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401k fund selection


muscleman
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Since my new employer does not allow brokerage window option, I have to put money into the mutual funds. Does anyone know if some of these funds are good ones?

 

ANJIX AllianzGI NFJ International Value Fund Institutional Class 0.95%

AVFIX American Beacon Small Cap Value Fund Class Institutional 0.92%

- American Beacon Small Cap Value Fund Investor Class 1.16%

RGAEX American Funds Growth Fund of America Class R-4 0.70%

BJBIX Artio International Equity Fund Class A 1.27%

IGFRX Invesco International Growth Fund Class R6 0.93%

PTTRX PIMCO Total Return Fund Institutional Class 0.47%

TRLGX T. Rowe Price Institutional Large Cap Growth Fund 0.57%

- T. Rowe Price New America Growth Fund 0.81%

- Target Retirement 2010 Trust II 0.13%

- Target Retirement 2015 Trust II 0.13%

- Target Retirement 2020 Trust II 0.13%

- Target Retirement 2025 Trust II 0.13%

- Target Retirement 2030 Trust II 0.13%

- Target Retirement 2035 Trust II 0.13%

- Target Retirement 2040 Trust II 0.13%

- Target Retirement 2045 Trust II 0.13%

- Target Retirement 2050 Trust II 0.13%

- Target Retirement 2055 Trust II 0.13%

- Target Retirement 2060 Trust II 0.13%

- Target Retirement Income Trust II 0.13%

VFINX Vanguard 500 Index Fund Investor Shares 0.18%

VEXRX Vanguard Explorer Fund Admiral Shares 0.34%

VEXPX Vanguard Explorer Fund Investor Shares 0.54%

VFTNX Vanguard FTSE Social Index Fund Institutional Shares 0.16%

VFTSX Vanguard FTSE Social Index Fund Investor Shares 0.29%

VINIX Vanguard Institutional Index Fund Institutional Shares 0.04%

- Vanguard Retirement Savings Trust III 0.16%

VSEQX Vanguard Strategic Equity Fund 0.29%

VBTIX Vanguard Total Bond Market Index Fund Institutional Shares 0.07%

VBMFX Vanguard Total Bond Market Index Fund Investor Shares 0.22%

VTSNX Vanguard Total International Stock Index Fund Institutional Shares 0.12%

VGTSX Vanguard Total International Stock Index Fund Investor Shares 0.32%

VWNAX Vanguard Windsor II Fund Admiral Shares 0.27%

VWNFX Vanguard Windsor II Fund Investor Shares 0.38%

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I'm dealing with the same problem, except through Fidelity. It sickens me that they won't let me pay $500, $1k, hell even $2k to access this brokerage window option. I guess they need to remind me that it isn't my money and that they need to make their fees on substandard funds :P

 

Anyway, looking at your list, I would say just put everything in the cheaper Vanguard Total International Stock Index you can afford. I don't know if I'd pay a 0.5% of more for a fund that itself holds 200-300 stocks when I can get the same exposure at a cheaper price. I'd prefer a international stock fund with a small and/or value bent, but I haven't seen one offered before.

 

If you had a small cap index and a large cap index (which you do with the S&P 500), you could consider a barbell strategy with half in each and keep the relationship in check with re-balancing whenever you choose.

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What is your overall allocation?

 

I'm assuming stocks in your  IRA and regular account are primarily U.S. based companies.

 

If those assumptions are correct, then you should get some cheap exposure to the fixed income and international stocks.

 

My choice:

VBTIX  Vanguard Total Bond Market Index Fund Institutional Shares  0.07%

VTSNX  Vanguard Total International Stock Index Fund Institutional Shares  0.12%

 

 

 

Your 401k looks really good by comparision to the average plan out there. I worked at a few places before and I would die to see some of those choices available at such a low expense ratio.

 

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Your best option here is to minimize costs and choose a small collection of the Vanguard funds in an asset allocation that is reasonable for you.

 

Also might want to clarify the distinction in your plan regarding the investor shares vs. Admiral shares vs. institutional shares.  For example, the VFINX and VINIX are both S&P 500 index funds with the difference, as far as I recall, being the amount of funds invested.  I'd think your plan would give you access to the institutional shares which has a significantly lower mgmt cost.  If so, the institutional shares of the VINIX and VBTIX should be the backbone of a cost-minimizing asset allocation strategy.

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Yeah, I would like to have Vanguard Index Funds available. The Fidelity alternatives are pricier.

 

Here's a question. Is there any problems in holding an international index fund in an IRA/401k/other retirement account? You don't have to worry about filing to get extra taxes paid on dividends overseas back do you?

 

Can the answer to the above be extended to international based mutual funds in general?

 

Thanks :)

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I think you should be more concerned about asset class returns, since even the active funds within this list are mostly index huggers. So the investment you make in any of the above funds would be driven almost entirely by the performance of the relevant index. Given the expected returns of most broad asset classes seems to be truly horrible at current valuations (GMO, Hussman, etc) it might be prudent to just stick to cash if you are forced to invest in the above funds only.

 

Vinod

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