Yes. Because the MBCBP has been active for what, six months?? Pretty small sample size. But you've got it all figured out. I'm sure there will be no recessions or major downturns in the coming years, where a less volatile and risky position might come in handy.

 

It not entirely outdated. Feel free to DART R&I. You’re right that they invested it outside of LIRIX (fortunately for much smaller fees); however the portfolio almost exactly mirrors LIRIX which has that sweet MSCI ESG rating.

MSCI ESG Fund Ratings, 65% (or 50% for bond funds and money market funds) of the fund’s gross weight must come from securities with ESG coverage by MSCI ESG Research.

So sure, Black Rock would be a tired trope, but at the end of the day pilots’ money is being invested in underperforming assets that place far too much emphasis on ESG. That is simply fact.

 

if the assets were overperforming would anyone care?

 

Top 9 Holdings (97.49% of Total Assets)

jaydawg- not trying to pick a fight, but a quick google shows the top 9 holdings of LIRIX. None appear to be heavily ESG by design, more of a convenience of holdings if it truly is heavy ESG. IDK 🤷
eg Russel 1000 index isn’t an “ESG” holding per se.
I wouldn’t consider US Intermediate Bond fund ESG either, even though our govt is woke.
Looks like a bunch of indexes to me.


Symbol Company % Assets
BRGKX iShares Russell 1000 Large-Cap Idx K 23.35%
BIGBX iShares U.S. Intermediate Government Bond Index Fund 19.77%
BISBX iShares US Securitized Bond Index 14.61%
IXUS iShares Core MSCI Total International Stock ETF 12.28%
BICBX iShares U.S. Intermediate Credit Bond Index Fund 9.16%
TIP iShares TIPS Bond ETF 7.84%
BLGBX iShares US Long Government Bond Idx 6.09%
BKRDX iShares Developed Real Estate Idx K 2.22%
BLCBX iShares US Long Credit Bond Index 2.17%


Here’s the top holdings of the largest asset of LIRIX, BRGKX

Top 10 Holdings (28.85% of Total Assets)

SymbolCompany% Assets
MSFT
Microsoft Corporation6.39%
AAPL
Apple Inc.5.10%
NVDA
NVIDIA Corporation4.38%
AMZN
Amazon.com, Inc.3.31%
META
Meta Platforms, Inc.2.19%
GOOGL
Alphabet Inc.1.83%
BRK-B
Berkshire Hathaway Inc.1.57%
GOOG
Alphabet Inc.1.56%
LLY
Eli Lilly and Company1.34%
JPM
JPMorgan Chase & Co.1.18%

 

No fight, honestly pretty fair discussion. The top 10 of the Russell (BRGKX) mirrors the S&P. That fund has also done really well. It’s the only bright spot there. The ESG rating just needs 50% weight to factor in ESG in a fund that is this bond heavy. I think most govt funds qualify.

The other funds, the bonds really, have been complete trash. The BIGBX has returned a whopping .96% since inception. That’s better than most other bond funds which have been consistently losing money since the pandemic.

I guess we don’t need to turn this into a bond vs equity or investment risk discussion, but I don’t understand how so many people that are critical of US fiscal policy (and many others) still turn around and put their money somewhere that is heavy on US govt bonds.

Bonds have a time and place in portfolios, but I just don’t see the value in US govt bonds right now. I mean that from both a performance standpoint and ESG.

 

Show your math, please….

 

Thread summary:
My decision to chose X was better than your choice of Y. For supporting evidence let me submit a list of reasons irrelevant to your situation why my choice was better.


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“It’s a proprietary formula. I can’t go into great detail” Bernard Madoff


If I just blow this money think it was a bad return? It concerns me how many think they pay zero taxes on this money talking about being 35% ahead from the start.

 

I like that I don’t have to actively deal with receiving the money as cash, pay the highest marginal taxes on it in my highest earning years, every other week having to transfer the cash to an investment account, managing investments, and every time I consider a trade dealing with tax planning on unrealized gains. Maybe I’d end up with a few more shekels if I took this approach, but I’d rather not have it all in the orbit of my mind for multiple decades of my life.

Much like the pilots who retired with a full pension. I bet they never once worried about the ESG exposure of the pension fund. However, unlike the pension, an aggressive management team cannot steal this money.

After we raised the bar to 18% DC, SWA knocked it out of the park and raised it further to 20%. It’s a foregone conclusion we get 20% in the next contract. At that level of contribution, any pilot should be able to set their 401k allocations into a few solid index funds as a new hire, and let the MBCBP churn on autopilot and end up with a very comfortable retirement 30 years later with zero effort. Remember, the investment allocation of the MBCBP is negotiable as well, and I fully expect it will improve in the next round of negotiations.

This should be the goal of a collectively bargained retirement benefit. Set and forget, and spend your time off enriching your life in other ways.

Just my opinion only.


As the late great philosopher said- breathe in, breathe out, move on.

Everyone had their choice and they made it.

 

How did I miss that?

That said, much like UA having First Class DH, I'm not sure that us raising DC to 20% is a foregone conclusion.