Fund choice question [TIAA/CREF or Fidelity?]

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Fund choice question [TIAA/CREF or Fidelity?]

Postby lws6772 » Fri Jul 26, 2013 3:17 pm

If your employer only offers TIAA/CREF or Fidelity funds(or a combination of the two), what do you think is the best choice? Thanks very much for any help.
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Re: Fund choice question

Postby StarbuxInvestor » Fri Jul 26, 2013 3:21 pm

To me Fidelity has a great set of low cost funds plus an interesting fund FFNOX. So I would pick Fidelity but I am not a TIAA/CREF fan.
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Re: Fund choice question [TIAA/CREF or Fidelity?]

Postby LadyGeek » Fri Jul 26, 2013 9:45 pm

I think the answer needs a little more detail, like which Fidelity funds you are considering. The wiki has some background: TIAA-CREF

I retitled the thread to draw the attention of the members which can help you better. I'm not familiar with TIAA-CREF.
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Re: Fund choice question [TIAA/CREF or Fidelity?]

Postby Kevin M » Fri Jul 26, 2013 9:48 pm

Fidelity, assuming you have access to their Total US Stock fund, and either the Global ex-US or Total International fund (all Spartan, not exact names but you'll recognize them). One of my daughters has both, and we went with Fidelity; they have lower cost funds that cover the total markets.

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Re: Fund choice question [TIAA/CREF or Fidelity?]

Postby dbltrbl » Fri Jul 26, 2013 9:52 pm

Fidelity hands down assuming you get spartan funds as a choice. Great service and low expense ratios compared to TIAA.
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Re: Fund choice question [TIAA/CREF or Fidelity?]

Postby jasg » Fri Jul 26, 2013 10:35 pm

I am struggling with the same question and have been considering the following for a three fund portfolio. Comments and advice welcome.

Fidelity funds have lower fees, but probably not significantly. Decision might be made for me if I can't rollover my 401k into my old TIAA-CREF account. FWIW, both have out performed a similar Vanguard portfolio this year.

    FSTVX Fidelity Spartan Market Idx Advtg 0.07
    FSPSX Fidelity Spartan Intl Idx Advtg Instl 0.06
    FXNAX Fidelity Spartan US Bond Idx Advtg Instl 0.05

    TIEIX TIAA-CREF Equity Index Fund Institutional Class 0.07
    TCIEX TIAA-CREF Intl Equity Index Fund Institutional Class 0.08
    TBIIX TIAA-CREF Bond Index Fund Institutional Class 0.15
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Re: Fund choice question [TIAA/CREF or Fidelity?]

Postby Kevin M » Fri Jul 26, 2013 10:47 pm

jasg, at those ERs, it looks like a toss up, although the lower ER for the Fido bond fund seems to give Fido the edge.

The main issue I see is that both international funds follow the EAFE index, so no emerging markets. Does the Fidelity plan offer the Spartan Global-ex US fund, which does include EM? If so, I'd go with Fidelity and use that fund instead. If not, does either plan offer a low-cost emerging markets fund? Last time I checked, the ER for the Fido EM fund was kind of high.

I wouldn't pay much attention to last year's performance. I don't see how they could be that different unless one is really screwing up on following its index.

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Re: Fund choice question [TIAA/CREF or Fidelity?]

Postby sometimesinvestor » Sat Jul 27, 2013 9:28 am

I like Fidelity but it may be that TIAA -Cref has a fixed income account (not bonds) that offeres a fixed relatively high interest rate which could work out well as long as interest rates continue to rise and bond prices suffer.
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Re: Fund choice question [TIAA/CREF or Fidelity?]

Postby tyler_cracker » Sat Jul 27, 2013 11:57 am

jasg wrote:FWIW, both have out performed a similar Vanguard portfolio this year.


don't pay attention to nonsense like this.

i would take the lower expense ratios. fwiw i own spartan total us stock and total bond.

the spartan international funds i've looked at lack the small cap/emerging markets exposure of vanguard's intl fund, so i hold VTIAX in taxable. it's a small difference and probably doesn't matter, but fyi.

the one think i know of that tiaa/cref uniquely offers is their real estate fund, which is structured differently (some say better) than regular REITs. you didn't mention REITs in your proposed portfolio but potentially something to think about.

but again: when in doubt, keep it simple. "pick the lowest ERs" is simple and won't lead you astray here.

gl!
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Re: Fund choice question [TIAA/CREF or Fidelity?]

Postby ofcmetz » Sun Jul 28, 2013 1:04 pm

I always like when life gives us a chance to choose between two good choices. List your exact funds available and we can give some better answers.
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Re: Fund choice question [TIAA/CREF or Fidelity?]

Postby lws6772 » Tue Jul 30, 2013 2:08 pm

ofcmetz wrote:I always like when life gives us a chance to choose between two good choices. List your exact funds available and we can give some better answers.
The fund choice question is for someone else, so my information is limited. The person currently has CREF funds, consisting of: TIAA Traditional, CREF Stock, CREF Equity Index, TIAA Real Estate, CREF Bond Market, CREF Social Choice. Her employer also offers Fidelity Funds(which ones I don't know yet) and she is wondering if Fidelity is better than CREF. Although I think she might be allowed to have a combination of funds from these two major fund families. Thanks very much for all the responses.
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Re: Fund choice question [TIAA/CREF or Fidelity?]

Postby nisiprius » Tue Jul 30, 2013 2:27 pm

It's not a brand name question, it's a fund-by-fund question.

I'd be a little leery of the Fidelity offerings. All the TIAA-CREF funds you mentioned, maybe even all of TIAA-CREF's funds, are decent choices.

The entire range of Fidelity funds is huge, and includes some Spartan index funds that are arguably better than their TIAA-CREF counterparts. To take one very specific example: depending on which share class is offered, if both the Fidelity Spartan Total Stock Market Index Fund and the TIAA-CREF Equity Index Fund are both offered, then whichever one has the lower expense ratio is better.

However, I'd be a little leery of lusting after strange funds, and very likely a lot of the Fidelity funds they are offering fall in that category. TIAA-CREF has "financing teachers' retirement" in its DNA. FIdelity, on the other hand, is the firm that pioneered the transformation of mutual funds from stodgy, conservative, committee-managed affairs, into showcases for stock-picking star managers. Undoubtedly the 401(k) will include those actively managed Fidelity funds that have been doing real well lately (Contrafund). Quite likely they will mysteriously omit the once-brightest-stars in Fidelity's galaxy like the Magellan Fund, which used to be in my employer's 401(k) plan. So, by golly, look down the chart at the 1-3-5-10 year numbers, and "Fidelity's funds have been outperforming TIAA-CREF's."
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Re: Fund choice question [TIAA/CREF or Fidelity?]

Postby lws6772 » Tue Jul 30, 2013 3:06 pm

nisiprius wrote:It's not a brand name question, it's a fund-by-fund question.

I'd be a little leery of the Fidelity offerings. All the TIAA-CREF funds you mentioned, maybe even all of TIAA-CREF's funds, are decent choices.

The entire range of Fidelity funds is huge, and includes some Spartan index funds that are arguably better than their TIAA-CREF counterparts. To take one very specific example: depending on which share class is offered, if both the Fidelity Spartan Total Stock Market Index Fund and the TIAA-CREF Equity Index Fund are both offered, then whichever one has the lower expense ratio is better.

However, I'd be a little leery of lusting after strange funds, and very likely a lot of the Fidelity funds they are offering fall in that category. TIAA-CREF has "financing teachers' retirement" in its DNA. FIdelity, on the other hand, is the firm that pioneered the transformation of mutual funds from stodgy, conservative, committee-managed affairs, into showcases for stock-picking star managers. Undoubtedly the 401(k) will include those actively managed Fidelity funds that have been doing real well lately (Contrafund). Quite likely they will mysteriously omit the once-brightest-stars in Fidelity's galaxy like the Magellan Fund, which used to be in my employer's 401(k) plan. So, by golly, look down the chart at the 1-3-5-10 year numbers, and "Fidelity's funds have been outperforming TIAA-CREF's."

I 100% agree with the leery of lusting comment. Thanks very much.
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Re: Fund choice question [TIAA/CREF or Fidelity?]

Postby raywax » Wed Jul 31, 2013 12:52 pm

I would go with TIAA because 1) the poster has access to their Institutional Class funds; 2) because the Traditional Account can be used, and is used by many TIAA-CREF participants, as their principal fixed income investment and 3) the availability of the TIAA Realty Account which provides access to a quality portfolio of commercial real estate which if the investor is familiar with can be managed very effective and which has been discussed here, and at the M* T-C forum, an innumerable number of times.

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Re: Fund choice question [TIAA/CREF or Fidelity?]

Postby lws6772 » Wed Jul 31, 2013 5:16 pm

Update on the Fidelity funds: Looks like all of the Fidelity Funds(Spartan and Fidelity Advantage Class) are available. Like previously stated, her(mid 50's) current TIAA/CREF portfolio is; TIAA Traditional, CREF Stock, CREF Equity Index, TIAA Real Estate, CREF Bond Market and CREF Social Choice. I am a fan of index funds, especially when you can get those Advantage Class rates. So, in light of this additional information, just want to check and see if anyone has any more input ? Thanks again very much for any help.
Last edited by lws6772 on Wed Jul 31, 2013 5:25 pm, edited 1 time in total.
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Re: Fund choice question [TIAA/CREF or Fidelity?]

Postby FinancialRamblings » Wed Jul 31, 2013 5:25 pm

FWIW, I've faced the same quandary in the past and wound up going with Fidelity (Spartan funds) over TIAA-CREF.
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Re: Fund choice question [TIAA/CREF or Fidelity?]

Postby JRA » Wed Jul 31, 2013 5:54 pm

My wife and I have the same options in our 403B's. In the past both of us contributed to Fidelity and have no regrets. For over a year, however, we have been putting all of our new money in TIAA-Cref, with the GSRA portion going to the Traditional (no withdraw restrictions). The 3% rate in the Traditional Account is a good deal, especially given the low yields on bonds and the possibility of a rising-rate environment. My wife is allowed to contribute to both plans simultaneously, but I am restricted to one or the other. The RA portions of our accounts are much smaller and are allocated to other funds (Vanguard funds for my wife and the Real estate Account for my 403B). The point I am making is that it doesn't need to be an either/or proposition. I prefer the Fidelity Spartan Funds, and the vast majority of our 403B money remains with Fidelity. Nevertheless, the present circumstances led me to explore a new strategy with respect to fixed income.
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Re: Fund choice question [TIAA/CREF or Fidelity?]

Postby jasg » Fri Aug 02, 2013 8:11 pm

I am unfamiliar with 403b plans. Any drawbacks to using them over a Traditional IRA (during retirement)?
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Re: Fund choice question [TIAA/CREF or Fidelity?]

Postby masteraleph » Fri Aug 02, 2013 9:20 pm

jasg wrote:I am unfamiliar with 403b plans. Any drawbacks to using them over a Traditional IRA (during retirement)?


A 403b is essentially the same as a 401k, only for non-profits, public education, and a few similar types of enterprises. TIAA-CREF started to provide pension replacement annuities for professors, so it's heavily involved in the 403b market. They have most of the same benefits and drawbacks as 401ks- often higher fees than IRAs, but better protection against bankruptcy, limited fund choices, etc. That is, unless you live in NJ- NJ treats 403bs sort of like (nondeductible) TIRAs in terms of taxation, with taxable gains when they're withdrawn and post-tax principal (taxed when it goes in).
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Re: Fund choice question [TIAA/CREF or Fidelity?]

Postby ps56k » Sun Aug 04, 2013 7:45 pm

Just opened a 403b for our wife / teacher.

Random coin toss and we decided on Fidelity and their Puritan Fund - FPURX -
Not sure why I chose that vs the other funds... maybe to "keep it simple stupid" for the future.
Didn't really look at the Spartan funds - should I ?
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Re: Fund choice question [TIAA/CREF or Fidelity?]

Postby masteraleph » Mon Aug 05, 2013 2:10 am

ps56k wrote:Just opened a 403b for our wife / teacher.

Random coin toss and we decided on Fidelity and their Puritan Fund - FPURX -
Not sure why I chose that vs the other funds... maybe to "keep it simple stupid" for the future.
Didn't really look at the Spartan funds - should I ?


FPURX has a fee of about .59%, at least in general- about .5% higher than most of the Spartan funds. Those numbers may vary within your wife's 403b, though.
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Re: Fund choice question [TIAA/CREF or Fidelity?]

Postby ps56k » Mon Aug 05, 2013 8:02 am

masteraleph wrote:FPURX has a fee of about .59%, at least in general- about .5% higher than most of the Spartan funds..

Thanks - will have to take another look at allocating to the Spartan funds - like the FSTMX total stock and FBIDX total bond.
I used the Puritan fund FPURX as a 60/40 fund to make it simple.

Here's how the Fidelity Spartan funds compare to the hybrid of Puritan with its 60/40 allocation.....
using the recession dip & recovery to see how things work out... in bad and good...
middle blue is Puritan, top is Spartan total bond, bottom is Spartan total stock.

Image
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Re: Fund choice question [TIAA/CREF or Fidelity?]

Postby lws6772 » Mon Aug 05, 2013 4:30 pm

Delete.
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Re: Fund choice question [TIAA/CREF or Fidelity?]

Postby lws6772 » Mon Aug 05, 2013 5:12 pm

ps56k wrote:Just opened a 403b for our wife / teacher.

Random coin toss and we decided on Fidelity and their Puritan Fund - FPURX -
Not sure why I chose that vs the other funds... maybe to "keep it simple stupid" for the future.
Didn't really look at the Spartan funds - should I ?
Thanks for your post, it got me to thinking in a different direction. Do Bogleheads think it would be better to go; 1. with a managed fund like Fidelity Puritan or Fidelity Balanced, albeit with a higher expense ratio, but an investment mix picked out for you or 2. try to come up with ones own mix(though I am not sure what a good mix would be) from some of the Spartan Funds, with their lower expense ratios? After heart surgery several years ago, I am no longer in the stock market(was an indexer), but am trying to help someone with their Fidelity choices and appreciate simple more than ever these days. Thanks very much for any comments.
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Re: Fund choice question [TIAA/CREF or Fidelity?]

Postby ruralavalon » Mon Aug 05, 2013 8:54 pm

lws6772 wrote:If your employer only offers TIAA/CREF or Fidelity funds(or a combination of the two), what do you think is the best choice? Thanks very much for any help.

If all or most of Fidelity's Spartan funds are offered, then Fidelity.

I would definitely prefer the Spartan funds to the others you mention. and over any managed fund they have. Expenses matter, and they matter a lot. buyupside, "Investment Fee Calculator - See How Fees Reduce Your Returns" .
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