Three-Fund Portfolio with TIAA

[lots_to_learn]

I just started a new job, and the provided retirement account is through TIAA. I have a Roth IRA and use the three-fund portfolio there (VTSAX, VTIAX, VBTLX), but I do not have unlimited Vanguard options within TIAA. The good news is that both VTIAX and VBTLX are available, but I am left picking between the following Vanguard funds to approximate VTSAX:

-Vanguard Institutional Index Fund Institutional [VINIX]
-Vanguard Federal Money Market Fund Investor [VMFXX]
-Vanguard Mid-Cap Index Fund Admiral [VIMAX]
-Vanguard Small-Cap Index Fund Admiral [VSMAX]
-Vanguard Inflation Protected Securities Fund Admiral [VAIPX]

Any advice on how I should go about approximating VTSAX within TIAA?

[student]

I believe VINIX is S&P 500. You may find this thread useful. viewtopic.php?t=332420

[StudentT]

Do you have TISPX (an S&P 500 index fund, https://www.nuveen.com/en-us/mutual-fun ... reclass=R6, 0.05% ER) or TIEIX (a domestic total market index fund, https://www.nuveen.com/en-us/mutual-fun ... reclass=R6, 0.05% ER)? I used to have TIEIX available and used that. It is no longer an option at my university but TISPX is so I use that. (There are threads on showing that S&P 500 and total market are very similar.)

I use TCIEX (an international index fund, https://www.nuveen.com/en-us/mutual-fun ... reclass=R6, 0.05% ER) and TBIIX (a domestic bond fund, https://www.nuveen.com/en-us/mutual-fun ... reclass=R6, 0.07% ER) to create a 3-fund portfolio.

StudentT

[Katietsu]

VINIX is your large cap US fund. You can add just VSMAX or add both VSMAX and VIMAX if you want to get closer to the actual total stock market fund. The wiki will give you the percentages. When I started, I used 82% VINIX and 18% VSMAX but that was some time ago.

[folkher0]

Just use VINIX for your US stock allocation. Don't worry about the mid and small cap funds unless you decide you want to overweight them for some reason. VINIX functions like VTSAX with almost identical returns. Very low ER at 0.03.

[steve r]

What bond allocation are you thinking?
If 40 percent, which is high for younger workers, you may want to consider social choice. The expense ratio at my job is .06.

Social choice funds work by either loaded up on some things, or sort of mostly matching a market portfolio, but excludes a few stocks. SC does the later. I like the approach, but some social choice purest probably do not.
You will get a little more or less than what a similar all index fund approach with similar assets would do, but impossible to predict outperformance. It holds 40 percent U.S. stock, 20 percent international stock, and 40 percent bonds. It very much is set it and forget it. But again, I do not think this is ideal for younger workers.

[bonesly]

I am left picking between the following Vanguard funds to approximate VTSAX:

Just use VINIX for your US stock allocation. Don't worry about the mid and small cap funds unless you decide you want to overweight them for some reason. VINIX functions like VTSAX with almost identical returns. Very low ER at 0.03.

+1 for this...

S&P-500 [VINIX] and Total US Stock Market (TSM) [VTSAX] have near identical performance since TSM is about 85% comprised of S&P-500 and only 15% mid/small caps.

Performance


Composition
VTI is the ETF version of VTSAX


Approximating VTI with 86% S&P-500 + 1% Mid + 12% Small


Anything under 10% doesn't make an appreciable impact on your overall performance, so omitting mid-caps and just going 85% S&P-500 [VINIX] and 15% Van Small-Cap [VSMAX] is going to match "close enough," and I'd still argue that S&P-500 alone will match performance with one less holding (which is simpler).

"Simplicity is the master key to financial success." -- John C. Bogle