Managed Models

The vast majority of a portfolio’s return comes from how that portfolio is allocated; only a small portion comes from picking the right investment vehicles. 

Said another way:  Picking the best mutual fund in every asset class will not do you much good if your allocation is not correct.  This is why we created the MCA Managed Models.

There are six models to choose from, ranging from very conservative to very aggressive.  With an MCA Managed Model you are getting the full support of MCA including, diversification, allocation, vehicle selection and monitoring.       

  • The models are all made up of a combination of equity (e.g., stock) and fixed income (e.g., bond, cash etc.) asset classes, with the Very Conservative model having only a small amount of equity exposure and the Very Aggressive having a large amount of equity exposure.

  • All models are designed to provide broad diversification across a wide variety of asset classes.  We also use as investment vehicles mutual funds that are low cost and broadly diversified.

  • Models are continuously monitored, evaluated and modified as necessary given market capitalizations, economic outlook, interest rates and many other factors.

  • Accounts that are invested in a particular model will change as and when the makeup of the model changes.

  • Likewise, mutual funds within the models are also regularly evaluated from a performance, cost and fiduciary score standpoint and, as and when appropriate, they are changed as well.  This insures that participants in each model will have the best potential return for the risk assumed. 

We believe that for the vast majority of plan participants, choosing one of the MCA Managed Models is the best alternative when compared to the MCA Select Funds option.  By most accounts, approximately ninety percent of a portfolio’s return comes from how that portfolio is allocated, which is why making sure that allocation is done properly is essential and best left to investment professionals.  Most participants’ time is better spent assessing their own personal and family financial situation than it is putting together and continuously monitoring a portfolio that they may not have the time, interest, ability or focus to do properly.                                                                 


How you decide what model is right for you is based on many factors: 

  • There is no single mix of equities and fixed income that is right for everyone.

  • You must decide how much risk you are comfortable in taking on, balancing any concerns about market risk (which might cause one to lean towards a more conservative model) against making sure you have enough assets with which to retire (which might cause one to lean towards a more aggressive portfolio).

  • Generally speaking, however, if you are young (in your 20s or 30s) and retirement is a good 25 or more years away, you can probably tolerate (and probably should strongly consider) a more aggressive model.

  • As you get older and have less time to recoup any market losses or absorb market volatility, you likely will want to gradually scale back and migrate to a more conservative model, understanding that with longer life expectancies, most of us will need to keep some meaningful exposure to equities in order to keep the growth potential of our retirement accounts strong.

  • Other factors to consider include any non-403(b) assets (e.g., a pension, savings, other assets, an expected inheritance) on which you will be able to rely in retirement, and what portion of your current income you want to “replace” in retirement.

 

(Download the PDF below for a larger viewing of the MCA Managed Models)

MCA Managed Models