Monday, February 26, 2024

Most Profitable Stock Market Pension Plans of USA

Equity pension plans rely on technology and their prospects are positive in the medium term

Recent news about the early availability of Pfizer’s vaccine and increasing clarity about the outcome of the US presidential election have injected a good deal of optimism into the stock market, which has taken the bullish path again.

And not precisely in the sectors most benefited by the pandemic. Last week there were increases in airlines, cruise lines and retailers, while telecommunication, consumer staples and software services lagged.

The VDOS category of USA International Variable Income pension plans , largely supported by the evolution of technology throughout the year, is the second most profitable in the year (3.23%), only behind Variable Income Emerging International (4.22%).

Of a selection of these five- and four-rated VDOS plans, the most profitable so far this year is ALLIANZ USA with an advance of 5.50 percent. At one year, it revalues ​​by 11.76 percent, with a fairly controlled volatility of 20.08 percent, which places it in the second best group for this concept.

Portfolio management takes the Standard & Poor’s 500 index as a reference, which represents the stock market performance weighted by capitalization of the 500 largest companies listed on the New York Stock Exchange. Exposure to currency risk is normally 100 percent in US dollars, although the fund is denominated in euros.

It is managed using third-party funds, part of them exchange-traded funds (ETFs), with the aim of optimizing management and diversifying risk. The limits applicable to investments in this type of assets are those established by law.

The plan can also invest in derivative instruments, with hedging and investment objectives, and always subject to the limits established by law. It applies to its participants a fixed commission of 0.30 and a deposit of 0.20 percent.

5.46 percent is the profitability obtained in the year by ABANCA USA . In the last year, it revalued 9.14 percent, registering a volatility figure of 20.84 percent. It invests up to 100 percent of its net assets in equities, with the possibility of reducing its exposure in favor of investing in fixed income with a maximum of 25 percent.

Investments in equities are carried out solely and exclusively in the US stock markets, always through adequate diversification of assets from a sectorial point of view, as well as an adequate combination of high and medium capitalization assets.

Among the largest positions in its portfolio we find the E-mini S&P 500 Future futures contract (43.51%) the Kingdom of Spain issuance for 5 years (37.84%) Electricity System Deficit Securitization Fund (2, 60%) the Amundi S&P 500 UCITS fund (1.41%) and the DB X-Trackers MSCI USA UCITS 1C listed fund (1.20%).

The minimum initial and periodic contribution to subscribe and maintain this plan is 30 euros, applying to its participants a fixed commission of 1.50 percent and a deposit of 0.10 percent.

Also with a four-star rating from VDOS, NARANJA STANDARD & POORS 500 has advanced 4.17 percent in profitability since last January. In the last annual period, it revalued 6.99 percent, registering in this period a volatility figure of 22.43 percent.

Its investment policy seeks to replicate the Standard & Poor’s 500 index. Investment decisions are made according to the criteria of the management team, investing in a variety of sectors of companies listed on the S&P 500 index. Being invested in dollars, its evolution is also linked to that of the US currency.

Its largest portfolio positions include the exchange-traded funds Lyxor S&P 500 ETF D EUR (25.50%) iShares Core S&P 500 ETF USD Acc (23.55%) XTrackers S&P 500 Swap ETF 1C (21.60%) Amundi IS S&P 500 ETF C EUR (19.37%) and the E-Mini futures contract on S&P 500 (3.29%). The subscription supposes a minimum initial and periodic contribution of 0.01 euros, taxing its participants with a fixed commission of 1.25 percent.

The outlook appears to remain bullish regarding the economic recovery and the revenues that companies will earn. However, in the short term, there are still some hurdles to be aware of for the major indices, such as long-term interest rate adjustments, as many of the large-cap indices, such as the S&P 500 and the Nasdaq, they are very sensitive to movements in interest rates.

Therefore, as interest rates rise, they can weigh down the performance of the indices. We must also consider the influence on the final result of the elections in terms of the configuration of the Senate.

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