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Learning, Sharing, and Teaching => Investor Alley => Topic started by: CRG on September 13, 2016, 06:04:51 AM

Title: Help Needed - New Job and Crappy Fund Options
Post by: CRG on September 13, 2016, 06:04:51 AM
I recently joined a new company that has unfortunately chosen American Funds as their primary fund option. While the funds aren’t necessarily “bad” funds, the fees are known to be high, particularly in comparison to Vanguard and others. The dilemma I’m facing is not whether to contribute, but specifically which funds to choose from the list below. The list includes the fund name and the respective annual gross operating expense, expressed as a percentage Note that I’m 38 and trying to play a bit of catch up, and that I’m comfortable with an aggressive approach. I’ll be contributing to the maximum allowed ($18k).

AF American Balanced Fund – 0.59%
AF EuroPacific Growth Fund – 0.83%
AF Fundamental Investors – 0.61% (S&P 500 Index)
AF Growth Fund of America – 0.65% (S&P 500 Index)
AF Income Fund of America – 0.55%
AF New Perspective Fund – 0.75%
AF New World Fund – 1.04%
Hotchkis & Wiley Value Opportunities Fund – 1.22% (S&P 500 Index)
Invesco Diversified Dividend Fund – 0.85% (S&P 500 Index)
Janus Triton Fund – 1.15%
JPMorgan Government Bond Fund – 1.12%
PIMCO Total Return Fund – 0.85%
Principal MidCap Fund – 1.00%
Templeton Global Bond Fund – 0.91%
Title: Re: Help Needed - New Job and Crappy Fund Options
Post by: Cromacster on September 13, 2016, 06:25:30 AM
AF Fundamental Investors – 0.61% (S&P 500 Index)

It's not great compared to Vanguard or Fidelity offerings, but this is the best option you have.  If it were me I would put it all in this fund.
Title: Re: Help Needed - New Job and Crappy Fund Options
Post by: DavidAnnArbor on September 13, 2016, 08:07:58 AM
Is there a brokerage option with this 401K that enables you to buy low cost ETF index funds?
Title: Re: Help Needed - New Job and Crappy Fund Options
Post by: CRG on September 13, 2016, 08:59:01 AM
Is there a brokerage option with this 401K that enables you to buy low cost ETF index funds?

No, not that I'm aware of.
Title: Re: Help Needed - New Job and Crappy Fund Options
Post by: BigHaus89 on September 13, 2016, 01:03:46 PM
AF Fundamental Investors – 0.61% (S&P 500 Index)

It's not great compared to Vanguard or Fidelity offerings, but this is the best option you have.  If it were me I would put it all in this fund.

I agree. You should double check if there is a self-directed account option you can open as well to invest in lower fee funds.
Title: Re: Help Needed - New Job and Crappy Fund Options
Post by: Proud Foot on September 13, 2016, 01:58:35 PM
I would do Fundamental Investors and would consider the Growth Fund.  Although they both use the S&P500 as a benchmark, neither is a S&P500 Fund.  Fundamental Investors has 218 holdings and Growth Fund has 372 holdings.  Of the top 10 holdings betwen the two, only 10 overlap (as of 7/31/16) so a combination of the two might be able to get you closer to the S&P500 than investing in only one fund.  Obviously your weightings will be different than the S&P500 though.  So really adding/not adding the Growth fund would be totally based on preference.