New Investor - Need some advice on 401k

[skerce]

I just got back from traveling around the world for the past year. Don't have much in terms of money to my name but recently I stumbled upon this forum and am looking to start investing wisely so that I can hopefully retire in 10 years.

I started working with an organization that offers a 401k through which I have the option of getting the Vanguard Institutional Index Plus Shares (VIIIT) or the T. Rowe Price Large Cap Growth (TRLGX). I'm biased towards Vanguard because MMM and Jim Colins seem to be pretty into it. However, the T. Rowe Price has shown a 9.22 increase since fund inception (does have a 0.7% ER) whereas the VIIIT has a 5.59 increase with a 0.16% ER. I'm planning on putting the maximum amount into my 401k and was going to put 100% into either of those large cap equity funds. It will take 3 years to be fully vested by the company so I anticipate I will be with them for at least that long and then might transfer the funds to a traditional IRA through Vanguard (VTSAX).

I wasn't planning on mixing into bonds or international because I am only 26 so I figured I have sometime to ride out any volatility. Let me know what you guys think. Thanks.

[extremedefense]

Vanguard Institutional Index Plus Shares (VIIIT) ...the VIIIT has a 5.59 increase with a 0.16% ER.

I have the choice to get Vanguard Institutional Index Plus Shares (VIIIX) and it has an expense ratio of 0.02% and just a quick Google search shows TRLGX has an expense ratio of 0.56%.

How can both of your numbers for VIIIX and TRLGX be that wrong?

[MDM]

Vanguard Institutional Index Plus Shares (VIIIT) ...the VIIIT has a 5.59 increase with a 0.16% ER.

I have the choice to get Vanguard Institutional Index Plus Shares (VIIIX) and it has an expense ratio of 0.02% and just a quick Google search shows TRLGX has an expense ratio of 0.56%.

How can both of your numbers for VIIIX and TRLGX be that wrong?

Different 401k plans can and do have different expense ratios, even for the same fund.  It's not a question of right or wrong.

[extremedefense]

Vanguard Institutional Index Plus Shares (VIIIT) ...the VIIIT has a 5.59 increase with a 0.16% ER.

I have the choice to get Vanguard Institutional Index Plus Shares (VIIIX) and it has an expense ratio of 0.02% and just a quick Google search shows TRLGX has an expense ratio of 0.56%.

How can both of your numbers for VIIIX and TRLGX be that wrong?

Different 401k plans can and do have different expense ratios, even for the same fund.  It's not a question of right or wrong.

Then why is it VIIIX and you can Google it / see it on vanguards site, but nothing exists for VIIIT?

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[MDM]

Then why is it VIIIX and you can Google it / see it on vanguards site, but nothing exists for VIIIT?

Could be a typo.

Could be that different 401k plans have different expense ratios, even for the same fund.

[extremedefense]

Then why is it VIIIX and you can Google it / see it on vanguards site, but nothing exists for VIIIT?

Could be a typo.

Could be that different 401k plans have different expense ratios, even for the same fund.

I'd love some anecdotal evidence of an employers 401k program offering a mutual fund with a higher than advertised ER. The only thing I can think of is when they charge a management fee, or any other "additional fee" like a maintenance fee, but never adding to the expense ratio because the ER goes to the company that manages the fund, not the employer. Why wouldn't they just match less if they want lower costs?

Just my $0.02

[MDM]

I'd love some anecdotal evidence of an employers 401k program offering a mutual fund with a higher than advertised ER.

In that case, google   high fee 401k   or similar and read to your heart's content....

[skerce]

Yeah it was a typo, it should have been VIIIX. I guess they management company is just adding on an additional expense to the existing ratio. Any recommendations towards one or the other?

[MDM]

Any recommendations towards one or the other?

You pays your money and you takes your chances.

Some years Large Cap Growth does better, some years Small Cap Value does better, etc.

See Callan periodic table of investment returns - Bogleheads.

[NoStacheOhio]

Yeah it was a typo, it should have been VIIIX. I guess they management company is just adding on an additional expense to the existing ratio. Any recommendations towards one or the other?

Ignore performance numbers and buy based on asset class and expenses. If you've read Jim Collins, you know this already, and you're just overthinking.