Is my company good or bad?

[MustacheCash]

I would like some recommendations from any Mustachian regarding the 401(k) options and my allocation thereof of my company (a large Fortune 100).  This is the only company I have worked for with a 401(k) (age 30) so I am not sure if what they offer is good or bad which is why I wanted to get some opinions on my fund choice and asset allocation.  Below is all the 401(k) funds available and my current funds/allocations are in bold.  The expense ratio follows the fund, then the return since inception (annualized), then what I have allocated is at the end.  Thanks so much!

Large
EB DL NonSL Broad Stock Index; ER .02%; 14.48%; AA 35%
Schwab Inst LC Value Trust Fund; ER .38%; 15.43%; AA 8%
JPMCB Large Cap Growth; ER .54%; 17.62%; AA 8%
Company Stock Fund; ER .007%; 19.67%; AA 2%

Small
EB DL NonSL Small Cap Stock Index; ER .03%; 8.40%; AA 14%
Prudential Jennison Small Company Z; ER .85%; 9.89%
Delaware Small Cap Value Instl; ER 1.00%; 11.40%

Foreign Large
Artisan International Growth Trust; ER .90%; 14.18%; AA 12%

Retirement/Target Date
Schwab Mngd Ret Trust Income; ER .35%; N/A
Schwab Mngd Ret Trusts (5) 2010-2050; ER .35%; N/A; AA 7% (I only have 2030)

Intermediate-Term Bond
PIMCO Total Return Instl; ER .46%; 7.91%; AA 14%

Stable Value
Stable Value Account; ER .34%; 4.52%

[Fuzzy Buttons]

I'll let others with more knowledge weigh in on the exact options, but I did want to take an opportunity to mention BrightScope.  You can enter your company name and get a rating of your 401(k) plan in terms of options, fees, etc.  I was also able to drill down into the financial statements for my company's plan and finally find the administrative fees.  Look under the tab for 5500 data.  Under "Basic Info" find the Net Assets.  Then under Financials find "Total Administrative Expenses".  I divided the two and got 0.2%.  I think that's what they are charging me, though I'm not sure where.  I'd be glad for a correction if someone knows more about it.

[J'onn J'onzz]

Just doing a quick look at what you have listed I would probably tend to consolidate all your large cap holdings into the EB DL NonSL Stock Index and ditch the other 2 large caps. As far as the company stock plan would depend if there is any discount for employee purchase if I kept that one.

Small caps look like you are already in the index and the other areas dont have many options so if you want to be in them what can you do.

[MustacheCash]

@FuzzyButtons:  I was not aware of this tool so thank you for bringing it to my attention.

@J'onn J'onzz:  Thanks for your reply.  I actually considered this, but I thought maybe I was already too much (35%) in this fund.  I am not really sure what the general formula is as far as this goes.  With consolidating all large cap, do you think 53% of my entire 401(k) in one fund is not too much?  Unfortunately, there is no discount for the company stock, but it has taken off like a rocket in the past couple of years so I just kept it at 2%.  Also, I agree with you though as I thought my options are a little weak for such a large company (which is why I asked on the forum)!

[dandarc]

There may be a lot of overlap of the stocks in those large cap funds - you may not be as diversified as you think by just having some in each one.  Something to check into.

[J'onn J'onzz]

@FuzzyButtons:  I was not aware of this tool so thank you for bringing it to my attention.

@J'onn J'onzz:  Thanks for your reply.  I actually considered this, but I thought maybe I was already too much (35%) in this fund.  I am not really sure what the general formula is as far as this goes.  With consolidating all large cap, do you think 53% of my entire 401(k) in one fund is not too much?  Unfortunately, there is no discount for the company stock, but it has taken off like a rocket in the past couple of years so I just kept it at 2%.  Also, I agree with you though as I thought my options are a little weak for such a large company (which is why I asked on the forum)!

I think if you looked at the holdings of all the large cap funds you will find that there is so much overlap in them you are not really getting any significant amount of diversification by spreading it around. My 401k options are pretty similar to yours and had a similar allocation to you but when I really started looking into it I just ended up moving all my large cap allocation into the index fund. I ended up with 65% large cap 15% mid caps, 20% international. I have all of those in low cost index funds. I probably need to get back into some bonds at some point but right now 100% stock.

[merula]

I would personally be inclined to ditch the target retirement fund. I would suspect that the holdings of that fund are pretty similar to what you're holding otherwise (mostly large cap, some small cap, foreign and bonds), so you're likely not actually diversifying as much as you'd think.

The other downsides are that you're essentially trusting the fund managers to assign you a risk appetite based solely on age, and paying for that privilege. I'm near your age and 100% stock, but that's my risk appetite.

[MustacheCash]

Thank you to everyone!  I checked and my index fund already has FOUR of the top ten holdings of the other two large caps.  I never even considered this when I was developing my asset allocation!  The target date fund has exposure to more international and REITs so I may lean toward this until I do a little more research.  Am I wrong still going with the target date?  Any other suggestions to my new asset allocation?

Large
EB DL NonSL Broad Stock Index @ 52%
Company Stock Fund @ 2%

Small
EB DL NonSL Small Cap Stock Index @ 15%

Foreign Large
Artisan International Growth Trust @ 12%

Retirement/Target Date
Schwab Mngd Ret Trust Target Date 2030 @ 5%

Intermediate-Term Bond
PIMCO Total Return Instl @ 14%

[Fuzzy Buttons]

Company Stock Fund @ 2%

This is fine if you want to have an emotional connection to your company, investing a bit of your own money.  There's nothing wrong with that.  Just be aware that allocations this small have no real effect on risk.  Put another way: if your company just blows the roof off, your total rate of return won't go up very much; and if your company really tanks, your total rate of return won't go down very much.  I figure if you don't feel that an asset is worth at least 10% of your allocation, you don't really need it. Simple is better, IMHO.

[TomTX]

Company Stock Fund @ 2%

This is fine if you want to have an emotional connection to your company, investing a bit of your own money.  There's nothing wrong with that.  Just be aware that allocations this small have no real effect on risk.  Put another way: if your company just blows the roof off, your total rate of return won't go up very much; and if your company really tanks, your total rate of return won't go down very much.  I figure if you don't feel that an asset is worth at least 10% of your allocation, you don't really need it. Simple is better, IMHO.

Also, it's not worth the time and hassle of messing around with splitting between different funds until you have at least $50k IMO.

[RichMoose]

I would recommend you simplify your holdings, you have quite a bit of overlap. The costs don't seem that high for most of your options though. Personally I would suggest the following simple allocation:

EB DL Non-SL Broad Stock Index Fund - 75%

PIMCO Total Return Instl - 25%

The EB fund actually tracks the Russell 3000 Index, really not much different from VTSAX. You get everything here, large cap, mid-cap, small cap, etc. so there's no point on doubling up with another small cap unless you want to be overweight in this category. Personally I wouldn't, just keep it simple. I would also skip the foreign option and the target fund for the following reasons. The foreign fund is quite expensive and you get a decent amount of foreign exposure with the Russell 3000 as many of the companies operate internationally. The target fund is really just a blend of about 20 funds that traditionally have lagged the Russell 3000 Index by a pretty good margin.

[Fuzzy Buttons]

Also, it's not worth the time and hassle of messing around with splitting between different funds until you have at least $50k IMO.

Good point.  I opened a Vanguard IRA for the first time this year, and I just stuck the whole $5500 in VASGX.  I plan to just add to that each year.

[MustacheCash]

Also, it's not worth the time and hassle of messing around with splitting between different funds until you have at least $50k IMO.

Is this $50k for a single fund or the 401(k) overall?

EB DL Non-SL Broad Stock Index Fund - 75%

PIMCO Total Return Instl - 25%

Thank you for your reply and I like your idea of simplicity, but I think I would tweak it a little as I mentioned I am 30 so 25% bonds right now may be a little too conservative for me.

[RichMoose]

Good call, I'm 0% bonds myself. I find bonds very overpriced and offer very low return when holding to term, but like you I have a long timeline. Even Buffett suggests 10% bonds in retirement.

Many people are uncomfortable with that though as many advisors recommend 25% at minimum. Safety is expensive :)