Approved Investment List

Question 1

IVV

Answer 1

iShares Core S&P 500 ETF

1. Provider = Black Rock
2. Net Expense Ratio = 0.03%
3. Inception = 05/15/2000
4. Category = Large Cap Blend
5. SEC Yield (8/26/20) = 2.27%
6. Goal = The investment seeks to track the investment results of the S&P 500, which measures the performance of the large-capitalization sector of the U.S. equity market.
7. VERSUS SPY = Being the oldest U.S. equity ETF, SPY is structured as a Unit Investment Trust (UIT) with State Street serving as the trustee. It is therefore not allowed to reinvest dividends paid by underlying holdings but must hold them in cash until they are scheduled to be distributed to SPY shareholders. Additionally, SPY does not lend out securities from its portfolio to earn extra money. Meanwhile, iShares S&P 500 ETF does not have such restriction and can lend out shares to earn extra. IVV also reinvests dividends in the index until paid out quarterly, thereby increasing returns from the fund. SPY is the most actively traded ETF with average daily volume of around 108.7 billion and 0.09% in expense ratio. On the other hand, IVV is less liquid, trading in average daily volume of 6.2 billion, which ensures some additional cost in the form of marginal bid/ask spread. However, the iShares version costs just 4 bps in annual fees, 55% less than the State Street product.
8. Sectors:
   
   1. Tech = 24.50%
   2. Healthcare = 14.35%
   3. Financial Services = 12.84%
   4. Consumer Cyclical = 11.16%
   5. Communication Services = 11.04%
   6. Industrials = 8.42%
   7. Consumer Defensive = 7.42%
   8. Utilities = 2.94%
   9. Real Estate = 2.67%
   10. Energy = 2.44%
   11. Basic Materials = 2.23%

Question 2

SPY

Answer 2

SPDR S&P 500 ETF

1. Provider = SPDR State Street Global Advisors
2. Net Expense Ratio = 0.095%
3. Inception = 01/22/1993
4. Category = Large Cap Blend
5. SEC Yield (8/26/20) = 1.99%
6. Goal = The investment seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of the S&P 500® Index.
   
   1. VERSUS IVV= Being the oldest U.S. equity ETF, SPY is structured as a Unit Investment Trust (UIT) with State Street serving as the trustee. It is therefore not allowed to reinvest dividends paid by underlying holdings but must hold them in cash until they are scheduled to be distributed to SPY shareholders. Additionally, SPY does not lend out securities from its portfolio to earn extra money. Meanwhile, iShares S&P 500 ETF does not have such restriction and can lend out shares to earn extra. IVV also reinvests dividends in the index until paid out quarterly, thereby increasing returns from the fund. SPY is the most actively traded ETF with average daily volume of around 108.7 billion and 0.09% in expense ratio. On the other hand, IVV is less liquid, trading in average daily volume of 6.2 billion, which ensures some additional cost in the form of marginal bid/ask spread. However, the iShares version costs just 4 bps in annual fees, 55% less than the State Street product.

Sectors:

1. Tech = 24.20%
2. Healthcare = 14.14%
3. Financial Services = 12.93%
4. Consumer Cyclical = 11.39%
5. Communication Services = 11.46%
6. Industrials = 8.45%
7. Consumer Defensive = 7.38%
8. Utilities = 2.85%
9. Real Estate = 2.62%
10. Energy = 2.36%
11. Basic Materials = 2.23%

Question 3

VOO

Answer 3

Vanguard S&P 500 ETF

1. Provider = Vanguard
2. Net Expense Ratio = 0.03%
3. Inception = 09/07/2010
4. Category = Large Cap Blend
5. SEC Yield (8/26/20) = 1.69%
6. Goal = The investment seeks to track the investment results of the S&P 500, which measures the performance of the large-capitalization sector of the U.S. equity market.
7. VERSUS IVV and SPY= Same low expense ratio. VOO has lowest AUM of the three

Sectors:

1. Tech = 24.09%
2. Healthcare = 14.71%
3. Financial Services = 12.95%
4. Consumer Cyclical = 10.97%
5. Communication Services = 10.89%
6. Industrials = 8.24%
7. Consumer Defensive = 7.45%
8. Utilities = 3.13%
9. Real Estate = 2.80%
10. Energy = 2.54%
11. Basic Materials = 2.23%

Question 4

QUS

Answer 4

SPDR MSCI USA Strategic Factors

1. Provider = State Street
2. Net Expense Ratio = 0.15%
3. Inception = 04/15/2015
4. SEC Yield (8/26/20) = 1.95%
5. Category = Large Cap Blend
6. Goal = Seeks to track a Smart Beta index that blends low volatility, quality and value exposures together in a single strategy
   
   1. Low Volatility = Low Beta. A common assumption in finance is that increasing a portfolio’s risk exposure should generate a higher return. In contrast, the low volatility anomaly refers to the observation that historically, portfolios of lower-volatility stocks produced higher risk-adjusted returns than portfolios with high-volatility stocks. The Low Volatility factor has historically outperformed during late expansion and early contraction — when the market is moving downward from a peak to a trough.
   2. Value = emphasizes undervalued companies with characteristics for improved valuations. This style of investing is subject to the risk that the valuations never improve or that the returns on “value” equity securities are less than returns on other styles of investing or the overall stock market.
   3. Quality = emphasizes companies with high returns, stable earnings, and low financial leverage. This style of investing is subject to the risk that the past performance of these companies does not continue or that the returns on “quality” equity securities are less than returns on other styles of investing or the overall stock market

Sectors:

1. Tech = 27.71%
2. Healthcare = 15.70%
3. Financial Services = 12.45%
4. Consumer Defensive = 10.24%
5. Industrials = 8.34%
6. Consumer Cyclical = 7.54%
7. Communication Services = 7.26%
8. Utilities = 3.76%
9. Real Estate = 2.38%
10. Basic Materials = 2.37%
11. Energy = 2.26%

Question 5

GSLC

Answer 5

Goldman Sachs Active Beta U.S. Large Cap Equity

1. Provider = Goldman Sachs
2. Net Expense Ratio = 0.09%
3. Inception = 04/15/2015
4. SEC Yield (8/26/20) = 1.43%
5. Category = Large Cap Blend
6. Goal = Seeks to track a Smart Beta index that blends momentum, low volatility, quality and value exposures together in a single strategy
   
   1. Momentum = whether a company’s share price is trending up or down
   2. Low Volatility = Low Beta. A common assumption in finance is that increasing a portfolio’s risk exposure should generate a higher return. In contrast, the low volatility anomaly refers to the observation that historically, portfolios of lower-volatility stocks produced higher risk-adjusted returns than portfolios with high-volatility stocks. The Low Volatility factor has historically outperformed during late expansion and early contraction — when the market is moving downward from a peak to a trough.
   3. Value = emphasizes undervalued companies with characteristics for improved valuations. Factor score is based on a composite of book value-to-price, sales-to-price and free cash flow-to-price
   4. Quality = emphasizes companies with high returns, stable earnings, and low financial leverage. This style of investing is subject to the risk that the past performance of these companies does not continue or that the returns on “quality” equity securities are less than returns on other styles of investing or the overall stock market

Sectors:

1. Tech = 29.60%
2. Healthcare = 15.7%
3. Consumer Discretionary = 13.5%
4. Communication Services = 9.9%
5. Consumer Staples= 8.9%
6. Industrials = 7.7%
7. Financials = 6.5%
8. Utilities = 2.9%
9. Real Estate= 2.9%
10. Basic Materials = 1.3%
11. Energy = 0.9%

Question 6

VTSAX

Answer 6

Vanguard Total Stock Market Index Admiral

1. Provider = Vanguard
2. Net Expense Ratio = 0.04%
3. Inception = 11/13/2000
4. SEC Yield (8/26/20) =
5. Category = Large Cap Blend
6. Goal = designed to provide investors with exposure to the entire U.S. equity market, including small-, mid-, and large-cap growth and value stocks. The fund’s key attributes are its low costs, broad diversification, and the potential for tax efficiency. Investors looking for a low-cost way to gain broad exposure to the U.S. stock market who are willing to accept the volatility that comes with stock market investing may wish to consider this fund as either a core equity holding or your only domestic stock fund.

Sectors:

1. Tech = 23.41%
2. Healthcare = 14.96%
3. Financial Services = 12.72%
4. Consumer Cyclical = 11.56%
5. Communication Services = 10.20%
6. Industrials = 8.82%
7. Consumer Defensive = 6.82%
8. Utilities = 2.98%
9. Real Estate = 3.80%
10. Energy = 2.38%
11. Basic Materials = 2.37%

Question 7

IWF

Answer 7

iShares Russell 1000 Growth

1. Provider = Black Rock
2. Net Expense Ratio = 0.15%
3. Inception = 05/22/2000
4. SEC Yield (8/26/20) = 1.15%
5. Category = Large Cap Growth
6. Goal = This fund tracks the Russell 1000 Growth Index, which includes stocks representing the half of the Russell 1000 Index with strong growth prospects and high price/book ratios. Some holdings will inevitably fail to meet the market’s expectations, but this broadly diversified portfolio helps muffle their impact. This fund does not overload a particular sector. However, it is a little top-heavy, as the top 10 holdings represent nearly 40% of total assets. Like most its peers, the fund tends to overweight growth sectors, like technology and healthcare, relative to the broad market.
   
   1. FTSE Russell uses three variables in the determination of growth and value. For growth, two variables—I/B/E/S forecast medium-term growth (2-year) and sales per share historical growth (5-year) are used.

Sectors

1. Tech = 38.54%
2. Consumer Cyclical = 16.33%
3. Healthcare = 13.64%
4. Communication Services = 11.74%
5. Financial Services = 7.26%
6. Consumer Defensive = 5.10%
7. Industrials = 4.63%
8. Real Estate = 2.01%
9. Basic Materials = 0.6%
10. Energy = 0.07%
11. Utilities = 0.02%

Question 8

XLK

Answer 8

Technology Select Sector SPDR

1. Provider = State Street
2. Net Expense Ratio = 0.13%
3. Inception = 12/16/1998
4. Category = Large Cap Growth (Fund Technology)
5. SEC Yield (8/26/20) = 0.89%
6. Goal = Seeks to provide precise exposure to companies from technology hardware, storage, and peripherals; software; communications equipment; semiconductors and semiconductor equipment; IT services; and electronic equipment, instruments and components.
   
   1. Dominated by Apple and Microsoft = 45%

Tech Sub-Sectors:

1. Software = 33%
2. Tech Hardware Storage and Peripherals = 26%
3. IT Services = 20%
4. Semiconductors and Semiconductors Equipment = 17%
5. Communications Equipment = 2.85%
6. Electronic Equipment Instruments and Components = 1.81%

Question 9

IWD

Answer 9

iShares Russell 1000 Value ETF

1. Provider = Black Rock
2. Net Expense Ratio = 0.13%
3. Inception = 05/22/2000
4. Category = Large Cap Value
5. SEC Yield (8/26/20) = 3.21%
6. Goal = The iShares Russell 1000 Value ETF seeks to track the investment results of an index composed of large- and mid-capitalization U.S. equities that exhibit value characteristics.
   
   1. FTSE Russell uses three variables in the determination of growth and value. For value, book-to-price (B/P) ratio is used.

Sectors

1. Financials = 18.33%
2. Health Care = 14.08%
3. Industrials = 12.84%
4. Communication = 9.68%
5. Information Technology = 9.47%
6. Consumer Staples = 8.29%
7. Consumer Discretionary = 7.43%
8. Utilities = 5.71%
9. Materials = 4.66%
10. Energy = 4.58%
11. Real Estate = 4.56%

Question 10

HDV

Answer 10

iShares Core High Dividend ETF

1. Provider = Black Rock
2. Net Expense Ratio = 0.08%
3. Inception = 5/29/2011
4. SEC Yield (8/26/20) = 4%
5. Category = Large Cap Value
6. Goal = The iShares Core High Dividend ETF seeks to track the investment results of an index composed of relatively high dividend paying U.S. equities.
   
   1. Access to 75 dividend-paying domestic stocks that have been screened for financial health
   2. The Underlying Index is comprised of qualified income paying securities that are screened for superior company quality and financial health
   3. The Morningstar index methodology determines “company quality” in accordance with the Morningstar Economic MoatTM rating system, in which companies are expected to earn above-average profits and sustain their dividend. Stocks in the Underlying Index are designated as having a rating of either “narrow” or “wide” based on the prospect of earning above average returns on capital and the strength of the company’s competitive advantage
   4. Additionally, companies are screened for “financial health” using Morningstar’s Distance to Default measure, a quantitative option pricing approach that estimates a company’s probability of default.
   5. To qualify for inclusion in the Underlying Index, constituents must have a Morningstar Economic Moat rating of “narrow” or “wide” and have a Morningstar Distance to Default score in the top 50% of eligible dividend-paying companies within its sector.

Sectors:

1. Health Care = 22.31%
2. Energy = 18.60%
3. Communication = 16.48%
4. Consumer Staples = 10.14%
5. Utilities = 9.70%
6. Industrials = 8.35%
7. Info Tech = 6.98%
8. Financials - 4.09%
9. Materials = 0.83%
10. Consumer Discretionary = 0.75
11. Real Estate = 0.06

Question 11

SDY

Answer 11

SPDR S&P Dividend

1. Provider = State Street
2. Net Expense Ratio = 0.35%
3. Inception = 11/08/2005
4. SEC Yield (8/26/20) = 2.96%
5. Category = Large Cap Value
6. Goal = In seeking to track the performance of the S&P High Yield Dividend Aristocrats Index (the “Index”)
   
   1. The Index is designed to measure the performance of the highest dividend yielding S&P Composite 1500® Index constituents that have followed a managed-dividends policy of consistently increasing dividends every year for at least 20 consecutive years. Stocks included in the Index have both capital growth and dividend income characteristics, as opposed to stocks that are pure yield, or pure capital oriented, and must meet minimum float-adjusted market capitalization and liquidity requirements.

Sectors

1. Industrials = 19.32%
2. Financial Services = 17.79%
3. Consumer Defensive = 13.01%
4. Utilities = 9.98%
5. Consumer Cyclical = 9.11%
6. Basic Materials = 7.20%
7. Health Care = 6.56%
8. Real Estate = 6.23%
9. Energy = 5.34%
10. Communication Services = 3.80%
11. Technology = 1.66%

Question 12

IJH

Answer 12

iShares Core S&P Mid-Cap ETF

1. Provider = Black Rock
2. Net Expense Ratio = 0.05%
3. Inception = 05/22/2000
4. Category = Mid-Cap Blend
5. SEC Yield (8/26/20) = 2.32%
6. Goal = The iShares Core S&P Mid-Cap ETF seeks to track the investment results of an index composed of mid-capitalization U.S. equities. Great option for exposure to mid-cap stocks, though it has a smaller market-cap orientation than most of its peers

Sectors

1. Industrials = 17.71%
2. Technology = 16.17%
3. Financial Services = 14.15%
4. Consumer Cyclical = 14.10%
5. Healthcare = 11.22%
6. Real Estate = 9.42%
7. Consumer Defensive = 4.99%
8. Real Estate = 9.42%
9. Utilities = 3.29%
10. Communication Services = 2.17%
11. Energy = 1.91%