401(k) Choices - Help Please

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creekstone
Posts: 2
Joined: Sun Apr 24, 2016 4:18 pm

401(k) Choices - Help Please

Post by creekstone » Sat Aug 12, 2017 7:24 pm

I would greatly appreciate some help evaluating the choices offered by my SO’s 401(k).

For perspective, we both utilize Vanguard Target Date funds for our Roth IRAs. And I use a T. Rowe Price Target Date fund for my 401(k).
Here are the choices offered in SO’s 401(k):

Equity/Stock
Ariel Appreciation Investor, CAAPX, ER 1.12%
BlackRock Value Opportunities Inv A, MDSPX, ER 1.26%
Deutsche Real Estate Securities A, RRRAX, ER 0.98%
Fidelity Advisor New Insights M, FNITX, ER 1.14%
Invesco Diversified Dividend R5, DDFIX, ER 0.54%
iShares MSCI EAFE Intl Idx Inv A, MDIIX, ER 0.38%
iShares Russell 2000 Small-Cap Idx Inv A, MDSKX, ER 0.50%
iShares S&P 500 Index Institutional, BSPIX, ER 0.11%
MSF Growth A, MFEGX, ER 0.97%
Oppenheimer Developing Markets A, ODMAX, ER 1.32%
PRIMECAP Odyssey Growth, POGRX, ER 0.66%
T. Rowe Price International Discovery, PRIDX, ER 1.20%
Templeton Foreign A, TEMFX, ER 1.22%
Davis NY Venture A, NYVTX, ER 0.89%

Bond/Fixed Income
BlackRock Total Return Inv A1, MEHQX, ER 0.75%
JPMorgan Government Bond A, OGGAX, ER 0.95%
PIMCO Real Return A, PRTNX, ER 0.98%

Stable Value Fund
Invesco Stable Value Retirement Fund CL2, N/A, ER 1.22%

Merrill Lynch GoalManager Models
Aggressive Model, 95% Equity/Stock, 5% Bond/Fixed Income, ER N/A
Conservative Model, 20% Equity/Stock, 74% Bond/Fixed, 6% Stable, ER N/A
Conservative to Moderate Model, 40% Equity/Stock, 56% Bond/Fixed, 4% Stable, ER N/A
Moderate Model, 60% Equity/Stock, 38% Bond/Fixed, 2% Stable, ER N/A
Moderate to Aggressive Model, 80% Equity/Stock, 20% Bond/Fixed, ER N/A

She is currently enrolled in the GoalManager Moderate Model. None of the models detail the percentages of the various holdings or the expense ratio.

Please suggest how she can best emulate our target date holdings while minimizing her expenses.

Thanks!

inbox788
Posts: 4099
Joined: Thu Mar 15, 2012 5:24 pm

Re: 401(k) Choices - Help Please

Post by inbox788 » Sat Aug 12, 2017 7:34 pm

creekstone wrote:
Sat Aug 12, 2017 7:24 pm
iShares S&P 500 Index Institutional, BSPIX, ER 0.11%
Find out how much in fees the ML plans are charging. They will almost always include the fees of the funds, which if active, may be very high, and they might add additional wrap fees. Lacking any additional information, I'd avoid them completely!
How old is he or she? If you're fairly young or the account is relative small, I'd forget about any other funds and only invest in the only decent fund that has reasonable fees (and still it's twice or more what others are charging).

As you get older and the account grows, use your other investments to better balance your AA with international, small/mid caps and bonds.

lazylarry
Posts: 347
Joined: Sat Apr 04, 2015 10:35 pm
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Re: 401(k) Choices - Help Please

Post by lazylarry » Sun Aug 13, 2017 12:24 pm

We probably need more info as per the above main stickies in the forum, e.g. age, desired AA, tax bracket, etc.

But as mentioned, BSPIX is good, tracks S&P and low ER
iShares MSCI EAFE Intl Idx Inv A, MDIIX, ER 0.38% is also good if you want international diversification.

Your bond funds are a bit odd and I don't have enough experience with them to give you good information. The duration on many of those is quite long, so I'm not sure if they are worth investing. Perhaps other posters on the forum can provide more insight into this.
Asking questions: https://www.bogleheads.org/forum/viewtopic.php?f=1&t=6212 | My profile: https://www.bogleheads.org/forum/memberlist.php?mode=viewprofile&u=86026

retiredjg
Posts: 30372
Joined: Thu Jan 10, 2008 12:56 pm

Re: 401(k) Choices - Help Please

Post by retiredjg » Sun Aug 13, 2017 12:34 pm

These are the best choices.
  • iShares S&P 500 Index Institutional, BSPIX, ER 0.11%
    iShares MSCI EAFE Intl Idx Inv A, MDIIX, ER 0.38%
    BlackRock Total Return Inv A1, MEHQX, ER 0.75% (or possibly the stable value fund if it pays enough)
This is the best she can do unless you are willing to change from target funds or add a bond fund in one of the other accounts. Or CDs could work I guess.

lazylarry
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Re: 401(k) Choices - Help Please

Post by lazylarry » Sun Aug 13, 2017 12:52 pm

retiredjg wrote:
Sun Aug 13, 2017 12:34 pm
These are the best choices.
  • iShares S&P 500 Index Institutional, BSPIX, ER 0.11%
    iShares MSCI EAFE Intl Idx Inv A, MDIIX, ER 0.38%
    BlackRock Total Return Inv A1, MEHQX, ER 0.75% (or possibly the stable value fund if it pays enough)
This is the best she can do unless you are willing to change from target funds or add a bond fund in one of the other accounts. Or CDs could work I guess.
retiredjg, why the MEHQX? Just due to the ER, intermediate maturity and decent TTM? The reason I'm asking is because I saw that there are many BBB rated bonds in there, so not sure how to best assess those bond funds.
Asking questions: https://www.bogleheads.org/forum/viewtopic.php?f=1&t=6212 | My profile: https://www.bogleheads.org/forum/memberlist.php?mode=viewprofile&u=86026

TIAX
Posts: 844
Joined: Sat Jan 11, 2014 12:19 pm

Re: 401(k) Choices - Help Please

Post by TIAX » Sun Aug 13, 2017 1:12 pm

lazylarry wrote:
Sun Aug 13, 2017 12:52 pm
retiredjg wrote:
Sun Aug 13, 2017 12:34 pm
These are the best choices.
  • iShares S&P 500 Index Institutional, BSPIX, ER 0.11%
    iShares MSCI EAFE Intl Idx Inv A, MDIIX, ER 0.38%
    BlackRock Total Return Inv A1, MEHQX, ER 0.75% (or possibly the stable value fund if it pays enough)
This is the best she can do unless you are willing to change from target funds or add a bond fund in one of the other accounts. Or CDs could work I guess.
retiredjg, why the MEHQX? Just due to the ER, intermediate maturity and decent TTM? The reason I'm asking is because I saw that there are many BBB rated bonds in there, so not sure how to best assess those bond funds.
0.38% and certainly 0.75% are pretty high ERs so if you have other retirement accounts like IRAs, consider just buying the S&P 500 fund in your 401(k) and complement the fund in other accounts.

retiredjg
Posts: 30372
Joined: Thu Jan 10, 2008 12:56 pm

Re: 401(k) Choices - Help Please

Post by retiredjg » Sun Aug 13, 2017 2:44 pm

lazylarry wrote:
Sun Aug 13, 2017 12:52 pm
retiredjg, why the MEHQX? Just due to the ER, intermediate maturity and decent TTM? The reason I'm asking is because I saw that there are many BBB rated bonds in there, so not sure how to best assess those bond funds.
Simply because it is the best of the funds offered based on expense ratio. If you want bonds in that account, that is the one I'd choose. BTW, BBB bonds are investment grade bonds, not junk bonds.

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