Approximating Total Stock Market in my 401K

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DoronD
Posts: 13
Joined: Wed Jul 14, 2021 2:48 pm

Approximating Total Stock Market in my 401K

Post by DoronD »

Hey all,

I'd like to approximate the Total Stock Market Index Fund in my 401K. I have read the article on "Approximating total stock market fund" but when I google the two index fund names, nothing comes up. As I'm still green to life as a Boglehead, I'd love your help:

Here are the two US stock index funds offered:

BlackRock Large Cap US Equity Index NL Fund F (I believe this follows the S&P 500?)

BlackRock Russell 2500 Index NL F (I believe this is the iShares Russel 2500?)



Side question: BlackRock US Debt Index NL W is available. I don't plan on getting into bonds right now (I'm 28 years old). Just want to confirm this is close to the Total Bond Market index fund?



Thanks!
Adam Mundorf
Posts: 25
Joined: Fri Oct 30, 2020 2:57 am

Re: Approximating Total Stock Market in my 401K

Post by Adam Mundorf »

DoronD wrote: Wed Jul 21, 2021 5:05 pm Hey all,

I'd like to approximate the Total Stock Market Index Fund in my 401K. I have read the article on "Approximating total stock market fund" but when I google the two index fund names, nothing comes up. As I'm still green to life as a Boglehead, I'd love your help:

Here are the two US stock index funds offered:

BlackRock Large Cap US Equity Index NL Fund F (I believe this follows the S&P 500?)

BlackRock Russell 2500 Index NL F (I believe this is the iShares Russel 2500?)



Side question: BlackRock US Debt Index NL W is available. I don't plan on getting into bonds right now (I'm 28 years old). Just want to confirm this is close to the Total Bond Market index fund?



Thanks!
I would just stick with the S&P 500 fund. It will track almost identically to the total market and you will have peace of mind not having to rebalance.

The BlackRock US Debt Index NL W does look similar to the Total Bond Market.
IRouteIP
Posts: 53
Joined: Mon Aug 31, 2020 7:51 pm

Re: Approximating Total Stock Market in my 401K

Post by IRouteIP »

Here's a link to the wiki page:

https://www.bogleheads.org/wiki/Approxi ... ock_market

I just posted a related question over in the Theory, News, and General forum.
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oldcomputerguy
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Re: Approximating Total Stock Market in my 401K

Post by oldcomputerguy »

The funds you list are not mutual funds, they are investment trusts. From a 401k perspective, they can be considered to be very similar to mutual funds, the main differences being in the regulatory requirements plus the lack of dividend payouts (dividend reinvestment shows up directly as an increase in the fund NAV). I wasn't able to determine the exact benchmark for the Large Cap fund, but it appears to be an S&P 500 fund. Following the recommendations in the wiki article cited by IRouteIP using the Large Cap fund as the S&P500 component and the Russell 2500 fund as the "extended market" component should get you close enough.

As for the Debt fund, yes, that fund benchmarks against the Barclays Aggregate Bond index, so it's very similar to Vanguard's and Fidelity's Total Bond offerings. As it happens, my wife had that very same fund in her 401k before she retired, and we had no problems with using it for her bond allocation.

ETA: your 401k provider should be required to provide you with some fund information, probably a fund "information sheet" in lieu of a prospectus. You should look at those and determine what benchmarks these funds follow.
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anon_investor
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Re: Approximating Total Stock Market in my 401K

Post by anon_investor »

DoronD wrote: Wed Jul 21, 2021 5:05 pm Hey all,

I'd like to approximate the Total Stock Market Index Fund in my 401K. I have read the article on "Approximating total stock market fund" but when I google the two index fund names, nothing comes up. As I'm still green to life as a Boglehead, I'd love your help:

Here are the two US stock index funds offered:

BlackRock Large Cap US Equity Index NL Fund F (I believe this follows the S&P 500?)

BlackRock Russell 2500 Index NL F (I believe this is the iShares Russel 2500?)



Side question: BlackRock US Debt Index NL W is available. I don't plan on getting into bonds right now (I'm 28 years old). Just want to confirm this is close to the Total Bond Market index fund?



Thanks!
I have similar funds just do 80% S&P500 and 20% Russel 2500.
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