Feedback on PEOPX (BNY Mellon Index Fund)

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Topic Author
TeacherLearns2Invest
Posts: 18
Joined: Fri Jul 05, 2019 9:10 pm

Feedback on PEOPX (BNY Mellon Index Fund)

Post by TeacherLearns2Invest »

Hello friends,

Seeking input re: BNY Mellon funds such as:

1. BNY Mellon S&P 500 Index Fund (PEOPX)
Expense Ratio 0.5%

2. BNY Mellon MidCap Index Inv (PESPX)
Expense Ratio 0.51%

3. BNY Mellon Small Cap Stock Index Inv (DISSX)
Expense Ratio 0.50%

4. BNY Mellon MidCap Index Inv (PESPX)
Expense Ratio 0.51%

These are the only funds with lower expense ratios I have access to in a 457 Corebridge account.
Right now, I'm signed up for a T. Rowe Price target date fund with expense ratio of 0.84% :!: and looking to lower that fee.
These BNY Mellon funds are my only options.

SEEKING ANY AND ALL INSIGHTS, QUESTIONS, FEEDBACK TO HELP ME THINK THROUGH MAKING A POTENTIAL SWITCH.


Thank you very much,
TeacherLearns2Invest
lakpr
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Joined: Fri Mar 18, 2011 9:59 am

Re: Feedback on PEOPX (BNY Mellon Index Fund)

Post by lakpr »

Put it all on this index fund:

1. BNY Mellon S&P 500 Index Fund (PEOPX)
Expense Ratio 0.5%


You can omit the Small-Cap or Mid-Cap index funds, historically they have made very little difference to the eventual returns. I therefore view them as optional.

If you need bonds or international equities in your portfolio to match your asset allocation, try to buy them in your taxable account or Roth IRA instead.

Consider buying Series-I Savings Bonds from Treasury Direct. They can be bought only in taxable account (not an IRA or 401k/403b), but if you are maxing out the 401k ($23k), Roth IRA ($7k) and I-bond cap every year ($10k), the I-bonds can constitute 25% of your portfolio. Unless your asset allocation calls for more than 25% to fixed income, I-bonds on their own should be able to meet your fixed income needs. Unlike a bond fund, the interest on I-bonds is tax-deferred up to 30 years, at which time you are very likely to be retired (or wanting to retire).
Topic Author
TeacherLearns2Invest
Posts: 18
Joined: Fri Jul 05, 2019 9:10 pm

Re: Feedback on PEOPX (BNY Mellon Index Fund)

Post by TeacherLearns2Invest »

@lakpr thank you for your suggestion to move forward with PEOPX.
I've been searching around and not much out there in terms of reviews for this BNY Mellon index fund --- as opposed to Vanguard and Fidelity index funds.

I haven't heard of I-Bonds so will definitely look into that next after getting this switch settled.

With appreciation,
TeacherLearns2Invest
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retired@50
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Location: Living in the U.S.A.

Re: Feedback on PEOPX (BNY Mellon Index Fund)

Post by retired@50 »

TeacherLearns2Invest wrote: Tue Apr 02, 2024 9:13 pm ... I've been searching around and not much out there in terms of reviews for this BNY Mellon index fund --- as opposed to Vanguard and Fidelity index funds.
There isn't much to say about PEOPX except that it's done about what one would expect...

It lags Vanguard's 500 Index fund by about the difference in expense ratios. 0.50% to 0.04% is 46 basis points (using current expense ratios) and the long term compound annual growth rate (CAGR) of PEOPX is 45 basis points lower than the Vanguard fund VFINX.

See PV link for details: https://www.portfoliovisualizer.com/bac ... FW64RCzsbR

The PV link above is a visual representation of "the cost matters hypothesis" of Jack Bogle.


Regards,
"All of us would be better investors if we just made fewer decisions." - Daniel Kahneman
the_wiki
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Re: Feedback on PEOPX (BNY Mellon Index Fund)

Post by the_wiki »

It's just an S&P500 fund, so it will do about the same as any other S&P500 fund. They all have the exact same holdings. As was said earlier, it has a fee that is quite a bit higher than many other S&P500 funds, so you will lag by about half a percent annually compare to something like Fidelity 500 fund.

Some employers pass the cost of running a retirement plan on to the employees by using funds with higher fees. Hopefully they are using that savings to give you a half a percent annually of better total compensation elsewhere to make up for it.
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Raspberry-503
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Re: Feedback on PEOPX (BNY Mellon Index Fund)

Post by Raspberry-503 »

I used to own PEOPX but 2018-2020 saw huge capital gain distributions (over 10% from memory) and was killing me in the taxes and I had to get out of it and took advantage of the depressed market to sell and buy VTI at Fidelity instead. Much happier. Since it's a passive index fund, I think the capital gains were due to the fund having to sell shares to pay people selling the fund?
If your account is tax-advantaged it's not an issue for you. At .5% the ER is still 15+ times higher than VOO for example.
the_wiki
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Re: Feedback on PEOPX (BNY Mellon Index Fund)

Post by the_wiki »

Raspberry-503 wrote: Wed Apr 03, 2024 10:59 am At .5% the ER is still 15+ times higher than VOO for example.
Not much you can do about that when it's in a retirement plan at work. It is still probably the best option they have, and the tax benefits of 457 still outweigh the costs.
Topic Author
TeacherLearns2Invest
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Joined: Fri Jul 05, 2019 9:10 pm

Re: Feedback on PEOPX (BNY Mellon Index Fund)

Post by TeacherLearns2Invest »

retired@50 wrote: Wed Apr 03, 2024 9:18 am
TeacherLearns2Invest wrote: Tue Apr 02, 2024 9:13 pm ... I've been searching around and not much out there in terms of reviews for this BNY Mellon index fund --- as opposed to Vanguard and Fidelity index funds.
It lags Vanguard's 500 Index fund by about the difference in expense ratios. 0.50% to 0.04% is 46 basis points (using current expense ratios) and the long term compound annual growth rate (CAGR) of PEOPX is 45 basis points lower than the Vanguard fund VFINX.
Pointing out the HIGH expense ratio (even when this is the lowest one I have available) is a good reality check. This BNY Mellon index fund is "better" than what I have now, but still so much higher than other options. At this point, I don't have access to Vanguard funds in this 457. Lesson for me: stay vigilant about these expense ratios.
Topic Author
TeacherLearns2Invest
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Joined: Fri Jul 05, 2019 9:10 pm

Re: Feedback on PEOPX (BNY Mellon Index Fund)

Post by TeacherLearns2Invest »

the_wiki wrote: Wed Apr 03, 2024 11:18 am
Raspberry-503 wrote: Wed Apr 03, 2024 10:59 am At .5% the ER is still 15+ times higher than VOO for example.
Not much you can do about that when it's in a retirement plan at work. It is still probably the best option they have, and the tax benefits of 457 still outweigh the costs.
Thanks for the feedback, @Raspberry-503 and @the_wiki.
This BNY Mellon index fund is the only fund I have available in the 0.50% expense ratio range.

Given the HIGH expense ratio, I'm asking myself --- should I even invest?
The tax benefits is what's keeping me in the game and doing my best to find the "lower" ERs.

I also have access to Schwab PCRA but it's been complicated to figure out what funds I have access to through this Corebridge 457.
the_wiki
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Re: Feedback on PEOPX (BNY Mellon Index Fund)

Post by the_wiki »

TeacherLearns2Invest wrote: Wed Apr 03, 2024 3:06 pm
the_wiki wrote: Wed Apr 03, 2024 11:18 am
Raspberry-503 wrote: Wed Apr 03, 2024 10:59 am At .5% the ER is still 15+ times higher than VOO for example.
Not much you can do about that when it's in a retirement plan at work. It is still probably the best option they have, and the tax benefits of 457 still outweigh the costs.
Thanks for the feedback, @Raspberry-503 and @the_wiki.
This BNY Mellon index fund is the only fund I have available in the 0.50% expense ratio range.

Given the HIGH expense ratio, I'm asking myself --- should I even invest?
The tax benefits is what's keeping me in the game and doing my best to find the "lower" ERs.

I also have access to Schwab PCRA but it's been complicated to figure out what funds I have access to through this Corebridge 457.
Yes you should definitely invest. 0.5% fee still comes out way ahead when taking into consideration all the taxes you will pay if you invest outside of retirement plans. Do you get an employer match? That's another way you typically still come out ahead even with higher fees.

If you have access to a PCRA you could definitely consider that. I have used one of those, and basically you just transfer money from your 457 over to a special account at Schwab. Then you can buy pretty much any fund at Schwab. Schwab has very low cost options like a S&P500 fund SWPPX with a 0.02% fee or a Schwab Target date fund with a 0.12% fee. And you can typically buy any ETF, so you could buy VTI or VOO or VT. You do want to compare the PCRA fee. For example, mine was $48 per year for PCRA. So if I am saving 0.48% on fees, I would divide 48 by .0048 and get $10000 to break even. So above $10k invested it would make more sense to pay Schwab $48 a year vs PEOPX 0.5%.
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retired@50
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Re: Feedback on PEOPX (BNY Mellon Index Fund)

Post by retired@50 »

the_wiki wrote: Wed Apr 03, 2024 3:35 pm
TeacherLearns2Invest wrote: Wed Apr 03, 2024 3:06 pm
Given the HIGH expense ratio, I'm asking myself --- should I even invest?
Yes you should definitely invest.
+1
While a .50% ER for an index fund is high, it's still worth it to invest.

Regards,
"All of us would be better investors if we just made fewer decisions." - Daniel Kahneman
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