Please help read my Morningstar X-ray

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jerome99
Posts: 193
Joined: Tue Jan 10, 2012 8:38 am

Please help read my Morningstar X-ray

Post by jerome99 » Sun May 05, 2013 12:52 pm

For the first time I input all our funds and balances in the X-Ray and got the below results. Our AA target is 75 stocks/ 25 bonds. We also want 30% of the equity exposure to be international. We also want 15% of the equity exposure to be small/mid cap. Any help with reviewing the x-ray and how we are accomplishing the above is appreciated.

25 25 30

5 5 6

2 2 2

livesoft
Posts: 60938
Joined: Thu Mar 01, 2007 8:00 pm

Re: Please help read my Morningstar X-ray

Post by livesoft » Sun May 05, 2013 12:56 pm

That's just the 9-grid style box for equities that you presented. Not much to read there, but it looks very close to a US Total Market Index fund 9-grid style box:
24-24-25
06-06-07
03-03-03
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2retire
Posts: 367
Joined: Wed Jun 13, 2012 9:00 am

Re: Please help read my Morningstar X-ray

Post by 2retire » Sun May 05, 2013 2:01 pm

Each box represents the percent of your portfolio (with rounding error) that falls into each of the following categories.

Code: Select all

LgValue  LgBlend  LgGrowth
MdValue  MdBlend  MdGrowth
SmValue  SmBlend  SmGrowth
So, based on your break down, you have more than 15% in small and medium (5+5+6+2+2+2=22).

Be aware that the S&P 500, which is the 500 largest companies in the US, make up about 80% of the market. All of those companies fall in the large and medium categories. That means that the remaining 20% must make up the rest of the medium and all of the small category. Therefore, simply owning the whole market will give you more than 15% in small and medium. If you wanted to get down to 15%, you have to invest more in the S&P 500 and less in the total market.

Is there a particular reason why you want 15% in small and medium? Lots of people here tend to tilt toward the small category, is that what you are trying to accomplish?

jerome99
Posts: 193
Joined: Tue Jan 10, 2012 8:38 am

Re: Please help read my Morningstar X-ray

Post by jerome99 » Sun May 05, 2013 3:27 pm

Of all my investments, I thought only my vanguard extended market and vanguard total index had any small/mid exposure. Based on the fact that I have 22% according to the x ray, my two American Funds 401K options (growth fund of Am and wash mutual) must have some exposure. This true?

Concerning the X-ray only being equity, the lion's share of our bond exposure is TSP G Fund.

livesoft
Posts: 60938
Joined: Thu Mar 01, 2007 8:00 pm

Re: Please help read my Morningstar X-ray

Post by livesoft » Sun May 05, 2013 4:01 pm

Since the US total market index has 72% large-cap and 28% mid/small-cap, your 15% for small/mid desire is an underweight of the total market for this market-cap range.

If you want to see if any single fund has exposure, just put that single fund in an X-ray by itself.
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jerome99
Posts: 193
Joined: Tue Jan 10, 2012 8:38 am

Re: Please help read my Morningstar X-ray

Post by jerome99 » Mon May 06, 2013 8:28 am

Thanks. I was misinformed. I don't want to short this area. If all my international exposure is vanguard total intl index am I getting the appropriate intl small and mid cap allocation?

2retire
Posts: 367
Joined: Wed Jun 13, 2012 9:00 am

Re: Please help read my Morningstar X-ray

Post by 2retire » Tue May 07, 2013 11:55 am

jerome99 wrote:If all my international exposure is vanguard total intl index am I getting the appropriate intl small and mid cap allocation?
Yes.

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