UPS Final Presentation****

Bond selection 15 bond allocation government t note

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Bond Selection 15% Bond Allocation Government T-Note Yield 1.034% Expiration 02/15/2018 Investment Grade Microsoft Kellogg Yield 2.014% 4.646% Expiration 10/01/2020 04/01/2031 S&P Rating AAA BBB+
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Individual Bonds’ Week- to-Week % Returns 0 2 4 6 8 10 12
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Treasury Bill’s Yield
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Corporate Bond’s Yield
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Portfolio Comparisons Recommended Percentage Return: 85% stocks and 15% bonds (85% x 1.56%) + (15% x .51%) 1.40% Actual Portfolio’s Percentage Return: 6.53% UPS’ Current Percentage Return: 60 % stocks and 40% bonds (60% x 1.56%) + (40% x .51%) 1.14%
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Performance of Portfolio
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Analysis n Weighted Average Beta: 1.13 0 2 4 6 8 10 12
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Conclusion n Our 85% and 15% allocation proved to far exceed both the market and UPS’ original allocation n Given the opportunity, we feel we could add value to UPS’ pension plan and limit the deficit
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