Approximate VTSMX in 401(k) using VINIX + VSCIX?

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dct1970
Posts: 13
Joined: Fri Mar 13, 2015 2:54 pm

Approximate VTSMX in 401(k) using VINIX + VSCIX?

Post by dct1970 » Sat Apr 30, 2016 10:45 pm

I'm 46-years-old and trying to approximate Vanguard Target Retirement 2035 Fund (VTTHX) across all my investments.

My current holdings are as follows:
* 401(k)
= VINIX - 66.8%
* Roth IRA (funding to max amount each year)
= VTIAX - 6.6%
* Traditional IRA (not funding)
= VTIAX - 5.3%
= VBTLX - 14.7%
= VTABX - 6.6%

VTTHX uses VTSMX for its "domestic" stock component.

When I went "all in" for VINIX a year ago, I mistakenly assumed it was equivalent to VTSMX but I now understand VINIX is basically the S&P 500.

Recently VSCIX was added to our 401(k) as a small-cap option. The mid-cap options in the 401(k) are FLMVX (ER 0.94% per plan doc but Morningstar shows 0.74%] and APHMX [ER 0.95%].

So my questions are thus:
* Should I try to better approximate VTSMX in the 401(k) than just using VINIX?
* If so, how much "non-VINIX" should I have?
* Is VINIX + VSCIX a "good enough" approximation of VTSMX?
* Should I include mid-cap with FLMVX and APHMX even though their ERs are crazy high?
* Would VMCIX [or VIEIX] be a good fund to suggest/request for my 401(k) as a mid-cap option?

Thanks for your input.

lack_ey
Posts: 6547
Joined: Wed Nov 19, 2014 11:55 pm

Re: Approximate VTSMX in 401(k) using VINIX + VSCIX?

Post by lack_ey » Sat Apr 30, 2016 10:55 pm

dct1970 wrote: * Should I try to better approximate VTSMX in the 401(k) than just using VINIX?
You can. I'm not sure I'd bother, though. There's an 80% overlap and the other 20% is generally pretty similar too.
dct1970 wrote: * If so, how much "non-VINIX" should I have?
Total US stock is very close to 80% S&P 500, 20% the rest. You could use 20% non-VINIX but this would significantly overweight the actual stocks held in VSCIX, the small cap fund, while giving a 0 weighting to a bunch of mid caps and micro caps. If you use much less than 20% you might as well not even bother.
dct1970 wrote: * Is VINIX + VSCIX a "good enough" approximation of VTSMX?
Depends on your goals for asset coverage.
dct1970 wrote: * Should I include mid-cap with FLMVX and APHMX even though their ERs are crazy high?
I wouldn't, not worth the cost.
dct1970 wrote: * Would VMCIX [or VIEIX] be a good fund to suggest/request for my 401(k) as a mid-cap option?
If you ask for anything, ask for VIEIX, the extended market index. The mid cap and small cap funds still leave out some micro caps, and they don't actually complement the S&P 500, still leaving some mid/large stuff out and I think double-counting others. I'd need to check to confirm, but the point is that it's not a clean fit, for whatever little that's worth. The extended market index is the one-stop shop for US stocks not in the S&P 500.

But I wouldn't actively bring this up because it's unimportant and you shouldn't try rocking the boat unless it actually matters and you have a real point to make rather than just some preference.

pkcrafter
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Re: Approximate VTSMX in 401(k) using VINIX + VSCIX?

Post by pkcrafter » Sun May 01, 2016 12:04 pm

Approximating total stock market with various funds.

https://www.bogleheads.org/wiki/Approxi ... ock_market

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

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