IFA Index Portfolio 50: Sea Green

Moderate: Suitable for investors who have at least 8 years before needing approximately 20% of their investments and are willing to accept a moderate degree of volatility in order to achieve moderate portfolio growth.

Index DataRolling PeriodsTop Ten HoldingsReturns MatrixFact SheetHi/Lo ComparisonRisk/Return Calculator
Below are methods for implementing this level of risk. Due to differences, returns will vary from the IFA Index Portfolio (see here).
Taxable
Accts		IRA
Accts		Taxable &
IRA Accts		401k/403b
Plans		Socially
Responsible		Environmentally
Conscious		Core
Allocation		Diversified
Index Managers

IFA Hybrid Taxable and Tax Deferred Accounts
Your percentage split may vary depending on investable assets per account. Please call an Index Funds Advisor to discuss your situation.
General Asset
Class Allocation		Specific IFA Index
Allocation		Combined Taxable and Tax Deferred
Account Allocation (Fund Symbols)		Number
of
Holdings**		Wtd
Avg
Mkt
Cap
(millions)**		Wtd
Avg
Book-to
-Market**
TaxableTax-
Deferred		Index Funds
24%US Large12.00%IFA US Large Company Index12.00%DFA Tax-Managed U.S. Equity (DTMEX)2,626$82,6740.55
12.00%IFA US Large Cap Value Index12.00%DFA Tax-Managed US Marketwide Value  (DTMMX)1,279$47,3081.03
12%US Small6.00%IFA US Small Cap Index6.00%DFA Tax-Managed U.S. Small Cap (DFTSX)2,062$9650.73
6.00%IFA US Small Cap Value Index6.00%DFA US Targeted Value (DFFVX)1,528$1,8591.02
6%Real Estate6.00%IFA Real Estate Index6.00%DFA Global Real Estate Securities (DFGEX)322$9,7680.74
12%International6.00%IFA International Value Index6.00%DFA International Value (DFIVX)533$40,2811.19
3.00%IFA International Small Company Index3.00%DFA International Small Cap Value (DISVX)2,230$1,2551.62
3.00%IFA International Small Cap Value Index3.00%DFA International Small Company (DFISX)4,806$1,3630.97
6%Emerging Markets1.80%IFA Emerging Markets Index1.80%DFA Emerging Markets (DFEMX)874$42,7090.6
1.80%IFA Emerging Markets Value Index1.80%DFA Emerging Markets Value (DFEVX)2,199$27,4221.06
2.40%IFA Emerging Markets Small Cap Index2.40%DFA Emerging Small Cap (DEMSX)2,619$1,2530.86
40%Fixed Income10.00%IFA One-Year Fixed Income Index10.00%DFA One-Year Fixed Income (DFIHX)nanana
10.00%IFA Two-Year Global Fixed Income Index10.00%DFA Two-Year Global Fixed Income (DFGFX)nanana
10.00%IFA Short Term Government Index10.00%DFA Short Term Government (DFFGX)nanana
10.00%IFA Five-Year Global Fixed Income Index10.00%DFA Five-Year Global Fixed Income (DFGBX)nanana
**As of December 31, 2011

An additional way that a passive advisor can add value is not just asset allocation but asset location. Specifically, for a client that has a mixture of taxable accounts, traditional IRAs, and Roth IRAs, it is often helpful to construct a single portfolio consisting of multiple asset classes that are divided up among the different accounts with the ultimate purpose of optimizing after-tax returns. Considerations in deciding which asset classes to place in different account types include the following:

  1. For Roth IRAs where all the investment growth is tax-free, the preference is to put in the asset classes that have the highest expected returns (which is equivalent to the highest risks). Examples include emerging markets and international small value.
  2. For traditional IRAs where the withdrawals are taxed as ordinary income, the preference is to put in the asset classes that are the least tax-efficient. Examples include real estate investment trusts (REITs) and fixed income.
  3. For taxable accounts, the preference is to utilize tax-managed funds wherever possible. Index Funds Advisors currently uses tax-managed funds in the following five asset classes: US large company, US large cap value, US small blend, US small cap value, and international value.

It is important for clients to understand that in a tax-hybrid portfolio, each of the accounts will have very different performance. If the client is not comfortable with this performance difference (e.g., a married couple where the wife's Roth IRA has a higher expected return than the husband's traditional IRA), then the tax-hybrid portfolio structure may not be appropriate. Furthermore, a good passive advisor will evaluate the purpose of each account to determine if it should be stand-alone or part of a hybrid structure. A special needs trust for a disabled child is an example of an account that should be its own portfolio. Establishing a tax-hybrid portfolio is only half of the task; maintaining and rebalancing the portfolio through all types of markets and client cash needs requires the skills that the passive advisor brings to the table. For example, if the client has a cash need from a taxable account, confining the sell trades to the single account may throw the portfolio out of balance. A good advisor will carefully consider how to trade all the accounts in unison with an eye towards tax-efficiency, minimization of transaction costs and maintenance of the client's designated risk level.


 

IFA Index Portfolio 50: Sea Green

Moderate: Suitable for investors who have at least 8 years before needing approximately 20% of their investments and are willing to accept a moderate degree of volatility in order to achieve moderate portfolio growth.

Index DataRolling PeriodsTop Ten HoldingsReturns MatrixFact SheetHi/Lo ComparisonRisk/Return Calculator
Below are methods for implementing this level of risk. Due to differences, returns will vary from the IFA Index Portfolio (see here).
Taxable
Accts		IRA
Accts		Taxable &
IRA Accts		401k/403b
Plans		Socially
Responsible		Environmentally
Conscious		Core
Allocation		Diversified
Index Managers
Call or Email
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Index Funds Advisors, Inc. — 19200 Von Karman Ave., Suite 150  —  Irvine, CA 92612  
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