401k Questions (Fees, Funds without Ticker Symbols)?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.

401k Questions (Fees, Funds without Ticker Symbols)?

Postby jendoe » Sun Jul 14, 2013 5:09 pm

Hi Bogleheads,

I've just started (over the last few months) working to understand retirement investing, to clean up my accounts, and to create an asset allocation for myself. While doing this, I'm spending alot of time researching the various options in my current 401k.

I'm still VERY much a novice, and am finding a couple of things confusing. I'm hoping someone here can help me make sense of two things in particular...

Note: The 401k is with Fidelity.

1. Funds without Ticker Symbols

My 401k has several funds available that do NOT have ticker symbols. Some (but not all) include the name of the company that I work for in their name. (Note the company that I work for is NOT in Financial Services/Banking/Investing at all.) Some have this notice, "This investment option is not a SEC-registered 40 Act fund."

The funds that I'm looking at ARE index funds, so I can see what index they are tracking, but it's difficult to get more detailed information about the fund itself.

What are these? Is there a good way to understand what they're composed of? I'd really like to be able to put my accounts into the Morningstar X-Ray tracker, but I'm not sure if that's possible without a ticker to reference.

If I find another mutual fund or ETF that tracks the same index, is it reasonable to use THAT in Morningstar, to get an idea of what's in my fund?

As an example, we have an International Index that has a goal of matching "MSCI ACWI ex U.S. Index". I would like to know what percentage of this fund (which I'm invested in) is in Emerging Markets. The index itself DOES seem to have exposure to Emerging Markets (though I'm not clear on the percentage).

I've found an ETF (iShares MSCI ACWI ex US Index Fund - ACWX) that ALSO tracks this index. Can I use ACWX as a stand-in in X-ray for my actual, untickered fund? I believe ACWX, when I looked at it, was ~16% emerging markets... is it safe to assume that my fund has a similar percentage?


2. Record-keeping fees

Not too long ago, I began investing a small amount in a fund called, "[company] Total Return Bond Fund" (ER 0.46%). Note "[company]" is the name of the company that *I* work for (not a financial company).

While I began researching my portfolio, I found that I had a quarterly "record-keeping" fee of $8 that was associated with this fund (!).

I went back and read everything I could find about the fund, and could not find any reference to this fee, at all. There were no loads associated with the fund, no penalties, etc. The only way that I knew about it was by looking at my transaction history, and seeing a deduction every quarter for $8, listed with the name of this fund.

Between the small amount that I had invested, the $32/y fee, and the 0.46% ER - I decided this was too expensive, and sold the fund completely, and put the money into my other assets while I continue trying to figure out the asset allocation that I should set up.

Well, I looked at my account today... and there's STILL an $8 fee (for the quarter starting in July!). It's just associated with a DIFFERENT fund now, one that has NEVER shown a fee in the past!

Is this normal? What IS it? Shouldn't there be a disclosure somewhere? I'd like to know, for example, if the fee is the same for everyone, or if it changes as your balance goes up. Or, if it's a charge for paper statments (again, I haven't seen that disclosed - and I DO get paper statements, because as far as I can tell, Fidelity doesn't auto-generate regular PDF statements and save them for later access. If I don't get paper statements, and I don't think to "create" a statement, then I have no records of the account... and that makes me nervous as it gets bigger).

And, can they really just pick whichever investment they want to pull that fee from? (Previously, they were taking it from a fund that had a fairly small balance. Now they're taking it from a fund that has the largest balance. I'm not sure how they decide where to pull it from.)

Thanks for any information you can share! I'm really enjoying reading the discussions here, and am learning a TON.

Thanks :D,
-jendoe
jendoe
 
Posts: 23
Joined: 16 Jun 2012

Re: 401k Questions (Fees, Funds without Ticker Symbols)?

Postby LadyGeek » Sun Jul 14, 2013 5:28 pm

This thread is now in the Personal Finance (Not Investing) forum (401(k)).

To start:

Funds without ticker symbols mean that it's not publicly traded. As a result, you may not be able to get the same level of details as a publicly traded fund. The benchmark it tracks (as it's the only thing you can go by) is a good indicator, however.

Remember that you really only need to get your selections to the nearest 5 %. Going more precise is a lot more work and the difference in returns isn't worth it.
To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
User avatar
LadyGeek
Site Admin
 
Posts: 17682
Joined: 20 Dec 2008
Location: Philadelphia

Re: 401k Questions (Fees, Funds without Ticker Symbols)?

Postby jmndu99 » Sun Jul 14, 2013 5:47 pm

good Afternoon, as a fellow novice, welcome

jendoe wrote:1. Funds without Ticker Symbols

My 401k has several funds available that do NOT have ticker symbols. Some (but not all) include the name of the company that I work for in their name. (Note the company that I work for is NOT in Financial Services/Banking/Investing at all.) Some have this notice, "This investment option is not a SEC-registered 40 Act fund."

The funds that I'm looking at ARE index funds, so I can see what index they are tracking, but it's difficult to get more detailed information about the fund itself.

What are these? Is there a good way to understand what they're composed of? I'd really like to be able to put my accounts into the Morningstar X-Ray tracker, but I'm not sure if that's possible without a ticker to reference.

If I find another mutual fund or ETF that tracks the same index, is it reasonable to use THAT in Morningstar, to get an idea of what's in my fund?

As an example, we have an International Index that has a goal of matching "MSCI ACWI ex U.S. Index". I would like to know what percentage of this fund (which I'm invested in) is in Emerging Markets. The index itself DOES seem to have exposure to Emerging Markets (though I'm not clear on the percentage).

I've found an ETF (iShares MSCI ACWI ex US Index Fund - ACWX) that ALSO tracks this index. Can I use ACWX as a stand-in in X-ray for my actual, untickered fund? I believe ACWX, when I looked at it, was ~16% emerging markets... is it safe to assume that my fund has a similar percentage?



Your 401(k) sounds like mine. I have no tickers either. These are Unit Investment Trusts. For all intents, they are "vanilla" Index Funds. Yours probably are not managed by Fidelity (just like mine, Fidelity just holds them) but you are investing in index funds. I had the same exact questions long ago. To get an idea of what your fund invests in, you should see an underlined (Company) Total Return Bond Fund. Click on the link and it should open a page that tells you what it is invested in. Do that for all your funds and you will find out. good luck

jendoe wrote:2. Record-keeping fees

Not too long ago, I began investing a small amount in a fund called, "[company] Total Return Bond Fund" (ER 0.46%). Note "[company]" is the name of the company that *I* work for (not a financial company).

While I began researching my portfolio, I found that I had a quarterly "record-keeping" fee of $8 that was associated with this fund (!).

I went back and read everything I could find about the fund, and could not find any reference to this fee, at all. There were no loads associated with the fund, no penalties, etc. The only way that I knew about it was by looking at my transaction history, and seeing a deduction every quarter for $8, listed with the name of this fund.

Between the small amount that I had invested, the $32/y fee, and the 0.46% ER - I decided this was too expensive, and sold the fund completely, and put the money into my other assets while I continue trying to figure out the asset allocation that I should set up.

Well, I looked at my account today... and there's STILL an $8 fee (for the quarter starting in July!). It's just associated with a DIFFERENT fund now, one that has NEVER shown a fee in the past!

Is this normal? What IS it? Shouldn't there be a disclosure somewhere? I'd like to know, for example, if the fee is the same for everyone, or if it changes as your balance goes up. Or, if it's a charge for paper statments (again, I haven't seen that disclosed - and I DO get paper statements, because as far as I can tell, Fidelity doesn't auto-generate regular PDF statements and save them for later access. If I don't get paper statements, and I don't think to "create" a statement, then I have no records of the account... and that makes me nervous as it gets bigger).

And, can they really just pick whichever investment they want to pull that fee from? (Previously, they were taking it from a fund that had a fairly small balance. Now they're taking it from a fund that has the largest balance. I'm not sure how they decide where to pull it from.)

Thanks for any information you can share! I'm really enjoying reading the discussions here, and am learning a TON.


My 401(k) also hits me with an $8.00 fee. This is something we cant control. The $8.00 is for admin, recordkeeping fees, and whatever else they can come up with.
You say they stated pulling the fee from a different fund. Fidelity has done that from me too. They will get their $8.00 from whatever asset. In my case they used to pull it from my Stable Value Fund. Now they pull it from my international fund. The reason they started pulling it from International was due to the fact thatb] I [/b] completely liquidated the stable value fund. Did you completely liquidate the fund that Fidelity was pulling their fee from?, making Fidelity have to pull it from something else?

For my international index fund I use FSGDX (tracks the same index goal, MSCI ACWI ex US)

Regards,
J
User avatar
jmndu99
 
Posts: 101
Joined: 14 Jul 2013

Re: 401k Questions (Fees, Funds without Ticker Symbols)?

Postby ruralavalon » Sun Jul 14, 2013 7:08 pm

These are probably "separate Accounts" . Forum Discussion, What exactly is a "Seperate Account" .

Just Google the index name stated for each account, you should be able to find what is covered in the index and what the allocation is.

For example, "MSCI ACWI ex US" gets you to this on Investopedia, which says:

"Definition of 'Morgan Stanley Capital International All Country World Index Ex-U.S. - MSCI ACWI Ex-U.S.'

A market-capitalization-weighted index maintained by Morgan Stanley Capital International (MSCI) and designed to provide a broad measure of stock performance throughout the world, with the exception of U.S.-based companies. The MSCI All Country World Index Ex-U.S. includes both developed and emerging markets. "
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started
User avatar
ruralavalon
 
Posts: 4643
Joined: 2 Feb 2008
Location: Illinois

Re: 401k Questions (Fees, Funds without Ticker Symbols)?

Postby jendoe » Sun Jul 14, 2013 10:29 pm

Thanks, everyone!

LadyGeek - thanks for getting this to the correct section (sorry about that)! And, thanks for the reassurances that looking at the index is "good enough".

I assume that means that I *can* indeed use another (publically traded) fund/ETF that tracks the same index to get a better idea of the composition? (When I find a page described the index, I'm often still stumped as to questions like, "what percentage of this is in Emerging Markets?" Or REITS. Or Small Value. That's what I'm hoping the Xray tool can help with!)

And, thanks for the reminder about "the nearest 5%". :mrgreen: Good to remember!

jmndu99 Hi J! Good to hear from a fellow novice :) and it does sound like you might be in the same 401k plan that I am! I think you're right that my funds aren't managed by Fidelity. And, thanks for the tip - I have been clicking on the fund names and reading the details...

Ah... maybe the problem is (and forgive me, this might sound rather ignorant) - I'm not 100% sure which countries listed are considered "emerging markets". Some are labeled ("Asia - Developed" versus "Asia - Emerging")... and some I can guess are clearly NOT (i.e. Canada!) but... wouldn't someplace like Latin America be a possible mix of Emerging and Developed?

re: The $8 fee - yup, you are right. I DID just liquidate the other fund. But, part of my reasoning was that the $8 quarterly fee was too high, especially on top of the expense ratio for that fund. If they had made it clear that the fee had nothing to do with the fund, I may not have liquidated it :oops: I guess now I know!

Thanks for the tip re: FSGDX !

ruralavalon - Thanks for the link re: "separate accounts", I'll go take a look at it! And, yup, I've been googling the indices to learn all I can... it's just... sometimes those pages (like the investopedia page) don't really dive down far enough into the details!

Thanks everyone!
-jendoe
jendoe
 
Posts: 23
Joined: 16 Jun 2012

Re: 401k Questions (Fees, Funds without Ticker Symbols)?

Postby LadyGeek » Sun Jul 14, 2013 11:28 pm

OK, I think I see where you're headed. You want to dissect your fund choices to align with something that represents the total market approach. Let's back up a step.

The first thing to do is select your asset allocation, which comes before selecting your fund choices. Asset allocation is one of the most important decisions that investors can make. In other words, the importance of an investor's selection of individual securities is insignificant compared to the way the investor allocates their assets to stocks, bonds, and cash equivalents. (From the wiki Bogleheads® investing start-up kit).

Once you have that figured out, then work on your funds. OK, we're down to choosing your 401(k) funds, which is where you hit the brakes and asked for help. First, the wiki has the list of countries which belong to the emerging markets: Emerging market stocks

How many different indexes are there? Quite a few: Stock Market Indexing Can you align a publicly traded fund to the same benchmark? Probably, it should be "good enough."

401(k) plans usually give you enough ammo to create a what you want, or at least get reasonably close. I wouldn't spend all my time with Morningstar's Instant X-Ray. You're looking for a total bond, total stock market, international stock market funds. Preferably index funds.

If there are too many to choose from, there's absolutely nothing wrong with a target date retirement fund. (I assume these are offered) Since this is a 401(k), you can start with one of these (pick by asset allocation, not by retirement date) and transfer to your desired mix later without incurring any tax penalties. It's more important to get your contributions started now, than to worry about a small expense ratio savings and delay until later. Besides, target date funds are just fine. They're simple and can be put on auto-pilot. (This is what I did when I first joined the forum. It took me a year to get up the confidence to go from a target date fund to separate funds.)

Sometimes, the fund names themselves can help figure out what they're made of. If you want more help, just post your portfolio choices here. If you have any more questions, just ask.

OK, I mistook your question as a general 401(k) question. While you are asking about 401(k) fees, you really are asking about help with your portfolio. You had it right in the first place, so I moved it back to the Investing - Help with Personal Investments where it will stay. (Sorry about that. :oops: )
To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
User avatar
LadyGeek
Site Admin
 
Posts: 17682
Joined: 20 Dec 2008
Location: Philadelphia

Re: 401k Questions (Fees, Funds without Ticker Symbols)?

Postby jendoe » Mon Jul 15, 2013 2:14 pm

Oh wow - thanks LadyGeek, it looks like those pages are going to be hugely helpful! Thank you!

:) And to clarify, I *am* already in my 401k. And, it's doing pretty well (although it's ALLin stock funds, divided between an S&P 500, an S&P 500 completion, and international). I set it up based on the funds in an old 401k that a friend had helped me set up, so I really didn't have a good idea of what was in it or why. I'm trying to get my head around this now so that I can actually have a conscious, hopefully intelligent plan ;) !

Sorry for the confusion! I'm planning to put together a more formal "feedback" thread when I get things a little more sorted out... but in the meantime, not knowing how to reference those ticker-less accounts was keeping me from moving forward with any type of a plan!

Thanks again!
-jendoe
jendoe
 
Posts: 23
Joined: 16 Jun 2012

Re: 401k Questions (Fees, Funds without Ticker Symbols)?

Postby LadyGeek » Mon Jul 15, 2013 4:48 pm

Sounds good, follow this process: Financial planning

Why did I refer you to financial planning when you're asking about your investments? Hint: The answer is highlighted in the "Implement the plan" section.

Assuming everything else is in order (do you have an emergency fund, pay off credit cards, etc.? Take your time...), you are now at step 3. "Select your asset allocation / level of risk". You need to consider all of your investments, not just your 401k. I think you'll want to add some bonds.

BTW, if you don't know what a completion fund is, read this: Extended Market Index Fund)
To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
User avatar
LadyGeek
Site Admin
 
Posts: 17682
Joined: 20 Dec 2008
Location: Philadelphia

Re: 401k Questions (Fees, Funds without Ticker Symbols)?

Postby jendoe » Tue Jul 16, 2013 7:39 pm

Hi LadyGeek,

Thanks for the Financial Planning link! It seems to lay everything out quite nicely...

LadyGeek wrote:...Assuming everything else is in order (do you have an emergency fund, pay off credit cards, etc.? Take your time...), you are now at step 3. "Select your asset allocation / level of risk". You need to consider all of your investments, not just your 401k. I think you'll want to add some bonds.


Yup! I do have an emergency fund, pay off my credit cards every month, and my only debt is my my mortgage (which, assuming no hiccups, I'm on track to pay off in the next 5 years via extra payments each month.) So, all that is in good shape... although I don't have a bigger plan (and long setting goals haven't hasn't been a real strength of mine), so I'll need to look at that and work through the recommendations.

And, I agree with you that I'm going to need some bonds. I've had a rough time with this, but am thinking that going 20% bonds may work for me (that's what the Vanguard questionnaire recommended, and I see that they actually have a smaller amount in the target retirement fund for my age - I'm 39.) It's a little hard with all the talk about how terrible bonds will perform as interest rates rise, and combined with 20+ years still until retirement (which *feels* like plenty of time to recover if stocks crash again)...

But, as I continue reading here, I can see that it's probably a smart move to keep some bonds in the mix, if for nothing else, to help rebalance.

:) Thank you again!
-jendoe
jendoe
 
Posts: 23
Joined: 16 Jun 2012


Return to Investing - Help with Personal Investments

Who is online

Users browsing this forum: Google [Bot], Hawkeye5, Jazz56, johnny847, ruralavalon, Yahoo [Bot] and 58 guests