Change VSMPX for VIIIX in my 401k?

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cnblure
Posts: 38
Joined: Tue Jan 05, 2016 9:45 pm

Change VSMPX for VIIIX in my 401k?

Post by cnblure »

I was reviewing all of the options available in my 401k today and noticed VIIIX. I'm not sure why I didn't notice it before. After reading a little about it, I'm left wondering if I should convert the US stock part of my 401k ($86,000 in VSMPX is currently about 63% of my 401k). They seem very similar in expense ratio, top holdings, ect. VSMPX is more diversified but when VIIIX is spread over 500 stocks, this may not be significant.

I can't really find a reason to switch, but I thought I'd ask just to make sure I'm not missing something.
For completeness I'm 29 and bond allocation is VBTIX(27%) and International is VTPSX(10%).

Thanks
retiringwhen
Posts: 1887
Joined: Sat Jul 08, 2017 10:09 am
Location: New Jersey, USA

Re: Change VSMPX for VIIIX in my 401k?

Post by retiringwhen »

cnblure wrote: Sat Apr 20, 2019 6:24 am I was reviewing all of the options available in my 401k today and noticed VIIIX. I'm not sure why I didn't notice it before. After reading a little about it, I'm left wondering if I should convert the US stock part of my 401k ($86,000 in VSMPX is currently about 63% of my 401k). They seem very similar in expense ratio, top holdings, ect. VSMPX is more diversified but when VIIIX is spread over 500 stocks, this may not be significant.

I can't really find a reason to switch, but I thought I'd ask just to make sure I'm not missing something.
For completeness I'm 29 and bond allocation is VBTIX(27%) and International is VTPSX(10%).

Thanks
I wouldn’t change. VSMPX is the gold standard of the three-fund portfolio, you are less diversified with the VIIX and the ER is the same. You are stepping back using VIIIX.

BTW, from a cost perspective it is likely that the total stock market fund (VSMPX) will be able to get a bit more securities lending revenue than VIIIX so it will have effectively lower costs and possibly even a positive tracking against the core index.

I would stay put (ps, I only have the 500 Index in my 401(K) and pine for something like VSMPX to the point I have sent requests several times in the pasts few years to get them to add it to the lineup...)
lakpr
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Joined: Fri Mar 18, 2011 9:59 am

Re: Change VSMPX for VIIIX in my 401k?

Post by lakpr »

+1 to stay put.

One thing that caught my eye was that you said the bond allocation in your portfolio is 27%. That seems way too conservative, recommended bond allocation is usually Age-10 to Age-15, so that puts it at most 20% allocation for your age.

Unless, this is the result of having more equities elsewhere such as a Roth IRA
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ruralavalon
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Location: Illinois

Re: Change VSMPX for VIIIX in my 401k?

Post by ruralavalon »

Vanguard Total Stock Mkt Idx Instl Pls (VSMPX) ER 0.02% is more diversified at the same expense ratio. Keep it.
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