Voya 401k investment advice

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Goosh
Posts: 16
Joined: Sat Aug 08, 2020 1:00 pm

Voya 401k investment advice

Post by Goosh »

Hi All,

Recently we got Voya as our 401k broker, very limited investment options. What would you suggest to invest from below list? I am new to investing after reading few articles here selected 100% in Voya US Stock Index, expense is the lowest 0.27%.
  • Investment Options Asset Class - Style Fund Inception Date Gross Fund Exp %* Net Fund Exp %*
  • Voya Fixed Account - 705 (1) (11) Stability of Principal
  • Voya Fixed Account (4062) - 4062 (2) (11) Stability of Principal
BONDS
  • BlackRock High Yield Bond Portfolio - Institutional Shares - 1141 Bonds 11/19/1998 0.62 0.62
  • Voya Intermediate Bond Fund - Class I - 238 (3) (9) Bonds 12/15/1998 0.36 0.36
  • Voya GNMA Income Fund - Class I - 240 (4) (10) Bonds 8/17/1973 0.6 0.54
  • AB Global Bond Fund - Class A - 2279 (5) Bonds 3/27/1992 0.81 0.81
Life Cycle
  • American Funds 2010 Target Date Retirement Fund®- Class R-4 - 9220 Asset Allocation 2/1/2007 0.66 0.66
  • American Funds 2015 Target Date Retirement Fund®- Class R-4 - 9221 Asset Allocation 2/1/2007 0.66 0.66
  • American Funds 2020 Target Date Retirement Fund®- Class R-4 - 9222 Asset Allocation 2/1/2007 0.66 0.66
  • American Funds 2025 Target Date Retirement Fund®- Class R-4 - 9223 Asset Allocation 2/1/2007 0.68 0.68
  • American Funds 2030 Target Date Retirement Fund®- Class R-4 - 9224 Asset Allocation 2/1/2007 0.7 0.7
  • American Funds 2035 Target Date Retirement Fund®- Class R-4 - 9225 Asset Allocation 2/1/2007 0.72 0.72
  • American Funds 2040 Target Date Retirement Fund®- Class R-4 - 9226 Asset Allocation 2/1/2007 0.73 0.73
  • American Funds 2045 Target Date Retirement Fund®- Class R-4 - 9227 Asset Allocation 2/1/2007 0.73 0.73
  • American Funds 2050 Target Date Retirement Fund®- Class R-4 - 9228 Asset Allocation 2/1/2007 0.74 0.74
  • American Funds 2055 Target Date Retirement Fund®- Class R-4 - 1872 Asset Allocation 2/1/2010 0.75 0.75
  • American Funds 2060 Target Date Retirement Fund®- Class R-4 - 9638 Asset Allocation 3/27/2015 0.76 0.76
  • American Funds 2065 Target Date Retirement Fd® - Class R-4 - E408 Asset Allocation 3/27/2020 0.8 0.76
Balanced
  • American Funds American Balanced Fund® - Class R-5 - 9173 Balanced 7/26/1975 0.31 0.31
Large CAP Value
  • American Funds Washington Mutual Investors FundSM-Class R-5 - 300 Large Cap Value 7/31/1952 0.32 0.32
  • JPMorgan U.S. Equity Fund - Class R6 Shares - 3168 (6) Large Cap Value 9/17/1993 0.49 0.44
  • Voya U.S. Stock Index Portfolio - Institutional Class - 829 ($17,680.67 ) Large Cap Value 5/3/2004 0.27 0.27
Large CAP Growth
  • VY® T. Rowe Price Growth Equity Portfolio - Initial Class - 111 (7) Large Cap Growth 11/28/1997 0.81 0.73
Small Mid Speciality
  • Vanguard® Mid-Cap Index Fund - Admiral™ Shares - 756 ($228.29 ) Small/Mid/Specialty 11/12/2001 0.05 0.05
  • Voya MidCap Opportunities Portfolio - Class I - 081 (8) Small/Mid/Specialty 5/5/2000 0.87 0.66
  • Victory Sycamore Established Value Fund - Class A - 2798 Small/Mid/Specialty 5/5/2000 0.92 0.92
  • Vanguard® Small-Cap Index Fund - Admiral™ Shares - 757 ($228.65 ) Small/Mid/Specialty 11/13/2000 0.05 0.05
  • VY® JPMorgan Small Cap Core Equity Portfolio- Institutional - 780 Small/Mid/Specialty 5/1/2002 0.85 0.85
  • Vanguard® Explorer™ Fund - Admiral™ Shares - 828 Small/Mid/Specialty 11/12/2001 0.34 0.34
  • Victory Integrity Small-Cap Value Fund - Class Y - 695 Small/Mid/Specialty 12/26/1996 1.12 1.12
  • Cohen & Steers Realty Shares, Inc. - 1172 (12) Small/Mid/Specialty 7/2/1991 0.96 0.89
Global International
  • Invesco Oppenheimer Developing Markets Fund - Class Y - 1954 Global / International 9/7/2005 1 1
  • American Funds EuroPacific Growth Fund® - Class R-5 - 817 Global / International 4/16/1984 0.51 0.51
  • MFS® International Intrinsic Value Fund - Class R3 - 9206 Global / International 10/24/1995 0.98 0.98
Thank you,
Goosh
retiredjg
Posts: 41655
Joined: Thu Jan 10, 2008 12:56 pm

Re: Voya 401k investment advice

Post by retiredjg »

I would use these....
  • Voya Intermediate Bond Fund - Class I 0.36
    Voya U.S. Stock Index Portfolio - Institutional Class - 829  0.27


I might use this one....but would probably hold a better international choice in an IRA instead.
  • American Funds EuroPacific Growth Fund® - Class R-5 - 817 0.51

Depending on what is in the American Funds Balanced Fund, it seems to have a reasonable expense ratio. Lower than usual for them. It could be an error.
lakpr
Posts: 5973
Joined: Fri Mar 18, 2011 9:59 am

Re: Voya 401k investment advice

Post by lakpr »

These are the best options that I see within your plan
  1. Voya U.S. Stock Index Portfolio - Institutional Class - 829 ($17,680.67 ) Large Cap Value 5/3/2004 0.27 0.27
  2. American Funds American Balanced Fund® - Class R-5 - 9173 Balanced 7/26/1975 0.31 0.31
  3. Vanguard® Mid-Cap Index Fund - Admiral™ Shares - 756 ($228.29 ) Small/Mid/Specialty 11/12/2001 0.05 0.05
  4. Vanguard® Small-Cap Index Fund - Admiral™ Shares - 757 ($228.65 ) Small/Mid/Specialty 11/13/2000 0.05 0.05
  5. American Funds EuroPacific Growth Fund® - Class R-5 - 817 Global / International 4/16/1984 0.51 0.51
  6. Voya Intermediate Bond Fund - Class I - 238 (3) (9) Bonds 12/15/1998 0.36 0.36
    Dummy text
Do you have any other assets, IRA accounts, past 401k plans, etc.? Amounts in those accounts, if you do?
Since you have Vanguard mid-cap and small-cap index funds available at 0.05%, you can use them to replicate the "completion index" fund, but the main question remains as to what fund to choose for the large-cap, international equities and bond funds.

It is possible to chose the AF-American Balanced Fund with a 0.31%, for me it clicks multiple check boxes.
1. It has a 55:45 split between equities and bonds
2. It has 20% of the equities in international equities (personally I do not want more than that in my own portfolio)
3. It has almost the lowest cost in the line up, it can be combined to arrive at your desired allocation ratio.

You can make this the core holding of your portfolio, and fill out the deficits using the funds mentioned above

Say you want your portfolio to be 50:20:30 to domestic / international / bonds in your portfolio.

Start with the bond allocation. To get 30% of the bonds with a fund that allocates 45% to bonds, you need to split about (30/45) = 67% of your portfolio to the balanced fund. By doing so, you get bonds in your portfolio at a cheaper price than the Voya Intermediate term bond fund (0.31% instead of 0.36%; and in today's low yield environment, a 0.05% reduction in expenses is a big win!)

Next move on to the international allocation. With a 67% allocation to the balanced fund, you already get 10% (proportion of international equities in the balanced fund) * 67% (your allocation to this balanced fund) = 6.7% in international equities. Your target is 20%, deficit = 13.3%. Round it up slightly to 14% (fractions of a percentage don't make big difference in returns) to the Euro-Pacific growth fund.

Rest to the Voya Stock Index fund, and optionally the Vanguard small-cap index fund depending on whether you will be satisfied enough with a fund that follows the top-1000 companies only (The Voya fund follows Russell-1000 index) or want to replicate the total stock market index.
User avatar
Topic Author
Goosh
Posts: 16
Joined: Sat Aug 08, 2020 1:00 pm

Re: Voya 401k investment advice

Post by Goosh »

lakpr wrote: Tue Sep 15, 2020 12:22 pm These are the best options that I see within your plan
  1. Voya U.S. Stock Index Portfolio - Institutional Class - 829 ($17,680.67 ) Large Cap Value 5/3/2004 0.27 0.27
  2. American Funds American Balanced Fund® - Class R-5 - 9173 Balanced 7/26/1975 0.31 0.31
  3. Vanguard® Mid-Cap Index Fund - Admiral™ Shares - 756 ($228.29 ) Small/Mid/Specialty 11/12/2001 0.05 0.05
  4. Vanguard® Small-Cap Index Fund - Admiral™ Shares - 757 ($228.65 ) Small/Mid/Specialty 11/13/2000 0.05 0.05
  5. American Funds EuroPacific Growth Fund® - Class R-5 - 817 Global / International 4/16/1984 0.51 0.51
  6. Voya Intermediate Bond Fund - Class I - 238 (3) (9) Bonds 12/15/1998 0.36 0.36
    Dummy text
Do you have any other assets, IRA accounts, past 401k plans, etc.? Amounts in those accounts, if you do?
Since you have Vanguard mid-cap and small-cap index funds available at 0.05%, you can use them to replicate the "completion index" fund, but the main question remains as to what fund to choose for the large-cap, international equities and bond funds.

It is possible to chose the AF-American Balanced Fund with a 0.31%, for me it clicks multiple check boxes.
1. It has a 55:45 split between equities and bonds
2. It has 20% of the equities in international equities (personally I do not want more than that in my own portfolio)
3. It has almost the lowest cost in the line up, it can be combined to arrive at your desired allocation ratio.

You can make this the core holding of your portfolio, and fill out the deficits using the funds mentioned above

Say you want your portfolio to be 50:20:30 to domestic / international / bonds in your portfolio.

Start with the bond allocation. To get 30% of the bonds with a fund that allocates 45% to bonds, you need to split about (30/45) = 67% of your portfolio to the balanced fund. By doing so, you get bonds in your portfolio at a cheaper price than the Voya Intermediate term bond fund (0.31% instead of 0.36%; and in today's low yield environment, a 0.05% reduction in expenses is a big win!)

Next move on to the international allocation. With a 67% allocation to the balanced fund, you already get 10% (proportion of international equities in the balanced fund) * 67% (your allocation to this balanced fund) = 6.7% in international equities. Your target is 20%, deficit = 13.3%. Round it up slightly to 14% (fractions of a percentage don't make big difference in returns) to the Euro-Pacific growth fund.

Rest to the Voya Stock Index fund, and optionally the Vanguard small-cap index fund depending on whether you will be satisfied enough with a fund that follows the top-1000 companies only (The Voya fund follows Russell-1000 index) or want to replicate the total stock market index.
thats deep thinking!!! Thank you lakpr
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