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Tier 2: Self-Directed Funds

Building a more customized portfolio

Our Tier 2 funds allow you to tailor your retirement portfolio. We offer these funds to serve our participants who take an active interest in investing and have the knowledge to make their own asset allocation decisions—or who are working with a professional financial advisor to help determine their investment strategy.

Our Tier 2 funds include nine index funds administered by Vanguard, a leading global investment management company. They offer you choices across the spectrum of asset classes and volatility so you can customize your portfolio to meet your particular retirement goals and risk tolerance.

With an index fund, there is no manager who picks stocks or bonds. Instead, money invested in an index fund is used to buy the securities represented in a particular index. For example, an S&P 500 Index fund invests in each of the stocks in the S&P 500, which are bought and sold in proportion to their representation in the index at any given time.

RPB’s Reform Jewish Values (RJV) Fund is also within our Tier 2 fund offerings. This is a globally diversified fund that invests in the stocks of large- and mid-cap companies located throughout all major regions of the world, including the United States. It’s a passive fund that tracks the MSCI All Country World Index, and its fee is among the lowest of commercially available socially responsible investing mutual funds.1

  1. The RJV Fund fee is among the lowest of ESG strategies managed in separate account vehicles, based on eVestment data of 73 managed ESG funds.

Reform Jewish Values Fund

RJV Fund details

Benchmark

MSCI ACWI. The index represents approximately 85% of the global equity investment opportunity set.

Investment Objective

Long-term principal growth while reflecting Reform Jewish values priorities

Asset Allocation

A mix of stocks of large- and mid-capitalization companies located throughout all major regions of the world (all global developed and emerging markets)

Who should consider investing?

Investors who want to make a social impact with their investments and have the ability to tolerate short- to medium-term fluctuations in principal due to adverse economic conditions

Fee2
(basis points)

15 bps3

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  1. The investment management fee is a blended rate based on the fund’s total pool of assets: 15 bps for the first $10 million in assets and 10 bps for assets over $10 million. For example, if the fund value is $20 million, the annualized fee is 12.5 bps. Participants also pay an RPB Administration Fee (20 bps) and a Custody, Record Keeping, and Investment Consulting Fee (7 bps).
  2. As of 9/30/18.
RJV Fund alignment of investments with values

The RJV Fund’s holdings are guided by the resolutions of the Central Conference of American Rabbis (CCAR), Union for Reform Judaism (URJ), and the Commission on Social Action of Reform Judaism.

The fund uses the following investment screens to incorporate the environmental, social, and governance (ESG) priorities of the Reform Movement into the portfolio:

We avoid companies based on:

  • Issue: Predatory lending, civilian firearms, landmines, and cluster munitions
  • Industry: Tobacco and coal & consumable fuels
  • Geography: Companies that conduct business with the Sudanese government, based on the principles outlined by the Sudan Divestment Task Force

We place greater emphasis on companies with:

  • Better-performing environmental, social, and corporate governance practices
  • Practices or businesses that have a positive impact on the environment
  • Business ties to Israel

In addition to investment screens, we actively participate in shareholder proxy votes through Institutional Shareholder Services, a leader in SRI proxy voting. We also can join shareholder initiatives that promote change in corporate practices related to ESG issues through Aperio Group’s relationship with As You Sow.

RJV Fund’s ESG profile versus the benchmark
  • Social Score: Approximately 40% higher than the benchmark.4
  • Israel Exposure Score: 2x higher than the benchmark.5
  • Clean Technology Solutions Exposure: 2.5x higher than the benchmark.
  • Carbon Footprint: 80% lower than the benchmark.
  1. The weighted-average RPB Social Score is specific to the MSCI ACWI.
  2. Israel is a small percentage of the MSCI ACWI’s investable equity opportunity set.
Fund construction methodology

In partnership with Aperio Group, we created a socially responsible fund that reflects Reform Movement values using the following methodology:

RPB’s Values Task Force (with representatives from RPB, CCAR, URJ, and CSA) and Aperio interpreted and aligned CCAR, URJ, and CSA resolutions with currently available ESG criteria to create a values policy statement for RPB called a Social Profile.

Based on RPB’s Social Profile, we identified a desired Social Score for the fund that was better than the benchmark’s score and also met our financial risk requirements. The Social Score provides a basis for comparing our values-aligned portfolio to its benchmark, the MSCI ACWI.

Aperio used their proprietary model, along with our Social Profile and target Social Score, to select the fund’s securities and determine their relative weightings in the portfolio.

RPB’s Investment Committee reviewed the portfolio and financial risk metrics, and our board adopted the fund.

Jewish tradition teaches that we have a duty to help make our world a better place. Rabbi Tarfon, a great Jewish sage, taught: “It is not your responsibility to finish the work [of perfecting the world], but you are not free to desist from it either.”

– PIRKEI AVOT (Ethics of the Fathers), 2:16

Index funds overview

Tier-2-RPB-Risk-vs.-Reward-Graphic-713w 2x

Investing in a single Tier 2 index fund lacks asset diversification and can be a risky strategy. You should try to invest in a mix of Tier 2 funds to create a diverse portfolio.

Stock funds

Vanguard Institutional Index Fund

This fund tracks the performance of the S&P 500 Index, which measures the investment return of 500 large companies (as measured by market value) on U.S. exchanges. A moderate- to high-volatility investment, this fund offers a convenient way to match the performance of a substantial portion of the U.S. economy, with participation in every major industry and sector. Read the fact sheet

Vanguard Developed Markets Index Fund

This international-focused fund tracks the FTSE Developed All Cap ex-U.S. Index, which measures the investment return of a wide range of foreign companies in developed markets. A high-volatility investment, it is subject to wider swings in prices than those generally experienced by funds focusing on U.S. companies. Read the fact sheet

Vanguard Small-Cap Index Fund

This fund tracks the CRSP U.S. Small Cap Index, which measures the investment return of the smallest 15% of publicly traded U.S. companies (as measured by market value). A high-volatility investment, it is subject to wider swings in prices than those generally experienced by funds focusing on larger U.S. companies. Read the fact sheet

Vanguard Emerging Markets Index Fund

This fund tracks the FTSE Emerging Markets All Cap China A Transition Index, which measures the investment return of a wide range of companies in developing economies around the world. A very high-volatility investment, the fund is subject to even wider swings in prices than those generally experienced by funds focusing on companies of any size in the U.S. or other mature markets or economies. In addition to the challenges inherent in less-mature economies, emerging market companies also face above-average risk from political and currency instability. Read the fact sheet

Vanguard stock fund details and comparisons
Vanguard Institutional Index Fund (VIIIX) Vanguard Developed Markets Index Fund (VTMNX) Vanguard Small-Cap Index Fund (VSCIX) Vanguard Emerging Markets Index Fund (VEMIX)

Benchmark

S&P 500 Index

FTSE Developed All Cap ex-U.S. Index

CRSP U.S. Small Cap Index

FTSE Emerging Markets All Cap China A Transition Index

Investment Objective

Capital appreciation

Capital appreciation

Capital appreciation

Capital appreciation

Asset Allocation

Stocks of large and established U.S. companies

Stocks of large, mid-sized, and small companies (as measured by market value) in mature economies outside the U.S.

Stocks of small, potentially fast-growing U.S. companies

Stocks of large, mid-sized, and small companies in developing economies, such as Brazil, Russia, India, China, and Taiwan

Who should consider investing?

This fund is often used as the core holding within the stock portion of an index fund portfolio. Investors in this fund may experience significant fluctuations in value or long periods of little or no growth of principal.

This fund is often used as the core holding within the international stock portion of an index portfolio. Investors in this fund may experience significant fluctuations in value or long periods of little or no growth of principal.

This fund is often used as a secondary holding in the U.S. stock portion of an index portfolio. Investors in this fund may experience significant fluctuations in value or long periods of little or no growth of principal.

This fund is often used as a secondary holding in the international stock portion of an index portfolio. Investors in this fund may experience significant fluctuations in value or long periods of little or no growth of principal.

Fee6
(basis points)

2 bps

6 bps

4 bps

10 bps

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  1. All participants also pay an RPB Administration Fee (20 bps) and a Custody, Record Keeping, and Investment Consulting Fee (7 bps).

Bond funds

Vanguard Short-Term Bond Index Fund

This fund tracks the Barclays U.S. 1-5 Year Government/Credit Float Adjusted Index, which measures the investment return of a wide range of fixed-income securities. This low-volatility investment holds securities issued by the U.S. government (70%) and American corporations (30%). Read the fact sheet

Vanguard Short-Term Inflation-Protected Securities Index Fund

This fund tracks the Barclays U.S. Treasury Inflation-Protected Securities 0-5 Year Index, which measures the investment return of a wide range of securities issued by the U.S. government. Income generated by this low-volatility investment can fluctuate in response to changes in interest rates and inflation. Read the fact sheet

Vanguard Total Bond Market Index Fund

This fund tracks the Barclays U.S. Aggregate Float Adjusted Index, which measures the investment return of a wide range of fixed-income securities in the United States. A low- to moderate-volatility investment, this highly diversified fund holds government, corporate, and international dollar-denominated bonds, as well as mortgage-backed and asset-backed securities. Read the fact sheet

Vanguard Intermediate-Term Corporate Bond Index Fund

This fund tracks the Barclays U.S. 5-10 Year Corporate Bond Index, which measures the investment return of a wide range of U.S. dollar-denominated, investment-grade, fixed-rate, taxable securities issued by industrial, utility, and financial companies, with maturities between 5 and 10 years. A low- to moderate-volatility investment, the fund is subject to above-average fluctuations in yield and price as a result of interest rate changes. The reward to investors is often above-average yield. Read the fact sheet

Vanguard bond fund details and descriptions
Vanguard Short-Term Bond Index Fund (VBITX) Vanguard Short-Term Inflation-Protected Securities Index Fund (VTSPX) Vanguard Total Bond Market Index Fund (VBTIX) Vanguard Intermediate-Term Corporate Bond Index Fund (VICBX)

Benchmark

Barclays U.S. 1-5 Year Government/Credit Float Adjusted Index

Barclays U.S. Treasury Inflation-Protected Securities 0-5 Year Index

Barclays U.S. Aggregate Float Adjusted Index

Barclays U.S. 5-10 Year Corporate Bond Index

Investment Objective

Interest income

Interest income and inflation protection

Interest income and moderate capital appreciation

Interest income

Asset Allocation

Short-term (1-5 years duration), investment-grade bonds issued by the U.S. government and industrial, utility, and financial companies.

Short-term securities (less than 5 years of duration) issued by the U.S. government, the principal of which is adjusted semi-annually based on inflation.

Investment-grade, U.S. dollar-denominated, fixed-rate securities (more than 1 year of duration) issued by the federal government, and by U.S. industrial, utility, and financial companies.

Intermediate-term (5-10 years duration) investment-grade, U.S. dollar-denominated, fixed-rate corporate securities.

Who should consider investing?

This fund is often used as a secondary holding within the bond portion of an index portfolio. Investors in this fund can tolerate only minor fluctuations in price and yield.

This fund is often used as a secondary holding within the bond portion of an index portfolio. Investors in this fund are seeking to protect their portfolio from sudden spikes in inflation.

This fund is often the core holding within the bond portion of an index portfolio. Investors in this fund can tolerate moderate fluctuations in principal value as they seek reliable income generation.

This fund is often used as a secondary holding in the bond portion of an index portfolio. Investors in this fund can tolerate moderate fluctuations in price and yield as they seek above-average yields.

Fee7
(basis points)

5 bps

4 bps

5 bps

5 bps

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  1. All participants also pay an RPB Administration Fee (20 bps) and a Custody, Record Keeping, and Investment Consulting Fee (7 bps).

Real estate fund

This sector-specific fund tracks the performance of the MSCI U.S. Investable Market Real Estate 25/50 Index, which measures the investment return of the stocks of U.S. companies that own and operate real estate. A moderate- to high-volatility investment, the Vanguard Real Estate Index Fund is subject to wider swings in prices than those experienced by funds focusing on a more diverse group of industries. This fund often generates dividend yields that are significantly higher than those of the average stock index fund. Read the fact sheet

Vanguard Real Estate Index Fund (VGSNX) details and description

Benchmark

MSCI U.S. Investable Market Real Estate 25/50 Index

Investment Objective

Income generation and capital appreciation

Asset Allocation

Companies that own and operate office buildings, hotels, shopping malls, apartment buildings, and other U.S. real estate, as well as real estate development and management companies via real estate investment trusts (REITs)

Who should consider investing?

This fund is generally used as a complement to the stock and bond portions of an index portfolio as REITs have historically delivered less-correlated performance. Investors in this fund may experience wide fluctuations in value or long periods of little or no growth of principal.

Fee8
(basis points)

10 bps

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  1. All participants also pay an RPB Administration Fee (20 bps) and a Custody, Record Keeping, and Investment Consulting Fee (7 bps).

Need help understanding how contributions work?

Our contribution page explains how it all works—for you and your employer.

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