Best of Bad 401k options

[PaleHorse]

Wife recently became eligible for 401k at her work. I could use some help with selections. It appears the available funds were picked by someone who is a firm believer in a manager's ability to consistently beat the market without any regard to expenses. Needless to say, I am not at all impressed with the fund options available (not to mention a 1% funds under management fee). The only redeeming quality of the plan is a 3% match and 7% profit sharing.

Fund Ticker ER
Northern Emerging Markets NOEMX 0.61%
Dodge & Cox International Stock DODFX 0.64%
Dodge & Cox Income DODIX 0.43%
Vanguard Total Bond Index Signal VBTSX 0.10%
Legg Mason Brandywine Global
Opportunities Bond Fund Class IS GOBIX 0.64%
Fidelity Spartan 500 Index FUSVX 0.07%
T Rowe Price Blue Chip Growth PABGX 1.00%
T. Rowe Price Equity Income PRFDX 0.68%
Columbia Mid Cap Index NMPAX 0.20%
Ivy Mid Cap Growth Fund Class I IYMIX 1.05%
JP Morgan Mid Cap Value FLMVX 0.74%
Loomis Sayles Bond Institutional LSBDX 0.63%
T. Rowe Price New Horizons PRNHX 0.81%
Wasatch Small Cap Growth WAAEX 1.24%
Goldman Sachs Small Cap Value GSSIX 1.01%
American Funds EuroPacific R-4 REREX 0.85%


We currently max funding: my 401k (held through Vanguard with access to Institutional Class shares), HSA & Roth IRA (x2 @ Vanguard with Admiral Share Funds).

Planned course of action: Invest her 401k (can't do max funding this year, but ratcheting up) solely in Fidelity Spartan 500 Index (FUSVX) and offset with something like Vanguard Mid-Cap Index Fund Admiral Shares (VIMAX) in one of the Roth's. It seems the only other viable fund available in her 401k would be the Vanguard Total Bond Signal, so I suppose I could shift all my bond holdings to this account once the balance becomes large enough. However, I'm currently holding bonds in VBTIX with an ER of .07%, so would have to move to the higher ER class.

Thoughts and recommendations are appreciated. Thanks!

[texasdiver]

I would do same as you.

With the new 401(k) I would put 100% in the Fidelity S&P 500 fund and then use your other accounts to add something like the Vanguard Extended Markets Index to simulate the total market as per the wiki:

http://www.bogleheads.org/wiki/Approxim ... ock_Market

And then use your other accounts to add Total Int'l Stock and bonds in accordance with your desired asset allocation as the 401(k) doesn't have any appealing international stock or bond options.

[jbaron]

You have a good stock fund, a good bond fund, and a 3% match. Sounds quite good to me.

[BL]

You have a good stock fund, a good bond fund, and a 3% match. Sounds quite good to me.

+1
You only need 1 or 2 good funds in your 401k if you have access to good ones elsewhere. Many would be envious of your choices, even with the management fee which I agree is not the greatest.