Author Topic: American Funds portfolio equivalent to Vanguard?  (Read 1154 times)

rbnsf12

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American Funds portfolio equivalent to Vanguard?
« on: May 12, 2018, 04:50:18 PM »
Hello All,

I'm 25 and transitioning from VFFVX to 90% VTSMX + 10% VBMFX (eventually VTSAX and VBTLX once I reach mins). This will be for my Roth IRA primarily and something similar for taxable (minus the bonds).

With that being said, is anyone familiar with American Funds and what an equivalent (or close as possible) allocation would be? This is for my work's Simple IRA and unfortunately, don't see it changing anytime soon even though I've raised concern around the fees with my employer. I've been 100% in AATMX (equivalent to VFFVX) up to this point. I'm considering AGTHX + ABNDX but the fees/ERs associated with that vs. just sticking with AAMTMX to achieve a 90/10 allocation worry me.

Any insight would be appreciated. Thanks!
« Last Edit: May 12, 2018, 04:52:26 PM by rbnsf12 »

MDM

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Re: American Funds portfolio equivalent to Vanguard?
« Reply #1 on: May 12, 2018, 08:25:39 PM »
Sometimes it's best to pick the only 1 or 2 401k funds that match some part of your desired asset allocation, and adjust elsewhere as needed.   All too often an S&P 500 fund is the only one with a low-ish fee, but at least that's going to part of most people's desired asset allocation.

What are your choices and the respective fees?

rbnsf12

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Re: American Funds portfolio equivalent to Vanguard?
« Reply #2 on: May 12, 2018, 09:00:40 PM »
Sometimes it's best to pick the only 1 or 2 401k funds that match some part of your desired asset allocation, and adjust elsewhere as needed.   All too often an S&P 500 fund is the only one with a low-ish fee, but at least that's going to part of most people's desired asset allocation.

What are your choices and the respective fees?
Thanks for the response! That makes sense.

The fund I was looking into is AGTHX (0.64% ER, bleh, but better than 0.79% for AAMTX - the 2055 TDF). I'm basically just looking to mimic my Vanguard AA close as possible until I leave my current employer and can do a rollover. ABNDX for bonds is 0.61% if I wanted it but I'd also consider going 100% equities with American Funds - I've been reading a lot of JL Collins' blogs lately, which is what prompted me to re-allocate from the Vanguard TDF. :)

There might also be another fund other than AGTHX that would work, but that's the one that stands out to me between performance & ER.

So I guess the question would be AAMTX @ 0.79 vs AGTHX @ 0.64. I'm leaning towards AGTHX but only if that is doing what I think it's doing of getting me closer to my Vanguard AA if there's not another American Funds option that I overlooked.
« Last Edit: May 12, 2018, 09:13:39 PM by rbnsf12 »

Nate79

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Re: American Funds portfolio equivalent to Vanguard?
« Reply #3 on: May 12, 2018, 10:39:20 PM »
AGTHX is a good choice it sounds like.

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Radagast

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Re: American Funds portfolio equivalent to Vanguard?
« Reply #4 on: May 13, 2018, 01:00:59 AM »
Try to get a change to Schwab. That should be a no-brainer, win-win switch for everyone. Many American Funds funds are even available without commission there.

rbnsf12

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Re: American Funds portfolio equivalent to Vanguard?
« Reply #5 on: May 13, 2018, 01:04:42 AM »
Try to get a change to Schwab. That should be a no-brainer, win-win switch for everyone. Many American Funds funds are even available without commission there.
Good to know, thanks. I'll keep that in mind while I continue pestering them about reconsidering. lol

rbnsf12

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Re: American Funds portfolio equivalent to Vanguard?
« Reply #6 on: May 13, 2018, 01:12:46 AM »
AGTHX is a good choice it sounds like.

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Thanks, I'm thinking so too for the time being. The big distinction I could tell was AGTHX holds only 227 stocks compared to 3,600+ in VTSMX/VTSAX. But I guess that would just come to be expected from a fee-heavy actively managed vs. passive index fund approach.
« Last Edit: May 13, 2018, 01:24:43 AM by rbnsf12 »

MustacheAndaHalf

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Re: American Funds portfolio equivalent to Vanguard?
« Reply #7 on: May 13, 2018, 03:49:17 AM »
Expense ratios are significant - and actually the 3 American funds you mentioned have relatively lower expenses than other American funds I've seen.  It's not that 0.60% is that good - it's that most funds average about a 1.00% expense ratio.

I'd stick with the one fund that costs 0.40% and tracks the S&P 500.  That should be a core holding anyways, and you can diversify elsewhere for now.  When you leave that employer, you could turn the 401(k) into an IRA and select the funds yourself.


chasesfish

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Re: American Funds portfolio equivalent to Vanguard?
« Reply #8 on: May 13, 2018, 05:32:19 AM »
How long have you been in your simple?  Do you know you can roll it over after you've been in it for two years, even if you're still working with the employer.

We did 3 in-service Rollovers for my wife's Simple IRA, it was with a horrible high fee firm.

Bill_

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Re: American Funds portfolio equivalent to Vanguard?
« Reply #9 on: May 13, 2018, 07:18:49 AM »
Since you have a SIMPLE I assume you work for a small employer.  Since you work for a small employer you should note to your boss the retirement plan options suck.  Employers get sued all the time for offering only high fee options in their retirement accounts.

1) Get your employer to change to Schwab, they don't change any fees to the employer or employee to run a SIMPLE plan.

2) Roll your funds out of your current account into an IRA at a lower cost brokerage and deal with the current options.

rbnsf12

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Re: American Funds portfolio equivalent to Vanguard?
« Reply #10 on: May 13, 2018, 07:45:19 PM »
How long have you been in your simple?  Do you know you can roll it over after you've been in it for two years, even if you're still working with the employer.

We did 3 in-service Rollovers for my wife's Simple IRA, it was with a horrible high fee firm.
This is really good to know and no, I wasn't aware of that. It hasn't quite been 2 years yet but I'll definitely keep that in mind if they still haven't switched by then.