth
10% Artisan Mid Cap
Mid Cap Growth
10% Artisan Mid Cap
Small Cap Blend
2% Royce Opportunity
Small Cap Blend
5% Royce Opportunity
Small Cap Blend
5% Royce Opportunity
Small Cap Blend
5% Royce Opportunity
Small Cap Growth
0% Vanguard Explorer
Foreign Equity
0% EuroPacific Growth
Small Cap Growth
2% Vanguard Explorer
Foreign Equity
5% EuroPacific Growth
Small Cap Growth
10% Vanguard Explorer
Foreign Equity
10% EuroPacific Growth
Small Cap Growth
10% Vanguard Explorer
Foreign Equity
10% EuroPacific Growth
For further details on the investment options in the Portfolio Models, please refer to the
underlying mutual funds’ prospectuses.