tiaa 403b available Vanguard funds advice

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Dlogiudice
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Joined: Sat Jan 08, 2022 6:04 pm

tiaa 403b available Vanguard funds advice

Post by Dlogiudice »

As i mentioned in a previous post , I have a 27 year accumulation of investments in TIAA as a member of a New State university
i believe i have done pretty well but as i am within a year possible retirement i am concerned about my allocation
Tiaa has recently shuffled the deck on the Vanguard funds available to invest and investment class when from T1 level to institutional
These is a wealth of knowledge here about vanguard funds using a Boglehead 3 or 4 fund strategy
i would like some advice on the funds :happy
this one non vanguard fund is available too, i see its rated pretty high in morningstar
    • Western Asset Core Plus Bond Fund Class IS (Mutual Fund) WAPSX ER .42
      Vanguard Institutional Index Fund Institutional Shares (Mutual Fund) VINIX ER .04
      Vanguard Equity-Income Fund Admiral Shares (Mutual Fund) VEIRX ER .19
      Vanguard Explorer Fund Admiral Shares (Mutual Fund) VEXRX ER .30
      Vanguard Extended Market Index Fund Institutional Shares (Mutual Fund) VIEIX ER .05
      Vanguard FTSE Social Index Fund Admiral (Mutual Fund) VFTAX ER .14
      Vanguard Small-Cap Value Index Fund Institutional Shares (Mutual Fund) VSIIX ER .06
      Vanguard Total Bond Market Index Fund Institutional Shares (Mutual Fund) VBTIX ER .04
      Vanguard Total International Bond Index Fund Institutional Shares (Mutual Fund) VTIFX ER.07
      Vanguard Wellington™ Fund Admiral™ Shares (Mutual Fund) VWENX ER.16
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Duckie
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Re: tiaa 403b available Vanguard funds advice

Post by Duckie »

Dlogiudice wrote: Wed Jan 12, 2022 7:42 pm i believe i have done pretty well but as i am within a year possible retirement i am concerned about my allocation
What is your allocation? What is your desired AA? What do you currently have in the 403b and in other accounts earmarked for retirement?
i would like some advice on the funds
The best options are:
  • Vanguard Institutional Index VINIX .04 -- Large caps, 80% of US stocks
  • Vanguard Extended Market Index VIEIX .05 -- Mid/small caps, 20% of US stocks
  • Vanguard Total Bond Market Index VBTIX .04 -- US bonds
this one non vanguard fund is available too, i see its rated pretty high in morningstar
Western Asset Core Plus Bond WAPSX .42 is a decent bond fund but is no better than VBTIX at ten times the cost.

Edit: I just looked at your other post. You would get better answers if you combined all your information in one place. Use the Asking Portfolio Questions template to provide the information we need to help you.
Topic Author
Dlogiudice
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Re: tiaa 403b available Vanguard funds advice

Post by Dlogiudice »

does everyone have faith in morningstar review ? i always thought they were pretty good

thanks for reply's i will provide more info
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retired@50
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Re: tiaa 403b available Vanguard funds advice

Post by retired@50 »

Dlogiudice wrote: Wed Jan 12, 2022 9:53 pm does everyone have faith in morningstar review ? i always thought they were pretty good
Speaking of Morningstar reviews (presumably you're referring to the 5 stars for WAPSX) you might be interested in these M* articles that discuss their ratings, and fund expense ratios, and which is more predictive of future good performance.

See links:
https://www.morningstar.com/articles/347327/article
https://www.morningstar.com/articles/75 ... or-failure

TL;DR: The stars don't mean much, and aren't a good predictor for future returns.

Regards,
This is one person's opinion. Nothing more.
crefwatch
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Re: tiaa 403b available Vanguard funds advice

Post by crefwatch »

Your first reply asked, "What is your allocation." To put a finer point on it, it is impossible to make a recommendation about a fixed income fund (i.e. your bold-faced product in which [I think ... ] you state an interest) when we don't know how much of your 27-year accumulation might be in TIAA Traditional. That latter product falls into the Fixed-Income area, even though, unlike a bond mutual fund or VA, it has no danger of loss to principal.

It would also be useful to say what TIAA product your 403(b) is. I mean, RA, SRA, GSRA, RC, RCP. One reason I ask is that there may be small adjustments to the ER's you posted, if you have RC or RCP. It also tells us whether your TIAA Traditional investment has immediate liquidity. We also need to know if you find an increased yield a sufficient compensation for temporary illiquidity. (After 27 years, the answer should be, you do!)

To put that in another, over-simplified way, who cares what the ER is when one of your Fixed Income choices (might) currently pay 3% with no risk to principal?
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ruralavalon
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Re: tiaa 403b available Vanguard funds advice

Post by ruralavalon »

Dlogiudice wrote: Wed Jan 12, 2022 9:53 pm does everyone have faith in morningstar review ? i always thought they were pretty good

thanks for reply's i will provide more info
Your employer's plan offers two good bond funds.
1) Vanguard Total Bond Market Index Fund Institutional Shares (VBTIX) ER 0.04%; and
2) Western Asset Core Plus Bond Fund Class IS (WAPSX) ER 0.42%.

Both are highly rated by Morningstar. Morningstar (6/17/2021), The Best Taxable-Bond Funds. Both are Gold Medalists per Morningstar.


They are different types of bond funds, with different chatactetistics. Vanguard Total Bond Market is a core bond fund with higher credit quality (AA), more government bonds and lower risk. Western Asset is a core plus bond fund, with lower credit quality (BBB) (still investment-grade), more corporate bonds and higher risk.

So Vanguard Total Bond Market has had lower returns with lower volatility, and a negative correlation to the U.S. stock market (- 0.06%). Western Asset Core Plus has had a higher return, higher volatility and a higher correlation to the U.S.stock market (-0.41%). Portfolio Visualizer, 3002-2021.

In my opinion the primary purpose of a bond allocation is to reduce portfolio volztilit. Between the two Vanguard Total Bond has done a better job providing diversification. Between the two I suggest using Vanguard Total Bond Market Index Fund Institutional Shares (VBTIX) ER .04%.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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