Author Topic: Target Retirement Date Index Funds or Balanced Model Portfolio?  (Read 1942 times)


  • 5 O'Clock Shadow
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  • Posts: 7
My company offers a %4 matching 401k plan through Fidelity investments. There are tools to help choose the right plan. As for strategy, the automatic robo style software provides a “Target Date Balanced Fund” approach and a “Model Portfolio”

Plan 1: one Fund:
OH0Q SS TRGT RET 2035 M    Exp Ratio: Gross:0.08%  Net:0.07% (street state target retirement non-lending fund class M)
Top 10 holdings:
State St S&P 500® Indx NL Cl A    34.53%
State St Gbl All Cp Eq ex-US Idx NL Cl C    31.45%
State St Russell Sm/Mid Cp® Indx NL Cl A    11.88%
State St US Lg Gov Bnd Indx NL Cl A    9.84%
State St US Bnd Indx NL Cl A    8.83%
State St Bloomberg RSC IdxSM NL Cl A    3.47%

Plan2: Model balanced Portfolio

OJ6Z BLKRK US DEBT INDEX               Intermediate-Term Bond       25.00%
OFG1 SS LG CAP INDEX                       Large Blend               16.00%
OJLE SS INTL INDEX                            Foreign Large Blend         11.00%
OFGW INCOME FUND                           Stable Value            10.00%
OJLM PIMCO CORE PLUS BOND             Intermediate-Term Bond      8.00%
NRSRX Neuberger Berman Socially Rspns R6     Large Growth           6.00%
3717 FID CONTRAFUND POOL               Large Growth                 5.00%
ARAIX Ariel Fund Institutional               Mid-Cap Blend          4.00%
OJLD SS EMRG MKTS INDEX                 Diversified Emerging Mkts      4.00%
OJLN PIMCO REAL RETURN                   Inflation-Protected Bond           4.00%
3716 FID GROWTH CO POOL                Large Growth                3.00%
OJLC SS MID/SMALL INDEX                  Mid-Cap Blend            2.00%
FNMIX Fidelity New Markets Income Fund           Emerging Markets Bond    1.00%
NRHIX Neuberger Berman High Income Bond R6    High Yield Bond 1.00%

Now my question:
The target retirement fund (seems to be an SSGA fund) is made up of other index managed funds which I assume each has its own hidden expense ratio, but shows a Gross 0.08%. Am I missing bunch of hidden expenses other than the posted %0.08? 
The graph seems to be underperforming the S&P 500 which is it is comparing to….

Plan 2 is a combo of stocks and bonds. If I rebalance every year, do you think it will give me better returns? Or the difference is not significant and I better go with the one target retirement and save and forget strategy? 

Any thoughts are much appreciated