Originally Posted by
First Break
Not for nothing.. you dont have to "blindly accept" anything. The PWA language is fully transparent as to how the money is invested. Ill quote in case you dont have a PWA handy:
"The investment strategy for the MBCBP will target an allocation of:
a. 40% to global public equity markets in a manner similar to the MSCI All Country World Index
b. 60% to U.S. intermediate bonds in a manner similar to the Bloomberg US Aggregate Bond Index."
According to the documentation from last summer, this allocation closely tracks the "LIRIX" fund offered by Blackrock. The summary prospectus from that fund states:
"As of March 31, 2024, the Fund held approximately 41% of its assets in Underlying Funds designed to track particular equity indexes, approximately 59% of its assets in Underlying Funds designed to track particular bond indexes"
On a cursory look, my MBCBP investment return tracks almost perfectly with LIRIX, as advertised.
How is the MBCBP not "transparent" if a) it is fully disclosed how the funds are invested (just like any other public fund), and b) it tracks very closely to a public fund that was disclosed before you opted into the plan. If you could look on your Fidelity account and see the money attached to the "LIRIX" ticker symbol, would that feel more "transparent" to you?
FWIW, based on the performance of LIRIX in May, Id fully expect a positive allocation. Regardless of that, performance over one month means absolutely nothing when discussing investment options for retirement. Ask anyone who was in VOO or QQQ during 2022. Some months were bloodbaths. That does not mean that VOO or QQQ are bad investments over time, quite the contrary.
It is a shadow fund (by shadow I mean a private account that perfectly outlines the investments of a public mutual fund, not some clandestine description) supposedly invested to mimic LIRIX holdings and returns. There are no public or private reports on the program investments therefore I have no way of verifiing how it is apportioned. As a private independent account it has no transparancy disclosures required AFAIK. We have 0 funds invested in the LIRIX fund or any public fund that must comply with public disclosure rules. And the target indices above were for reference as to how the funds were intended to be invested. All I'm asking for is a statement that says exactly how they are currently invested and how the returns were calculated. I don't think this is an outragious ask especially after multiple negative allocations. If it tracks LIRIX perfectly, then that would be an easy disclosure and serve to further credibility of the manager. I am patient and will wait for the total year returns but I now see the lack of disclosure as a flaw. I will probably have $300K invested in this vehicle by the time I retire.