Tag Archives: Buy/Hold Plus

Audited Performance? Most TAMPs aren’t!

audit image 2Did you know?

  • The Buy/Hold Plus performance figures are the returns actually experienced by our clients AFTER ALL FEES.
  • Check your Performance Statements from your current managed account program.  Most TFS used Managed Account Programs have unaudited, before fees, non-client correlated performance.
  • Much time, effort and expense is spent to have our performance audited.
  • The Buy/Hold Plus 2015 Independent Accountant’s Report ending 2015 can now be found on our website.

Is Your Managed Account Performance Audited?  Most are not.                                                         What are you portraying to your clients?


Actively Positioned for Rising US Interest Rates

stockgainsWhat Michael Hasenstab and the Templeton Global Bond Fund are doing to position for rising rates.

The Templeton Global Bond Fund represents the Foreign Fixed Income asset class for the Buy/Hold Plus portfolio, and is actively positioning in three main areas to account for rising US rates.

  1. Negative exposure to US Treasuries;
  2. Long US dollar against short euro and long US dollar against short Japanese yen; and
  3. Select currencies and local-bond exposures in specific emerging markets.

Click here to read more about these three active positioning strategies.

Please be advised this is Topic Paper is for internal use only

401k PLUS Pricing Change!

As you know, 401k PLUS partners with Retirement Management Systems (RMS) to provide professional management of your clients’ work plan assets.

Recently, RMS has changed their pricing structure which made it necessary to change ours.  They have switched to a percentage of assets while we are keeping the simplicity with low, flat fees.

Click here to see the below fee schedule for all new clients going forward.  Continue reading

What Bad Advice Did You Give In 2014?

Market unpredictability was evident in 2014, especially inwrongsign the fixed income market

“Prediction is very difficult, especially about the future.” –- Niels Bohr.

What the fixed-income markets were going to do in 2014 seemed to be a foregone conclusion – rates would rise without the Federal bond-buying program and rate-sensitive securities would have a tough go of it.  That would especially include longer term treasuries. Barclays Long Term US Treasury TR Index subsequently rose 25.07% in 2014.

What does this mean?  There is no such thing as a sure thing when it comes to investing, and is why Buy/Hold Plus has a diversified approach across all asset classes all of the time.

Click here for a more detailed Morningstar 2014 Bond Fund Report on these and other issues:

  • Bond Rally Pushing Down Yields
  • Bill Gross Leaving PIMCO
  • Junk Bonds Hurt by Falling Energy Prices
  • Escalation Between Russia and Ukraine
  • Muni Rebound Despite Detroit and Puerto Rico Troubles



Effective at the close of market on December 31, 2014, all Buy/Hold Plus Models will change their benchmarks from the current S&P 500, MSCI EAFE, and Barclays US Aggregate Indexes to the MSCI AC IMI World and Barclays Multiverse Indexes. This change will be reflected on the performance sheets starting for the 4th quarter of 2014.

Today’s marketplace has evolved to provide easy access to a growing number of asset classes across different capitalizations, economies, and alternative specialties. Advanced asset allocation techniques utilize these exposures in providing a widespread level of diversification. This has caused the standard indexes, with their limited focuses, to provide an inaccurate and incomplete view of the global marketplace which Buy/Hold Plus seeks to capture.

Franklin Templeton has announced its own plans to make the same benchmark changes for their Allocation Funds. We are proud to join Franklin Templeton in this step forward to not only provide more accuracy in benchmark comparisons, but to also help in promoting client education – focusing more on the importance and stability of a well-diversified portfolio in reaching your goals than beating an arbitrary index in any one year.Untitled-8

 What this means for you:

  • More accurate comparison view on model performance
  • Clearer marketing materials when presenting to clients
  • Stronger client understanding of proper investment diversification goals

If you have any questions on this change, or if you would like more information on how to help educate clients on a broader investment view, please contact Tara Giarraffa Recupido.

Benchmarking Articles of Interest

6 Big Mistakes You Can Make Benchmarking to the S&P

What Benchmark Should I Measure My Return Against?


New Fund Changes!

Our Quarterly Fund Replacement Review has been performed. In keeping with the program’s goal of maintaining only the highest quality funds in the investment portfolio, the following changes have been implemented:exchange image 3

  • iShares North American Natural Resources (IGE) exchanged for Vanguard Materials ETF (VAW) — Due to the recent volatility in the Natural Resources asset class, it provided us with an opportunity to harvest some short-term tax losses by substituting IGE for the materially similar VAW. 
  • RS Select Growth Y (RSSYX) exchanged for iShares Mid Cap Growth (IWP) and Eagle Mid Cap Growth I (HAGIX)

The fund families currently owned in model portfolios are now: Laudus, Franklin Templeton, SunAmerica, iShares, J.P. Morgan, T. Rowe Price, Delaware, Eagle, Oppenheimer, MFS, AMG Managers, Weitz, Metropolitan, Vanguard, Western Asset, and TCW.

 For the performance of each portfolio model, or additional information on any of the extensive ongoing management benefits, please feel free to contact Tara Giarraffa Recupido at (800) 614-2980 or visit BuyHoldPlus.com.

Fixed Income Manager of the Year Nomination

Metropolitan West Total Return Fund (Metropolitan_West_Asset_Management_Llc_217856MWTIX) is part of the Buy/Hold Plus Portfolio and has recently been announced as one of the five nominees for Fixed-Income Manager of the Year in 2013.  The Intermediate-Term Bond Fund did an excellent job navigating a very tough market in 2013 to add to its already stellar long term record.  Morningstar highlighted some of the key components of the fund:

“TCW/MetWest’s fixed-income CIO Tad Rivelle and team won the Fixed-Income Fund Manager of the Year Award in 2005 and have been nominated multiple times in the past, including for Fund Manager of the Decade in 2009.”

“The managers’ methodical approach and value discipline has delivered time and again over the years, resulting in a stellar long-term record that has rewarded investors handsomely. And while they have shown a willingness to take considerable risk when the price has been right, the fund’s exceptional long-term record in both absolute and volatility-adjusted terms suggests investors have been well compensated for the fund’s above-average volatility.”

You can find the entirety of the article here to learn more about the prestigious nomination.

2013 Fund Review – Buy/Hold Plus


As you are already aware, overall 2013 was an excellent year in the market.  The focus of this has been on the S&P 500, which gained over 32%.  However, as most individuals are not invested solely in the Large Cap Blend category, this can often be very misleading to their expectations for their own accounts.  A quick look at the other major broad indexes shows that the MSCI performed roughly 10% less than the S&P 500, and Barclays Aggregate over a whopping 34% less.  Not to mention many of the alternative, lower correlated categories such as Real Estate, Natural Resources, and Developing Markets, which also lagged this most public index.  It is therefore important to remind clients that, as with any well balanced and diversified portfolio, stabilized growth through limited volatility is the goal – not to outperform one broad Large Cap Blend Index.   Below you can find a detailed evaluation of how the Buy/Hold Plus funds performed compared to both broad and specific category indexes.

 Indexes Comparisons

The three major broad indexes are the S&P 500, MSCI EAFE, and Barclays US Aggregate Bond.  All domestic equity funds are compared to the S&P 500, international equity funds to the MSCI EAFE, and all fixed income funds to the Barclays US Aggregate Bond index.  This view however does not lend itself much to the three alternative categories used, as they are utilized specifically for their contrary movements to the major equity indexes.  It is therefore not surprising their performances were all subservient in this year of high major equity index returns.

Looking past the alternatives, out of the 8 domestic equity funds utilized, 7 beat the broad index of the S&P 500 – the sole fund performing below came in at a marginal 0.40% less.  Half of the 8 domestic funds also surpassed the broad index by over 5%; the highest at a 16.72% superior margin. Looking at the three large cap funds in particular that are most closely correlated to the S&P 500, the Laudus US Large Cap Growth Fund returned 5.40% above, the SunAmerica Focused Dividend Strategy W Fund returned 7.68% above, and the iShares Russell 1000 Value returned .30% below the broad index.

Internationally, both foreign funds surpassed the MSCI EAFE by at least 2.5%, with the greater of these just under 5% better.  Lastly for fixed income, four of the five surpassed the Barclays US Aggregate Bond index by at least 2.50%.

Overall, 13 of the 15 funds highly correlated to one of the three major broad indexes surpassed the associated index in 2013.

 When examining each of the 18 funds compared to their specific category index, 14 were able to outperform, with half of those outperforming by at least 5%.

 Overall we were very pleased with how our funds performed both compared to their specific category and broader indexes.  Because of the uncertainty in any particular asset class from one year to the next, a well balanced and diversified approach can add greater stability and limit volatility in your client’s progress towards their financial goals.

All performance numbers obtained through Morningstar Principia ending 12/31/2013

2013 Capital Gains Awareness

stockgainsAs there has been a five year run up in the market from 2008, many mutual funds are realizing more substantial capital gains than they have over the past few years.  This is particularly true of the more aggressive, domestic equity funds, with some choosing to realize double digits in capital gains for 2013.  While the majority of these are long term in nature, it is nonetheless an item to be aware of with tax season approaching for your clients.

This is true for some of the Buy/Hold Plus funds as well, particularly in the domestic growth categories.  However, none are close to double digits for realized capital gains, and most are moderate in nature of only a few percentages or less.  While no one enjoys paying tax on gains, you are in a great position to help clients remember that this results from a very successful run up in the market.  Additionally, most clients have the majority of their investments in tax-deferred or tax-free assets such as IRAs, Roth IRAs, 401(k)’s, etc. which these taxable events will not affect.