Author Topic: 401(k) options  (Read 2316 times)


  • 5 O'Clock Shadow
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401(k) options
« on: April 23, 2015, 08:31:03 AM »
Hi all,

I'm fairly new to investing. I have been contributing to my 401k for around two years now, but have been using the "advice access" services provided. I noticed it was investing large amounts into the some of the options with the larger expense ratios. I'm looking for some advice on choosing from the options below. The only other retirement account I have right now is a Roth IRA with Betterment with a 90/10 stock/bond allocation. Here are the options we currently have:

-America Euro Pacific (RERGX) .49%
-American Growth Fund (RGAGX) - .33%
-Artisan Mid Cap Fund Instl (APHMX) - .95%
-Artisan Mid Cap Value Fund Inv (ARTQX) - 1.19%
-Blackrock Emergin Market Ind (ZEMERT) - .20%
-Blackrock Extended FD CL K (BEEMT) - .12%
-Blackrock MSCI EAFE Eqty NL (BCMMT) - .08%
-Dodge & Cox International (DODFX) -.64%
-Hotchkis and Wiley SML CP (HWSIX) - 1.00%
-MFS Value FD R5 (MEIKX) - .55%
-Morgan Stanley GLBL Real (MRLAX) - 1.02%
-Parametric Emergng Markets (EIEMX) - 1.13%
-Vanguard Explorer Admiral (VEXRX) - .35%
-Vanguard REIT Index (VGSNX) - .08%
-Vanguard Total Bond MKT Index (VBMPX) - .05%
-Vanguard SHRT TRM BD INDX INST (VBITX) - .07%
-Vanguard INTER Term Treas ADM (VFIUX) - .10%

We also have a Vanguard Employee Benefit Index Fund that tracks the S&P 500 Index with a .02% Expense Ratio.

Thanks in advance for your help


  • 5 O'Clock Shadow
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Re: 401(k) options
« Reply #1 on: April 23, 2015, 09:26:22 AM »
I'd start with determining what sort of asset allocation you are comfortable with - not in your 401K, but across your entire investing portfolio.

If you end up with a heavy weighting in equities, and the S&P 500 can help with that, then I'm hopeful that the math will allow you to put ALL of your 401K in the S&P 500 option for 2 basis points - you won't be able to beat that anywhere.

Then, outside of your 401K, you can invest in Vanguard funds that cover whatever is missing in your ideal asset allocation. Vanguard has value funds, international funds, emerging market funds, etc. - all way cheaper than the options in your 401K.

I think a lot of folks try to optimize their asset allocation within a 401K, but when you have some cheap / good index options and some really expensive other options, it's best to not view your 401K in a silo but as part of your total portfolio.

And I guess one added bit - if the rest of your portfolio is really modest, you can probably find a lot of savings ideas on this site :-)


  • Handlebar Stache
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Re: 401(k) options
« Reply #2 on: April 23, 2015, 09:59:15 AM »
The Vanguard Employee Benefit Index Fund.


  • Walrus Stache
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Re: 401(k) options
« Reply #3 on: April 23, 2015, 01:39:02 PM »
You have some nice low-fee options for large-cap US stocks (Vanguard Employee Benefit Index Fund), other US stocks (BlackRock Extended Market), international developed-market stocks (BCMMT), emerging market stocks (ZEMERT), REITs (Vanguard REIT fund) and bonds (three Vanguard funds). Sounds like you should be able to make pretty much any asset allocation work with fees that are close to (or below!) what you would get on your own through Vanguard.

So now the question becomes what you want your asset allocation to be. What percentage of your money do you want in stocks? Bonds? REITs? What fraction of the stock allocation do you want to put in international companies? Do you want to throw emerging markets into the mix, or do you want to stick with more developed countries? Do you want to have your stocks follow a strict market cap weighting, or do you want to emphasize small-cap or large-cap options more? These are decisions you'll have to make for yourself.