401k changing to new options

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pollifax
Posts: 2
Joined: Tue Sep 12, 2017 4:05 pm

401k changing to new options

Post by pollifax » Tue Sep 12, 2017 4:21 pm

Hello:

This is my first post after lurking for a long while.

I have a question about some new options that have come available in my 401k.

First, the only index fund that was available prior to today in our employer plan was the Vanguard S&P 500 fund VFIAX (ER .04). I have my funds invested in that, as well as the following:

Principal Midcap Growth PCBIX (ER .68)
Fidelity Advisor Bond Fund FEPIX (ER .5)

My equity/bond ratio is approximately 60/40. There is no index fund for either total stock market or international available.

As of today, a few more index funds have been added to the plan, as follows:

Fidelity Midcap Fund FSCKX (ER .05)
Schwab Smallcap Fund SWSSX (ER .05)
Fidelity US Bond Fund (FSITX ER .04)

I would like to switch the FEPIX to the FSITX and then distribute the amount in PCBIX between FSCKX and SWSSX. I will be using the Morningstar x-ray tool to make sure all the amounts reasonably approximate the total market for the equities side.

However, I have a question before I sell the PCBIX. There are no dividends paid out on this fund until December. However, at least for the FSCKX, dividends are paid twice per year -- in June and then again in December. Is there any reason why I should wait to sell the PCBIX until after receiving the dividends in December? The TTM Yield for PCBIX is .34, while the TTM Yields for both FSCKX and SWSSX appear to be higher than 1%, if that makes a difference.

retiredjg
Posts: 30078
Joined: Thu Jan 10, 2008 12:56 pm

Re: 401k changing to new options

Post by retiredjg » Tue Sep 12, 2017 4:50 pm

I'd just change it now. Getting the dividend (if that even happens inside a 401k?) does not change the value of what you have. You just have more shares at a lower cost (for the same value as before the dividend).

Nice new choices you have. Everyone should be so fortunate. :happy

pollifax
Posts: 2
Joined: Tue Sep 12, 2017 4:05 pm

Re: 401k changing to new options

Post by pollifax » Tue Sep 12, 2017 6:35 pm

Thank you! Yes, I'm happy with the new choices.

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