Symbol | Investment Name | % of Assets | Rtn Since Inception | Expenses |
SSGXX | SSgA Cash Series U.S. Government Fund - Class L | 0.00% | 0.00% | 0.00% |
PTTAX | PIMCO Total Return Fund - Class A | 0.00% | 6.42% | 0.85% |
ACCAX | American Century Strategic Allocation: Conservative Fund - Class A | 0.00% | 6.01% | 1.25% |
ACOAX | American Century Strategic Allocation: Moderate Fund - Class A | 0.00% | 7.01% | 1.32% |
ACVAX | American Century Strategic Allocation: Aggressive Fund - Class A | 17.64% | 7.44% | 1.45% |
JABRX | Janus Balanced Fund - Class S | 18.79% | 12.06% | 1.08% |
SVSPX | SSgA S&P 500 Index Securities Lending Series Fund - Class IX | 0.00% | 7.39% | 0.71% |
JARTX | Janus Forty Fund - Class S | 18.89% | 10.52% | 0.96% |
ARGFX | Ariel Fund | 3.45% | 11.69% | 1.03% |
ALMRX | Alger Mid Cap Growth Institutional Fund - Class I | 18.18% | 12.40% | 1.29% |
PASSX | T. Rowe Price Small-Cap Stock Fund - Advisor Class | 3.13% | 9.65% | 1.15% |
ALTFX | AllianceBernstein Global Thematic Growth Fund - Class A | 2.00% | 11.61% | 1.50% |
OPPAX | Oppenheimer Global Fund - Class A | 17.94 | 11.69% | 1.14% |
I was thinking along the same lines - I've already paid the load, I might as well just leave the money in those specific funds and retarget new money to a new allocation. The only variable I wasn't sure on was the fee savings...based on some of the allocations and a roughly 0.7 point spread between SSgA and the higher ER funds, it might be around $500/year difference.I was only advocating leaving money in the international fund. You need to compare the performance of the funds in similar categories before you decide if you will leave the money in the fund. It's not just the ER that you should look at, you can lose a lot more money by owning a sub-par fund. For example, ACVAX and JARTX are both classified as Large-Cap funds, but they both have under-performed compared to SVSPX (and it appears that you have access to a different class of the fund than SVSPX, but I'm not sure I understand what it going on there). So I wouldn't invest in funds just because you're money is there. I only suggested you leave money in that fund so you still had international exposure.
I've also got a cash position that I'm moving to Vanguard next week into a "Core Four"-esque portfolio, which feels like a good mix for me.If you have money outside of your 401k that you are investing, I would suggest you determine the asset allocation you want across all of your investments and then focus your money in the 401k on your best choices. That probably means you should invest primarily in SVSPX in your 401k and invest in International and Small Cap funds in your Vanguard fund. It's a little more complex, but would be a better option.
Well first for the good news. You are right, SVSPX is a great choice. And the even better news is that it's expense ratio is 0.17%: which is even better than you listed. That's where the bulk of your money should go.
The bad news - I looked at the fees for all your funds, especially the front-end loads. PPTAX, ACCAX, ACOAX, ACVAX, ALTFX, and OPPAX all have front end loads of 3-6%. That means that for every $100 you invest, they take $3-6 right off the top and invest the remainder. I would avoid investing in those, that's just highway robbery.
Now there's a lot of questions you have to ask about what you want to invest, the basic being what you want your asset allocation to be. But assuming you're a long ways from retirement and want to go 100% stocks, here's how I would allocate it:
SVSPX: 55% Large Cap
ARGFX: 15% Mid Cap
PASSX: 15% Small Cap
OPPAX: 15% Int'l <---Only existing investment, don't add to it
You are missing a good international fund to invest in, since both of the Int'l funds carry large front-end fees. But since you have already paid those fees for the money you currently have invested in them, I'd leave it invested there. As you add new money to your 401k, I would invest it 60%/20%/20% in the three funds I listed and let your international exposure slowly dwindle. It's not worth losing 5% off of the top to get more international exposure.
There's arguments to be made to tweak those allocations a lot of different ways. If anything, others would probably suggest you invest more in the S&P 500 fund. I wouldn't argue with anyone that wanted to go up to 70% or so of their money in SVSPX. I'm sure there's some people on here who would go close to 100% in it, but I would suggest having more diversity and getting some exposure to small and medium size companies. Lastly, you are currently invested in JABRX, which invests 40% in bonds. If you wanted to have bond exposure, you could do it there or in the money you have invested in PPTAX, which is 100% bonds.
Maybe Im missing a piece of the puzzle but why would you suggest those funds? Except for the S&P index, they're all super high Expense Ratios.
I was going to ask the OP how much he made and if he could ditch the tax advantages of this crap 401K. I wouldn't touch a thing in that expect maybe the S&P or perhaps PIMCO. All those fees are embarrassing. Jeez Louise!
I wouldn't touch a thing in that expect maybe the S&P or perhaps PIMCO. All those fees are embarrassing. Jeez Louise!
Symbol | Investment Fund | % of Assets | 1 Yr Rtn | 3 Yr Rtn | 5 Yr Rtn | 10 Yr Rtn | Since Inception | F/E Load | Expenses |
SSGXX | SSgA Cash Series U.S. Government Fund - Class L | 0.00% | 0.00% | NA | NA | NA | 0.00% | 0.00% | 0.75% |
PTTAX | PIMCO Total Return Fund - Class A | 0.00% | -1.63% | 3.74% | 6.43% | 5.43% | 6.42% | 3.75% | 0.85% |
ACCAX | American Century Strategic Allocation: Conservative Fund - Class A | 0.00% | 7.62% | 6.94% | 10.42% | 5.30% | 6.01% | 5.75% | 1.25% |
ACOAX | American Century Strategic Allocation: Moderate Fund - Class A | 0.00% | 11.38% | 8.45% | 13.65% | 6.39% | 7.01% | 5.75% | 1.32% |
ACVAX | American Century Strategic Allocation: Aggressive Fund - Class A | 17.64% | 14.30% | 9.25% | 15.97% | 6.95% | 7.44% | 5.75% | 1.45% |
JABRX | Janus Balanced Fund - Class S | 18.79% | 13.38% | 9.74% | NA | NA | 12.06% | 0.00% | 1.08% |
SVSPX | SSgA S&P 500 Index Securities Lending Series Fund - Class IX | 0.00% | 21.01% | 13.87% | 20.37% | 6.73% | 7.39% | 0.00% | 0.71% |
JARTX | Janus Forty Fund - Class S | 18.89% | 22.01% | 13.29% | 17.61% | 9.09% | 10.52% | 0.00% | 0.96% |
ARGFX | Ariel Fund | 3.45% | 23.74% | 12.02% | 30.25% | 7.37% | 11.69% | 0.00% | 1.03% |
ALMRX | Alger Mid Cap Growth Institutional Fund - Class I | 18.18% | 24.56% | 10.73% | 21.77% | 6.83% | 12.40% | 0.00% | 1.29% |
PASSX | T. Rowe Price Small-Cap Stock Fund - Advisor Class | 3.13% | 24.52% | 14.63% | 27.11% | 10.43% | 9.65% | 0.00% | 1.15% |
ALTFX | AllianceBernstein Global Thematic Growth Fund - Class A | 2.00% | 21.48% | 1.47% | 14.82% | 4.51% | 11.61% | 4.25% | 1.50% |
OPPAX | Oppenheimer Global Fund - Class A | 17.94 | 19.17% | 10.00% | 19.97% | 7.97% | 11.69% | 5.75% | 1.14% |
Either way, I think I need to cease and desist on funds charging betweeb 4.25% - 5.75% front-end load and 1.1% - 1.5% in annual fees and reallocate new purchases towards the SSgA Index. Looking at the 10 year return, the F/E load alone eats almost the entire return!
Maybe Im missing a piece of the puzzle but why would you suggest those funds? Except for the S&P index, they're all super high Expense Ratios.
I was going to ask the OP how much he made and if he could ditch the tax advantages of this crap 401K. I wouldn't touch a thing in that expect maybe the S&P or perhaps PIMCO. All those fees are embarrassing. Jeez Louise!
I suggested those funds based upon what they invest in and their past performance. Even though they have high expense ratios, it's important to be well diversified with your investments. So I picked the best choice for a fund that invests in large companies, mid, small, and international. I tried to avoid the funds that had front-end loads, but all the expense ratios are similar for the remainder of the funds so you just have to choose the best available. And we all agree the S&P is the best choice and your Large Company exposure should be the highest, so it should naturally be heavily over-weighted.
As for not contributing to his 401k, that's really probably penny-wise, pound-foolish. The OP is saving 25%+ on that money in taxes, so even if he has to pay high fees he's still saving money. And he only has to leave the money in the 401k as long as he's at that job. When he leaves the company, he can roll it over to a Traditional IRA and invest it in whatever he wants.
Yeah, you multiple your same situation by 100s of millions of Americans and you see why there's so much money in Wall St. One thing to consider though is that all returns have the ER figured into them, so you can use the historical returns to gauge whether they are 'making up' for their high ERs. But you're right, the FE load eat up a ton of returns.
I used the F/E load from Morningstar which I'm assuming is correct, although like the SVSPX different class of shares, perhaps it's different. Either way, I think I need to cease and desist on funds charging betweeb 4.25% - 5.75% front-end load and 1.1% - 1.5% in annual fees and reallocate new purchases towards the SSgA Index. Looking at the 10 year return, the F/E load alone eats almost the entire return!
Hi ZiziPB - great thought. I checked the plan prospectuses available through the ADP website, and it appears we're getting the full sting for F/E loads. Outside of the pre-tax advantage, this plan doesn't appear to be geared towards Mustachians. :( The F/E loads and expenses all line up with what's showing via the plan documents today.
At the very least, I will be allocating new money for TY15 heavily (if not almost 100%) into SVSPX to respin the balance and probably leaving existing money where it is since the load was already paid. The only one I'm thinking I would flat-out move is American Century ACVAX - the E/R is high, the F/E load is silly, and the 10 year and inception returns are within a tiny margin of SVSPX Class IX with 0% F/E and 0.71% E/R.
After reading the Bogleheads book, they seem to recommend keeping bonds in pre-tax retirement accounts, but given the craptastic nature of offerings in mine, I may have to go taxable there.
Thanks again all for the feedback!
@Scandium - Great tip! All the plan documents and info on the site didn't confirm either way on front end loads, so I called ADP directly. After bouncing through a couple of different reps, I finally got to a licensed rep that stated our plan waives front-end load fees. Net-net, the expense ratios are still high, but they are the only expenses associated with the plan...no monster front end loads.
I also checked with the rep and the SSgA Index fund I have access to is not SVSPX (although it's pretty close). Comparing the 1, 3, 5, and 10 year returns to SVSPX on Morningstar shows slight differences (about 1 point less on my plan fund), and the difference of the ER. Apparently it is not a publically traded fund so I'm not how I can easily track it in Mint or Personal Capital, but we'll see. I will probably move $1,000 to the SSgA Index as a test to see what happens before moving the whole smash out of American Century. The more I look at the fund (even without the F/E load), the less impressed I am.
Thanks again!