Help verifying my Six Fund Portfolio for my 401K (moving away from an expensive Target Date Fund)

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
ddzz
Posts: 3
Joined: Fri Dec 21, 2018 11:11 pm

Help verifying my Six Fund Portfolio for my 401K (moving away from an expensive Target Date Fund)

Post by ddzz »

Hello Bogleheads,

At my new company, in our 401K account the investment choices are limited. Currently I default to an expensive a 2050 target date fund with an expense ratio of 0.46%. I like the diversity the fund offers but I am trying to cut down on the expenses. Inspired from the "Three Fund Portfolio" page, below is my take on creating something similar. Can you please comment on it, if I am missing something?

I am an avid reader on this forum, and much appreciate all the knowledge sharing, learned a lot ! :)

https://docs.google.com/spreadsheets/d/ ... l&tq&gid=0
lakpr
Posts: 5950
Joined: Fri Mar 18, 2011 9:59 am

Re: Help verifying my Six Fund Portfolio for my 401K (moving away from an expensive Target Date Fund)

Post by lakpr »

You can safely omit FSSNX (Fidelity Small cap index), as it is already contained in the Fidelity Extended Market Index fund. A 4:1 ratio of investments in S&P 500 index and Extended Market index funds will approximate the Total Stock Market index by market cap.

Similarly you can also omit the emerging markets fund. Emerging markets make up only 15% of international equities by market cap. With a 27% allocation to international equities in the target date fund that you are trying to replicate, that is essentially a 4% allocation. Investing such a tiny portion isn't going to make any difference to your overall portfolio. For the sake of simplicity I suggest you skip it.

So the final funds you want are
FXAIX : 52% or 50% (if you want rounded to nearest 5%)
FSMAX: 13% or 15%
FSPSX: 25%
FXNAX: 10%
Topic Author
ddzz
Posts: 3
Joined: Fri Dec 21, 2018 11:11 pm

Re: Help verifying my Six Fund Portfolio for my 401K (moving away from an expensive Target Date Fund)

Post by ddzz »

Yeah ! Thanks
Post Reply