BERRY PLASTICS CORPORATION – BERRY PLASTICS EMPLOYEES 401(K) RETIREMENT PLAN

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BERRY PLASTICS EMPLOYEES 401(K) RETIREMENT PLAN
EVANSVILLE, IN
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Summary

If you participate in this employer-sponsored plan, Sprout Capital Management, LLC may be able to help improve your portfolio return. The below results are for an aggressive investor, but the risk level can be adjusted to suit your particular circumstances. (Please contact us to get a customized review!)

Introduction

As an employee, making the right mutual fund selections in your employer’s retirement plan can be overwhelming. You often have a limited number of choices, which are pre-selected by your employer. You may be presented with multi-year performance numbers. You may be presented with Morningstar ratings. You may receive advice from a colleague, whose situation is different from your own. What information is important? How do you choose? Do you know how your employer retirement is plan currently invested, or why?

Sprout Capital Management, LLC (SCM) can help. First, SCM helps you determine how much risk is appropriate given your circumstances. Then, SCM helps you position your retirement account in an effort to maximize return for the risk taken, and actively suggests investment changes to maintain this risk profile. SCM believes that disciplined active management can produce much better outcomes for clients than typical, buy-and-hold portfolios.

Strategy Overview

The mutual fund selections available in the plan “BERRY PLASTICS EMPLOYEES 401(K) RETIREMENT PLAN” include:

Symbol Description
1 CASHX Advantus Money Market
2 VFINX Advantus S&P 500 Index
3 CHTTX AMG Managers Fairpointe Mid Cap
4 DFSTX DFA U.S. Small Cap
5 DFFVX DFA U.S. Targeted Value
6 DODFX Dodge and Cox International Stock Fund
7 GWGIX GW&K Small Cap Growth
8 LCEAX Invesco Diversified Dividend
9 AIIEX Invesco International Growth
10 LSBDX Loomis Sayles Bond Institutional Class
11 MWTNX Metropolitan West Total Return Bond Admin
12 FLCEX Pyramis Large Cap Core
13 TPINX Templeton Global Bond
14 VBIIX Vanguard Intermediate Term Bond Index
15 VSCGX Vanguard LifeStrategy Conservative Growth Inve…
16 VASGX Vanguard LifeStrategy Growth Investment
17 VSMGX Vanguard LifeStrategy Moderate Growth Investment
18 NVLIX Winslow Capital Large Cap Growth
19 TRLGX WINSLOW CAPITAL LARGE CAP GRO
20 MWTRX MET WEST TOTAL RETURN BOND ADM
21 VMEIX ADVANTUS MONEY MARKET
22 TEGBX TEMPLETON GLOBAL BOND, CL
23 VBILX VANGUARD INTRM BOND IDX INS
Note that if the employee plan has a cash-equivalent fund or trust (with “Stable Value”, “Guaranteed”, “FDIC Insured”, “Money Market”, etc., in the fund description), then that selection will be represented by “CASHX” in the tables above. CASHX assumes an interest rate of zero, but the plan’s cash-equivalent fund may earn a little interest.

SCM will help you regularly reallocate among these funds to manage risk and help maximize return.

SCM employs a systematic (rules-based) investment strategy, Program R, to perform this reallocation. This strategy takes into account your particular circumstances, the stock market environment, and the nuances of your employer’s plan. During stock bull markets, the strategy reallocates to the plan’s top-performing stock funds. When the economy enters a recession, SCM will try to lower risk by reallocating among the plan’s lower-risk funds, such as bond funds.

One feature of a rules-based strategy is the ability to “backtest”. A backtest demonstrates how a strategy would have (hypothetically) performed in recent years. Your employer’s funds represented by symbols in bold in the table above may not have enough history to perform a backtest. If the plan’s funds do not have 10 years of history, SCM’s backtest uses funds from other providers with similar market exposure and similar bottom-line performance. The funds used by the backtest are shown in the column “Backtest Symbol” in the table below:

Inception Backtest Symbol Backtest Inception
CASHX 1970-01-01 CASHX 1970-01-01
VFINX 1976-08-31 VFINX 1976-08-31
CHTTX 1994-09-19 CHTTX 1994-09-19
DFSTX 1992-03-19 DFSTX 1992-03-19
DFFVX 2000-02-23 DFFVX 2000-02-23
DODFX 2001-05-01 VGTSX 1996-04-29
GWGIX 2015-06-30 GWGIX 2015-06-30
LCEAX 2001-12-31 VIVAX 1992-11-02
AIIEX 1992-04-07 AIIEX 1992-04-07
LSBDX 1991-05-16 LSBDX 1991-05-16
MWTNX 2009-12-18 FUBFX 2009-09-24
FLCEX 2007-04-19 FUSEX 1988-02-17
TPINX 1986-09-18 TPINX 1986-09-18
VBIIX 1994-03-01 VBIIX 1994-03-01
VSCGX 1994-09-30 VSCGX 1994-09-30
VASGX 1994-09-30 VASGX 1994-09-30
VSMGX 1994-09-30 VSMGX 1994-09-30
NVLIX 2009-05-15 TLIIX 2007-11-30
TRLGX 2001-10-31 GCGIX 1997-05-01
MWTRX 1997-03-31 MWTRX 1997-03-31
VMEIX 2015-09-29 VMEIX 2015-09-29
TEGBX 1995-05-01 TEGBX 1995-05-01
VBILX 2001-11-12 SCOAX 1996-06-14
Strategy Results

20171016041234P030220093553001 ExternalPlot_BacktestvsFunds.jpg Strategy Comparison

The results are hypothetical results and NOT an indicator of future results and do NOT represent returns that any investor actually attained. “Program R”/”SCM Strategy” reflects SCM’s management fee of 1%. Results are net of fund expenses and reflect re-invested dividends or distributions, but do not reflect other fees that may be levied by the employer plan.

Sprout Capital Management, LLC’s strategy, Program R, produced a 12.3% cumulative annualized return since August 1997 in its backtest using the funds in this plan. As a point of comparison, the best performing fund in BERRY PLASTICS CORPORATION’s plan is “WINSLOW CAPITAL LARGE CAP GRO”, proxied by the symbol GCGIX, which produced a 9.8% cumulative annualized return over the same time frame. (It is unlikely that you would have bought and held this fund and only this fund over that time frame, so your return is likely lower than 9.8% for a comparable period!) Sprout Capital Management, LLC may help increase your returns.

A steep loss, also known as a drawdown, can be disruptive if you react to the loss by selling in panic. We believe you are more likely to continue using a strategy if you know how it has performed in a backtest. Since August 1997, Program R experienced a 21.4% maximum drawdown. By comparison, GCGIX, the top-performing fund in the plan, experienced a 52.5% maximum drawdown. Sprout Capital Management, LLC may help lower your risk.

The following table lists the cumulative annualized return (AR) and maximum peak-to-valley drawdown (DD) for Program R, versus non-target-date funds in the plan, starting from August 1997:

AR – Annualized % Return DD – Maximum % Drawdown AR/DD Ratio Description
Program R 12.3 21.4 0.57
GCGIX 9.8 52.5 0.19 WINSLOW CAPITAL LARGE CAP GRO
TLIIX 9.8 50.0 0.20 Winslow Capital Large Cap Growth
DFSTX 9.5 57.5 0.17 DFA U.S. Small Cap
DFFVX 8.5 58.7 0.15 DFA U.S. Targeted Value
VFINX 8.3 54.0 0.15 Advantus S&P 500 Index
FUSEX 8.3 54.0 0.15 Pyramis Large Cap Core
CHTTX 8.2 58.3 0.14 AMG Managers Fairpointe Mid Cap
VIVAX 7.2 57.1 0.13 Invesco Diversified Dividend
VASGX 5.4 50.4 0.11 Vanguard LifeStrategy Growth Investment
LSBDX 5.2 30.6 0.17 Loomis Sayles Bond Institutional Class
TPINX 5.1 13.8 0.37 Templeton Global Bond
VSMGX 5.0 40.6 0.12 Vanguard LifeStrategy Moderate Growth Investment
TEGBX 4.7 14.3 0.33 TEMPLETON GLOBAL BOND, CL
MWTRX 4.7 9.2 0.51 MET WEST TOTAL RETURN BOND ADM
VSCGX 4.4 30.4 0.14 Vanguard LifeStrategy Conservative Growth Inve…
VBIIX 4.2 9.1 0.46 Vanguard Intermediate Term Bond Index
AIIEX 2.2 52.4 0.04 Invesco International Growth
SCOAX 1.5 14.1 0.10 VANGUARD INTRM BOND IDX INS
VGTSX 1.3 60.4 0.02 Dodge and Cox International Stock Fund

The results are hypothetical results and NOT an indicator of future results and do NOT represent returns that any investor actually attained. “Program R”/”SCM Strategy” reflects SCM’s management fee of 1%. Results are net of fund expenses and reflect re-invested dividends or distributions, but do not reflect other fees that may be levied by the employer plan.

Self-Directed Brokerage Account

A self-directed brokerage option (SDBA), if your employer plan has one, is a flexible alternative to employer-selected mutual funds. An SDBA is held in trust for your employer plan at a broker custodian, such as Fidelity, Charles Schwab or TD Ameritrade. An SDBA allows you to invest in a wide array of securities, such as individual stocks and exchange-traded funds (ETFs). Sprout Capital Management, LLC can manage SDBAs through a limited power-of-attorney that you provide to the broker custodian.

Using an SDBA may help increase returns further. SCM invests SDBAs, IRAs, and other brokerage accounts in a separate strategy, Program A. Program A is a systematic strategy that invests in individual stocks. Program A may be used as a complement to Program R.

Our records show that your employer’s plan has an SDBA option. Our information is not complete for all plans, so it is worth double-checking your plan materials. If your employer plan does in fact have an SDBA option or you have an IRA or taxable account, please click here to learn more about Program A!

Contact Us!

Of course, you may not be an aggressive investor. Not everyone has the same risk tolerance, goals, financial capacity or perception of the market. Sprout Capital Management, LLC can tailor its strategies for your situation.

If you need help deciding how to manage your employer retirement plan or your IRAs and taxable accounts, please contact us to start a discussion!

Take the next step.

Find out how Sprout Capital can help manage your BERRY PLASTICS CORPORATION retirement account.

Disclaimer

Investment advisory services offered through Sprout Capital Management, LLC, a registered investment adviser. Mutual fund and other security price data sourced from Tiingo.com. Mutual fund selections for the retirement plan sourced from BERRY PLASTICS CORPORATION’s US Department of Labor filing. Mutual fund selection data not guaranteed to be accurate or current. Return and drawdown statistics are calculated on a time-weighted basis. Return and drawdown include the impact of fund expenses, but do not reflect the impact of all employer retirement plan restrictions and fees. Investments entail significant risks and are suitable only for certain investors as part of an overall diversified investment strategy and only for investors able to withstand a total loss of investment. Past performance is not an indication of future results. In addition, there can be no assurance that current investments will be realized as projected. Actual realized returns will depend on, among other factors, future operating results, the value of assets and market conditions at the time of disposition, any related transaction costs, taxes, and fees, and the timing and manner of sale, all of which may differ from the assumptions on which the information contained herein is based. It should not be assumed that any investments described herein were or will be profitable. Backtested performance should not be interpreted as an indication of actual performance. Backtested performance results have certain inherent limitations. Such results do not represent the impact that material economic and market factors might have on an investment adviser’s decision-making process if the adviser were actually managing client money. Backtested performance also differs from actual performance because it is achieved through the retroactive application of model portfolios designed with the benefit of hindsight. As a result, the models theoretically may be changed from time to time and the effect on performance results could be either favorable or unfavorable.

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