So we are getting a new 401k provider. We get access to an institutional Vanguard fund now (VINIX), which is cool, but the bond options are garbage.
Of course all my bonds are in my 401k. What do?
Currently I have VBTLX (expense ratio of .05%) in my 401k, with new contributions set to buy majority bonds in order to balance out my AA for my total portfolio. New 401k will automatically roll over existing investments into "matching" funds. The matching one for VBTLX is PICYX with an expense ratio of .85%!!! There are two other funds available that hold bonds JDFNX (.45%) and DSDYX (.46%).
My reading shows that bonds should be held in tax advantaged accounts, hence all mine are in the 401k. Should I continue this strategy even though the new fund options are expensive? Or should I move all my bond holdings to my Roth? Right now my Roth is an REIT index and an S&P500 index. Should I sell the 500 index that is in there and buy bonds, and sell the bonds in the 401k to be all equities?
Minor plot twist, it also sounds like I will now have access to the mega backdoor Roth, which would enable me to buy even more bonds in there to balance out the AA more.
I haven't really sold much within the tax advantaged accounts themselves yet. Since I'm still in 'stache building mode, I just do my rebalancing by adding more into the under represented asset classes.
Is that the best approach? Or should I for some reason move my bonds to my taxable accounts?