Help on TIAA CREF vs T ROWE vs FIDELITY

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gary11
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Help on TIAA CREF vs T ROWE vs FIDELITY

Post by gary11 » Sun Feb 08, 2015 7:51 pm

Hello Diehards,
I need help on selecting an investing company for 403(b) plan offered by University of Wisconsin System for its employees. There are 3 companies that interest me; Fidelity, T Rowe Price and TIAA-CREF (Vanguard is not a choice). To keep things simple I have decided to go with their Target Date funds (2035 in particular) and here are funds:
TIAA-CREF Lifecycle 2035 Fund (TCIIX), ER 0.45%
T. Rowe Price Retirement 2035 Fund (TRRJX), ER 0.75%
Fidelity Freedom® 2035 Fund (FFTHX), ER 0.78%

I am leaning towards selecting TIAA-CREF one because of lower ER.
My questions for you folks are:
Are all Target Date funds created equally?
Is there any reason to pick one particular fund family over other from above choices?
Would I better off with mix of Fido Spartan funds mimicking Freedom 2035 allocation?

Thanks for your time and any insights you might have for me!

Fclevz
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Re: Help on TIAA CREF vs T ROWE vs FIDELITY

Post by Fclevz » Sun Feb 08, 2015 7:58 pm

For what it's worth, Morningstar rates only two target fund series as gold medal; T. Rowe Price and Vanguard.

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Duckie
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Re: Help on TIAA CREF vs T ROWE vs FIDELITY

Post by Duckie » Sun Feb 08, 2015 8:33 pm

gary11 wrote:Are all Target Date funds created equally?
No. You have to see what they hold, what the AA is, and what the glide path is.
Is there any reason to pick one particular fund family over other from above choices?
It depends on what the other options and expense ratios are.
Would I better off with mix of Fido Spartan funds mimicking Freedom 2035 allocation?
Probably. It depends on the costs. But I would prefer a handful of Spartan funds over the 25 fund mishmash in the 2035 fund.

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oldzey
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Re: Help on TIAA CREF vs T ROWE vs FIDELITY

Post by oldzey » Sun Feb 08, 2015 9:14 pm

What other TIAA-CREF Funds are offered? TIAA Traditional and the TIAA Real Estate Account are a consideration, in my opinion.
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The Wizard
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Re: Help on TIAA CREF vs T ROWE vs FIDELITY

Post by The Wizard » Sun Feb 08, 2015 9:16 pm

I'd go with TIAA-CREF, since you'll have access to Trad and TREA, as we call them...
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gary11
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Re: Help on TIAA CREF vs T ROWE vs FIDELITY

Post by gary11 » Sun Feb 08, 2015 10:54 pm

THANKS ALL for your responses!
I didn't know about TIAA Traditional Annuity and Real Estate investment options which are also available. Since I don't anything about them I am going to read and read and look into it.

JimInIllinois
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Re: Help on TIAA CREF vs T ROWE vs FIDELITY

Post by JimInIllinois » Sun Feb 08, 2015 11:02 pm

I'll second TIAA Traditional and Real Estate Accounts. For stocks and bonds, however, if you have access to the Fidelity Spartan funds they are comparable to Vanguard in expenses.

dirkronk
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Re: Help on TIAA CREF vs T ROWE vs FIDELITY

Post by dirkronk » Mon Feb 09, 2015 9:39 am

Hi gary11.

No, Target Date funds aren't all created equal. They do reflect the underlying funds...and the "mishmash" (as Duckie says) isn't always that wonderful. However, as Fclevz has pointed out, Vanguard and T. Rowe have been consistently impressive since their outset, and this is reflected in their M* 5-Star/Gold ratings. VG would be a slam dunk recommendation here, no doubt, IF it were available to you: based on index funds and with low ER. But we know that's out.

Personally, I'd give Fidelity a miss. They have some really good actively managed accounts and really good passive/index options, but they need to work more on the target date funds. 24 underlying funds really do make for a mishmash. It's clear that they've been struggling with these offerings, and have even brought in heavy hitters to help a bit (Will Danoff of Contrafund and Joel Tillinghast of Low Priced Stock), but their influence hasn't made that big a difference yet...and may not, given the weighting of the funds they're advising and how those funds are used inside the target date wrappers. The ER is highest of your 3 contenders, as well.

I'm personally much more impressed by T. Rowe, and have been considering the 2020 version for my own eventual 401K rollover (but have been looking at more of a Bogle approach as well...hence my presence here, to read and learn). Even though the target funds are based on 18 underlying active funds, the blend has been intelligent and management has been consistent and positive, as have results. Thus, I'm less put off by the ER than I might be. I like T. Rowe's Capital Appreciation Fund as a balanced investment option even more than their target date funds, but that's closed to new individual investors and I assume not an option for you (it's still open through some institutional plans).

The TIAA-CREF is less familiar to me, but M* rates it 4-Star/Bronze...not bad at all, really, yet with high risk/avg return indicators. (T. Rowe's is high risk/high return, by contrast...as is VG for this date. Your Fidelity option is avg/avg. The high risk mitigates somewhat as the glide path toward higher bond holdings kicks in.) It's based on 17 underlying funds, and a number of those look actively managed, as well, which explains why the ER isn't in the super-low category, even though lower than your other two options. I'd be more enthusiastic about this if it were more passive, and with fewer components. I've considered TIAA-CREF funds in the past for use in my taxable investments, but wound up giving them a miss because both management and results came across as...well, tepid.

Lots to consider. Personally, I'd lean toward the T. Rowe, but you'll have plenty of other input here...and perhaps someone with actual experience with TIAA-CREF will weigh in. Good luck.

Dirk

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Re: Help on TIAA CREF vs T ROWE vs FIDELITY

Post by flyingbison » Mon Feb 09, 2015 10:17 am

I'm with TIAA-CREF through UWS, but I don't hold any of the Lifecycle funds. I have target date funds with Vanguard, though. I think they are fine if you want to keep things really simple, though the AAs are usually a little aggressive for my taste, so I pick earlier date funds.

In addition to the Traditional and RE options mentioned above, you also have access to the T-C S&P 500 Index with an expense ratio of 0.06

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