The Money Mustache Community

Learning, Sharing, and Teaching => Investor Alley => Topic started by: Triple7Stash on June 27, 2019, 09:35:31 AM

Title: BlackRock & Northern Trust Index Funds - CA State Employee's Wanted!
Post by: Triple7Stash on June 27, 2019, 09:35:31 AM
Hello All,

My employer (I am California state employee) sponsored 401k/457 plan is administered through SavingsPlusNow (accounts managed by Nationwide) offers only four stock index funds.  From my understanding, these index funds seem fairly reasonable with low expense ratios.  Below are the links to the summaries for the funds, any thoughts?

BlackRock Large Cap Index Fund - Expense Ratio 0.06%
https://nationwidefinancial.com/media/pdf/NRX-0336CA-CA.pdf?_ga=2.246767747.600737209.1561648554-460166523.1561648554 (https://nationwidefinancial.com/media/pdf/NRX-0336CA-CA.pdf?_ga=2.246767747.600737209.1561648554-460166523.1561648554)

BlackRock Mid Cap Index Fund - Expense Ratio 0.08%
https://nationwidefinancial.com/media/pdf/NRX-0338CA-CA.pdf?_ga=2.246767747.600737209.1561648554-460166523.1561648554 (https://nationwidefinancial.com/media/pdf/NRX-0338CA-CA.pdf?_ga=2.246767747.600737209.1561648554-460166523.1561648554)

Northern Trust Small Cap Index Fund - Expense Ratio 0.08%
https://nationwidefinancial.com/media/pdf/NRX-0342CA-CA.pdf?_ga=2.246767747.600737209.1561648554-460166523.1561648554 (https://nationwidefinancial.com/media/pdf/NRX-0342CA-CA.pdf?_ga=2.246767747.600737209.1561648554-460166523.1561648554)

Northern Trust International Index Fund - Expense Ratio 0.12%
https://nationwidefinancial.com/media/pdf/NRX-0334CA-CA.pdf?_ga=2.246767747.600737209.1561648554-460166523.1561648554 (https://nationwidefinancial.com/media/pdf/NRX-0334CA-CA.pdf?_ga=2.246767747.600737209.1561648554-460166523.1561648554)

I am split between them roughly something like 30% intl, 30% small, 25% mid, and 15% lrg ( I am 27 years old and at least 10 years from FI).  If any of these options seem inferior, I also have the ability to open a schwab account within my employer sponsored 401k, which would allow me to invest in basically anything (would most likely be Vanguard Index Funds).  However, I'm not too familiar with this process and believe it may open me up to additional transaction fees within the Schwab account.
https://www.savingsplusnow.com/iApp/tcm/savingsplusnow/learning/library/self_directed_brokerage_account.jsp (https://www.savingsplusnow.com/iApp/tcm/savingsplusnow/learning/library/self_directed_brokerage_account.jsp)

Any direction or advice would be greatly appreciated!
Title: Re: BlackRock & Northern Trust Index Funds - CA State Employee's Wanted!
Post by: josh4trunks on July 04, 2019, 09:01:04 AM
Also a CA state  employee here. Our expense ratio's are all pretty decent, only 1-3BP difference from vanguard.

I personally factor in on other investments I have (wife's 403b options, vanguard for IRA / taxable accounts).
I try to get a market cap weighted blend of large/mid/small/int, without being too strict. While trying to maintain the lowest possible expense ratio.

I personally wouldn't use with the Schwab account.
Title: Re: BlackRock & Northern Trust Index Funds - CA State Employee's Wanted!
Post by: MustacheAndaHalf on July 05, 2019, 12:02:50 AM
Although Vanguard's "Small" Cap fund has a lower expense ratio, it's mostly mid-cap stocks (59% according to Morningstar data).  Since Northern Trust's Small Cap fund holds 23% mid-caps (the rest small/micro), it's actually a better small cap fund, in my view.  Despite the higher expense ratio (0.08% vs 0.05%).

Your allocations seem fine.  You might want to read up on small cap performance.  Small caps don't always outperform, so you need to be prepared to weather the times when that happens.  Reinforcing your views may help.  Larry Swedroe favors small cap value stocks, so you could read one of his books.