Simulating a total stock market index in my 401K

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dbapaddy
Posts: 31
Joined: Tue Aug 14, 2018 1:52 pm

Simulating a total stock market index in my 401K

Post by dbapaddy » Wed Oct 10, 2018 7:25 pm

I have a 401K through work, with the following options, and expense ratios:

Vanguard 500 Index Fund - Admiral(TM) Shares (.04%)
Vanguard Mid-Cap Index Fund - Admiral(TM) Shares (.05%)
Vanguard Small-Cap Index Fund - Admiral(TM) Shares (.05%)

If Vanguard Total Stock Market Index Fund was available, I would have 70% of my holdings in it.

What percentage should I allocate to the above index funds to closely mimic a 70% holding in a Vanguard Total Stock Market Index Fund.

Thanks for any help.

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vineviz
Posts: 2303
Joined: Tue May 15, 2018 1:55 pm

Re: Simulating a total stock market index in my 401K

Post by vineviz » Wed Oct 10, 2018 7:33 pm

80% S&P 500 + 20% small cap
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

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FiveK
Posts: 5833
Joined: Sun Mar 16, 2014 2:43 pm

Re: Simulating a total stock market index in my 401K

Post by FiveK » Wed Oct 10, 2018 7:36 pm

81/4/15, according to Approximating total stock market - Bogleheads.

Multiplying by 70%, that would be ~57/3/10.

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Taylor Larimore
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Posts: 27621
Joined: Tue Feb 27, 2007 8:09 pm
Location: Miami FL

Re: Simulating a total stock market index in my 401K

Post by Taylor Larimore » Wed Oct 10, 2018 7:47 pm

dbapaddy wrote:
Wed Oct 10, 2018 7:25 pm
I have a 401K through work, with the following options, and expense ratios:

Vanguard 500 Index Fund - Admiral(TM) Shares (.04%)
Vanguard Mid-Cap Index Fund - Admiral(TM) Shares (.05%)
Vanguard Small-Cap Index Fund - Admiral(TM) Shares (.05%)

If Vanguard Total Stock Market Index Fund was available, I would have 70% of my holdings in it.

What percentage should I allocate to the above index funds to closely mimic a 70% holding in a Vanguard Total Stock Market Index Fund.

Thanks for any help.
dbapaddy:

According to Morningstar, Vanguard Total Stock Market Index Fund is composed of:
76% Large Cap stocks
18% Mid Cap stocks
6% Small Cap stocks

I would allocate 75% to:
75% S&P 500 Index Fund
25% Vanguard Small-Cap Fund

6% Small Cap is too small to make much difference so I increased it to 25% and eliminated Mid Caps. Result: one less fund. Keep investing simple.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

dbapaddy
Posts: 31
Joined: Tue Aug 14, 2018 1:52 pm

Re: Simulating a total stock market index in my 401K

Post by dbapaddy » Wed Oct 10, 2018 7:52 pm

Taylor Larimore wrote:
Wed Oct 10, 2018 7:47 pm
dbapaddy wrote:
Wed Oct 10, 2018 7:25 pm
I have a 401K through work, with the following options, and expense ratios:

Vanguard 500 Index Fund - Admiral(TM) Shares (.04%)
Vanguard Mid-Cap Index Fund - Admiral(TM) Shares (.05%)
Vanguard Small-Cap Index Fund - Admiral(TM) Shares (.05%)

If Vanguard Total Stock Market Index Fund was available, I would have 70% of my holdings in it.

What percentage should I allocate to the above index funds to closely mimic a 70% holding in a Vanguard Total Stock Market Index Fund.

Thanks for any help.
dbapaddy:

According to Morningstar, Vanguard Total Stock Market Index Fund is composed of:
76% Large Cap stocks
18% Mid Cap stocks
6% Small Cap stocks

I would allocate 75% to:
75% S&P 500 Index Fund
25% Vanguard Small-Cap Fund

6% Small Cap is too small to make much difference so I increased it to 25% and eliminated Mid Caps. Result: one less fund. Keep investing simple.

Best wishes.
Taylor
Thanks for that extra/detailed information...appreciate it.

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