External vs Internal Diversification: The Key to Retirement Asset Allocation, Craig Israelsen, September 2022

External vs Internal Diversification: The Key to Retirement Asset Allocation

Single ticker asset allocation mutual funds and ETFs are convenient, but they have serious drawbacks—particularly for retirees.

This webinar explores the concept of “external vs internal” diversification and demonstrates the value of using multiple funds rather than a single ticker asset allocation fund.

Vanguard Star, is a popular single ticker internally diversified portfolio used by many plan sponsors and individual retirement investors to own a broadly diversified portfolio. However, a multi-ticker portfolio comprised five tickers is more advantageous in the decumulation phase, offering more choices in taking annual income distributions from qualified plans and IRAs and greater tax-efficiency in taking distributions from taxable portfolios. The webinar will also feature a live demo of an Excel-based tool that allows advisors to test asset allocation models in real time.

What you'll learn:
● how to manage a broad group of asset classes in low-expense portfolio using multiple ETFs or funds to increase control in taking distributions.
● why a single ticker, such as Vanguard Star, is less efficient in taxable accounts and limits portfolio control in long term portfolio management of federally qualified plan assets and IRAs, as compared to a five-ticker portfolio with separate fixed-income, stock, health care, technology and foreign stock tickers.
● why multi-ticker portfolio diversification is especially advantageous in the decumulation phase of a retirement income portfolio.
the added diversification and rebalancing choices opened by using multiple tickers to manage low expense portfolios.
● how to illustrate key portfolio management concepts to investors
● return and risk statistics of a core portfolio invested for the long run     

Craig L. Israelsen, Ph.D., has been a regular contributor to Advisors4Advisors since April 2009, and has taught monthly on A4A for a decade. He also contributes regularly to AAII Journal, one of the nation’s largest individual-investor-funded information resources with a history of intellectual integrity. Prof. Israelsen has taught about family financial management at universities and is currently Executive-in-Residence in the Financial Planning Program at Utah Valley University, teaching classes toward earning a CFA charter. Published monthly in Financial Planning magazine for 25 years, Craig has a documented history for providing a sustainable system for advisors to manage low-expense portfolios.

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This webinar is eligible for one hour of CE credit towards the CIMA® and CPWA® certifications, CFP® CE and PACE credit toward the CLU® and ChFC® designations, and live CPA CPE credit.