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Important Consumer Disclosure:
Mainstay Capital Management, LLC is an investment advisor registered with the Securities and Exchange Commission. Due to various state regulations and filing requirements, Mainstay and its representatives may only provide investment advisory services in those states in which it is first appropriately registered or otherwise exempt or excluded from registration requirements. The purpose of this website is to provide the public with general information about the services offered by our investment management firm. Mainstay does not render personalized investment advice or services or effect, or attempt to effect any securities transactions, on this website. Our firm continuously monitors its filing requirements in all states, and will provide individualized advisory services only in accordance with various state regulations. Mainstay does not make any representations or warranties as to the accuracy, completeness, or relevance of any information prepared by any unaffiliated third party provider, whether linked to Mainstay's website or incorporated herein. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

International UAW

Funding Health Care Costs After Age 65

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Introduction

With over two dozen investment options available, the International UAW (Int’l UAW) plan is among the best in the country. With this large number of funds, there is ample opportunity to build a well-diversified portfolio for your 401(k) savings.

For your reference, we have provided a fund table displaying style, risk, and past performance for many of the funds in the Int’l UAW plan. In addition, please visit our “Fund Commentary” section for further information on specific funds and/or fund types within the Int’l UAW account.

To the right you will find articles of interest as well as news relating to International UAW employee and retiree benefits. Check this page for future updates to the Int’l UAW plan, as well as news that affects International UAW employees and retirees.

Fund Commentary

Fidelity's Freedom Funds

The Fidelity Freedom Funds are designed for those participants who wish to base their asset allocation decision on a specific target year. The account is typically aligned with the Freedom Fund that most closely matches the year in which you anticipate beginning to withdraw your savings for your retirement.

Six of these funds are included in the Int'l UAW plan, with 10-year incremental targets from 2000 to 2050, along with a fund targeted as Income Fund. The way the Freedom Funds are designed, the further away the target date, the more aggressive the asset allocation, conversely, the closer the date, the greater the emphasis on preservation of capital in the asset allocation.

Freedom Funds hold some appeal in that they are simple to explain and administer. While this approach is unique, we believe the asset allocation decisions provided by these funds are crude at best. Freedom Funds attempt to make decisions about asset allocation based solely on a target date. An investor’s tolerance for risk and financial goals are other key factors that should largely play a roll in determining the investment strategy and asset allocation. Additionally, they leave no room for the fund manager to tactically adjust the allocation strategy based on specific opportunities within the financial markets or in response to prevailing market conditions.

The returns realized in these commingled vehicles are diluted by a rigid adherence to mechanical allocation parameters. These parameters may prove to be shortsighted and inappropriate for everyone participating in the pool. The real world changes every day, yet proponents of Freedom Funds, or similar funds, expect someone to stick to a single game plan for as much as 40 years, whether interest rates are rising or falling, or whether the economy is in expansion or recession. While Freedom Funds offer a simple one-stop-solution, we continue to advise participants to avoid these funds and retain the flexibility to proactively adjust their portfolios as needed.

A Note on Institutional Funds

Many retirement savings plans, including the Int’l UAW, have moved to using institutional funds in place of retail mutual funds. In doing so the plan architects are moving to investment options with lower internal operating expenses. The institutional funds do not have the marketing costs associated with retail mutual funds that are ultimately passed along to the shareholders in the form of fund management expenses. The problem with institutional funds, however, is the lack of publicly available information about the funds that is so readily available for retail mutual funds through the fund family’s website or other data retrieval services. This is one of the drawbacks to institutional funds as investment options in the Int’l UAW plan. Because of the lack of publicly available information, the institutional funds within the plan are not detailed in our Fund Tables.

Please reference "Target-Date Funds Face Regulation", published in The Wall Street Journal.

Fund Table - July 31, 2010

The International UAW fund table provides critical data on investment options within the plan.

International UAW - Fund Table

If you have any questions concerning our website or your Int'l UAW account, please feel free to contact us using the following e-mail link: Mainstay@mainstaycapital.com or call us toll-free at 1-866-444-6246.

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