New employer with meager selection of funds in 401K. Help.

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New employer with meager selection of funds in 401K. Help.

Postby mmakerbh » Wed Feb 06, 2013 4:53 pm

Hello, long time reader on the forum, and based on various readings all my 401K investments are in Vanguard index funds.
Recently changed my employer from a large fortune 50 company to a relative start up which offers 401k (employee contribution only)
via American Funds. Never heard of this company and following are their offerings. Please let me know what options are good for me.

Thanks in advance

Age : 38 yrs
Target Allocation: 35% - US stocks, 45% - Intl stocks, 20% - bonds.


Growth investments
------------------

EuroPacific Growth Fund® ER 0.85
Invesco Developing Markets A® ER 1.53
Invesco Mid Cap Core Equity ER 1.21
Invesco Small Cap Equity ER 1.38
SMALLCAP World Fund® ER 1.07
The Growth Fund of America ER 0.68

Growth-and-income investments
-----------------------------

Fundamental Investors ER 0.66
Putnam Equity Income A ER 1.17

Equity-income investments
-------------------------

Capital Income Builder ER 0.66

Bond investments
----------------

American High-Income Trust ER 0.72
PIMCO Total Return A ER 0.85
mmakerbh
 
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Re: New employer with meager selection of funds in 401K. Hel

Postby Mill » Wed Feb 06, 2013 6:29 pm

what other assets do you own? It would help to know your entire current portfolio.
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Location: Arkansas

Re: New employer with meager selection of funds in 401K. Hel

Postby hoppy08520 » Wed Feb 06, 2013 6:57 pm

mmakerbh wrote:Target Allocation: 35% - US stocks, 45% - Intl stocks, 20% - bonds.

Given your target AA, you might as well go 100% in this:

Capital Income Builder (CAIBX) ER 0.66

This is an interesting balanced fund that is pretty close to your AA. It has more international stocks than US stocks, and is around 20% bonds and 5% cash according to Morningstar. Tilts to large cap value. This probably wouldn't be the first choice for many Bogleheads but the American Funds lineup doesn't seem to have many vanilla offerings.

Other options might be:

The Growth Fund of America ER 0.68 - large growth, US (mostly) and Intl. A huge fund often said to be a "closet index fund" because it has such huge assets
PIMCO Total Return A ER 0.85 - a bond fund that you see in MANY 401(k) plans
Fundamental Investors (ANCFX) ER 0.66 - large blend US & Intl stock fund

Other:
American High-Income Trust (AHITX) ER 0.72 - high-yield corporate bonds; don't over-use

I wouldn't touch the others because of high ER.
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Re: New employer with meager selection of funds in 401K. Hel

Postby Jeff7 » Wed Feb 06, 2013 8:09 pm

Just curious - about how many people are at this start-up company?
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Re: New employer with meager selection of funds in 401K. Hel

Postby mmakerbh » Thu Feb 07, 2013 7:53 pm

Thanks for the advice. My current investment portfolio is

401K accounts (Currently with Fidelity)
-------------
VANG INST INDEX PLUS 72%
FID GROWTH CO K 15%
PERKINS MID CAP VAL 13%

Taxable accounts (With Vanguard)
----------------
VEXAX Vanguard Extended Market Index Fund Admiral Shares ER0.14%
VFWAX Vanguard FTSE All-World ex-US Index Fund Admiral ER 0.18%
VIPSX Vanguard Inflation-Protected Securities Fund Investor Shares ER0.20%
VGSLX Vanguard REIT Index Fund Admiral Shares ER0.10%
VTIAX Vanguard Total International Stock Index Fund Admiral Shares ER0.18%
VTSAX Vanguard Total Stock Market Index Fund Admiral Shares ER0.06%
VTWSX Vanguard Total World Stock Index Fund Investor Shares ER0.40%

Also, to answer Jeff7 question, I went from >80,000 employees company to a company with 1800 employees (not a true startup, but relatively young).
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Re: New employer with meager selection of funds in 401K. Hel

Postby Jeff7 » Sat Feb 09, 2013 1:22 am

^ Ok, thanks.
There are about 50 people where I work, and we've also got American Funds.
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