Archive for March, 2022

Inflation, Diversification and the 60/40 portfolio

Monday, March 28th, 2022

Inflation has been on the minds of 401(K) plan participants since 2021. There was a commentary written by Kevin DiCiurcio, head of the Vanguard Capital Markets Model® research team on October 15, 2021 that addresses Inflation, Diversification and Asset Allocation. The biography of Kevin is included below and here is the link to the commentary.

Please Click Here for the Commentary – Inflation, Diversification and the 60/40 Portfolio

The Directed Account Plan Tier I – Asset Allocation investment options are for the investor who does not wish to be actively involved in the investment process. These funds offer a convenient, low-cost way to access a sophisticated diversification strategy of stocks and bonds, professional money management, and periodic rebalancing. Funds may be selected based upon either anticipated retirement date or risk preferences. There are two choices within the DAP’s Tier I – Asset Allocation Funds:

Target Risk Funds

Target Retirement Funds

Half of the DAP participants are directly invested in a DAP Asset Allocation Fund and most stay the course investing to and through retirement. An example of a 60/40 portfolio is the the Target Risk – Conservative Fund  with an allocation of 60% to equities and 40% to fixed income investments.

Kevin DiCiurcio is a senior investment strategist in Vanguard Investment Strategy Group. He is head of Vanguard Capital Markets Model® research team, which designs models for asset class return forecasts and quantitative portfolio construction. Within the team, Mr. DiCiurcio is responsible for managing the asset allocation of multiasset portfolios using quantitative modeling tools. He also conducts research related to portfolio construction and fixed income investing. Prior to this, Mr. DiCiurcio designed portfolios for Vanguard’s institutional clients using quantitative asset allocation tools and previously worked in Vanguard Risk Management Group supporting fixed income investment risk. Mr. DiCiurcio earned a B.S. in finance from the University of Richmond and an M.B.A. from Villanova University. He is a CFA® charterholder.

Heads Up Newsletter April 2022

Monday, March 21st, 2022

The new April 2022 Heads Up newsletter is posted.

2021 Plan Investment Performance; Highlighting the Diversified Inflation/Real Return Fund

This newsletter reviews the DAP investment option menu and 2021 investment performance. The 2021 financial markets were strong and the DAP investment options performed well as you will see in pages two through five of this newsletter. But 2022 presents a much different picture as our country experiences the biggest surge in inflation in nearly 40 years. Therefore, this Heads Up feature article starts with an excerpt from the Empower Retirement Insights article titled, “Six Things You Need to Know About Inflation” and ends with a focus on a DAP investment option that was created as a hedge against inflation – the Diversified Inflation/Real Return Fund.

All of the past Heads Up Newsletters are posted under the Knowledge Center Tab, in the Heads Up Library. Here you will find investment education that transcends time.

Performance and investment details are updated monthly on this website under the Tracking Investments tab.

Please call the DAP Office at 314-739-7373 with questions.