Advice on Large Cap Value/Growth Funds

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Topic Author
RetireGood
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Joined: Tue Oct 07, 2014 2:02 am

Advice on Large Cap Value/Growth Funds

Post by RetireGood »

Hi

I have below funds at bottom available in my 401K.

1) Do I need to have all these 3 just to capture everything ? or just have 50/50 LC Value/Growth not bother blend (Or)
2) Just have S&P 500 blend ? But still LC-B is so much overlapped with LC-G)

Asking because LC-Growth went through 2 cycles, while LC-V just seemed stable during the same i.e. if I am not in LC-G or didn't rebalance out of LC-G, would have not participated in the gains nor retained the gains.

Also how come 'FID GR' is benchmarking against Russell 3000?.
(My assumption is in those 3000 there might be companies other than Large CAP)

---
Name/Inception Class Plan-specific option 1 Year 3 Year 5 Year 10 Year/LOF* Returns As Of
---
FID GR CO POOL CL 3 12/13/2013 Large Cap Growth Yes 14.48% 14.66% 15.85% 17.04% 05/31/2023
Benchmark: Russell 3000 Growth 9.15% 12.32% 13.09% -- 05/31/2023
--
BTC S&P 500 INDEX 06/30/2022 Large Cap Blend Yes -18.10% N/A N/A -5.76% 12/31/2022
Benchmark: S&P 500 -18.11% 7.66% 9.42% -- 12/31/2022
--
DODGE & COX STOCK I (DODGX) 01/04/1965 Large Cap Value No 1.95% 18.48% 9.52% 11.28% 04/30/2023
Benchmark: S&P 500 2.66% 14.52% 11.45% 12.20% 04/30/2023



Thanks
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Beensabu
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Re: Advice on Large Cap Value/Growth Funds

Post by Beensabu »

What are the expense ratios?

Russell 3000 index is cap weighted. It's a total market index, mostly weighted to large cap.
"The only thing that makes life possible is permanent, intolerable uncertainty; not knowing what comes next." ~Ursula LeGuin
Topic Author
RetireGood
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Re: Advice on Large Cap Value/Growth Funds

Post by RetireGood »

Beensabu wrote: Sat Jun 03, 2023 1:10 am What are the expense ratios?
FID-GR LC-G 0.31
S&P 500 LC-B 0.01
DODGE LC-V 0.51

The changes are being made to:
Streamline fees: Currently, the Dodge & Cox Stock Fund Class I provides investors with a quarterly revenue credit. To deliver the same investment strategy at a simplified fee structure, Dodge & Cox Stock Fund Class I will be replaced with the Dodge & Cox Stock Fund Class X. The Dodge & Cox Stock Fund Class X reduces the expense ratio by 10 basis points and will no longer provide an associated quarterly revenue credit.

Beensabu wrote: Sat Jun 03, 2023 1:10 am Russell 3000 index is cap weighted. It's a total market index, mostly weighted to large cap.
Thanks
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dogagility
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Re: Advice on Large Cap Value/Growth Funds

Post by dogagility »

RetireGood wrote: Sat Jun 03, 2023 1:23 am FID-GR LC-G 0.31
S&P 500 LC-B 0.01
DODGE LC-V 0.51
I vote for SP500. No need to place sector bets and pay more to do so.
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dbr
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Re: Advice on Large Cap Value/Growth Funds

Post by dbr »

Buy the low cost S&P fund and go away from the market. That will be fine.
jimkinny
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Re: Advice on Large Cap Value/Growth Funds

Post by jimkinny »

15-20 years it was fashionable to have LC growth, LC value, SC Growth and SC Value. It is now fashionable to just have a total stock market fund and in lieu of that an SP 500 index blend fund and if desired, a 20% allocation to small cap blend to get the SP 500 a tiny bit closer to the total stock market fund. I would use the sp 500 blend fund.
backpacker61
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Re: Advice on Large Cap Value/Growth Funds

Post by backpacker61 »

I think we may work for the same employer. :wink:

My strategy for LC US in the employer's plan is to just buy the BTC S&P 500 CTF and forget about it. It's difficult to compare them in the table because the 'Return as of' dates are so wildly different, and the S&P 500 CTF tracking data isn't available for past 3 yr and 5 yr columns.

So the table is comparing apples and bananas. :oops:
“Now shall I walk or shall I ride? | 'Ride,' Pleasure said; | 'Walk,' Joy replied.” | | ― W.H. Davies
secondopinion
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Re: Advice on Large Cap Value/Growth Funds

Post by secondopinion »

Certainly do not pay for both value and growth funds at the same time. Buy the S&P 500 mostly, and buy a tad of the value fund if it would make you feel better. Of course, how much are you willing to pay in fees just to feel better?
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Beensabu
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Re: Advice on Large Cap Value/Growth Funds

Post by Beensabu »

RetireGood wrote: Sat Jun 03, 2023 1:23 am S&P 500 LC-B 0.01
Can't beat that.

If you really want a bit more value: with 90% S&P 500 and 10% the D&C fund, your overall expense ratio would be 0.06%.
"The only thing that makes life possible is permanent, intolerable uncertainty; not knowing what comes next." ~Ursula LeGuin
Topic Author
RetireGood
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Re: Advice on Large Cap Value/Growth Funds

Post by RetireGood »

Thanks everyone for the replies.

I will stick to S&p500 only.
investment guy
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Re: Advice on Large Cap Value/Growth Funds

Post by investment guy »

Humm. OP's question has really got me thinking. Am I holding my S&P 500 funds incorrectly?

I hold large blend (VINIX - Vanguard Institutional Index Fund), large growth (VIGIX - Vanguard Growth Index Fund) and large value (VIVIX) Vanguard Value Index Fund) as follows, all 3 funds very low cost expense ratio.

VINIX - $300K (blend)
VIGIX - $170K (growth)
VIVIX - $150K (value)

Is it ok to do this or pointless or a good idea (as opposed to just holding all of the $ in blend?!). Please provide guidance. I continue to increase holdings in all three of the funds listed above. Should I and if so, why and if not, why not please?

Secondary question on the S&P 500 funds listed above: Am I tilted toward value or growth or blend and to what degree? I really appreciate your insight on this please as I am confused about this subject.

I should note that the above funds are complimented with a low fee international fund (VTSNX - Vanguard Total International Stock Index Fund, $120K) and Bonds (DOXIX - Dodge & Cox Income Fund, $380K as well as an emergency fund.

Thanks!
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grabiner
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Re: Advice on Large Cap Value/Growth Funds

Post by grabiner »

investment guy wrote: Sat Jun 03, 2023 10:54 pm Humm. OP's question has really got me thinking. Am I holding my S&P 500 funds incorrectly?

I hold large blend (VINIX - Vanguard Institutional Index Fund), large growth (VIGIX - Vanguard Growth Index Fund) and large value (VIVIX) Vanguard Value Index Fund) as follows, all 3 funds very low cost expense ratio.

VINIX - $300K (blend)
VIGIX - $170K (growth)
VIVIX - $150K (value)

Is it ok to do this or pointless or a good idea (as opposed to just holding all of the $ in blend?!).
It's pointless to do this, as it's an extra complication. Holding equal amounts of Vanguard Growth Index and Vanguard Value Index is identical to holding the combined amount in Vanguard Large-Cap Index. And the Large-Cap Index (CRSP's index), while not identical to the Institutional Index (S&P 500), tracks essentially the same market segment.
Secondary question on the S&P 500 funds listed above: Am I tilted toward value or growth or blend and to what degree? I really appreciate your insight on this please as I am confused about this subject.
You have a tiny growth tilt since you have more in the growth index than the value index (presumably because growth outperformed value since your last rebalance).

More significant is that you are underweighting small-caps. If you want to hold the total US market, holding 80% in Institutional Index and 20% in Vanguard Extended Market Index (or, if not available, in a small-cap index) is a good approximation.
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investment guy
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Re: Advice on Large Cap Value/Growth Funds

Post by investment guy »

Grabiner - Thank you for your post (S&P 500 BLEND). Now I need to figure out if I want to sell the growth and value fund and place the $ in Blend. Not sure if I should do that or let it ride (this is all in my 401K so no tax ramifications).

Anybody have any advice on if I should sell the growth and value funds and place it in my 401K Blend (VINIX)?

Thanks.
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dogagility
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Re: Advice on Large Cap Value/Growth Funds

Post by dogagility »

investment guy wrote: Mon Jun 05, 2023 8:40 pm Anybody have any advice on if I should sell the growth and value funds and place it in my 401K Blend (VINIX)?
I advise you to invest in a total stock market index fund, if available. If one is not available, then an SP500 fund like VINIX is a perfectly acceptable alternative.

Simplicity is a virtue. No need to keep track of multiple funds and tinker with your portfolio allocation among a large number of funds.
Make sure you check out my list of certifications. The list is short, and there aren't any. - Eric 0. from SMA
sycamore
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Re: Advice on Large Cap Value/Growth Funds

Post by sycamore »

investment guy wrote: Mon Jun 05, 2023 8:40 pm Grabiner - Thank you for your post (S&P 500 BLEND). Now I need to figure out if I want to sell the growth and value fund and place the $ in Blend. Not sure if I should do that or let it ride (this is all in my 401K so no tax ramifications).

Anybody have any advice on if I should sell the growth and value funds and place it in my 401K Blend (VINIX)?

Thanks.
A backtest can provides some perspective. For example, comparing your current portfolio against 100% VINIX or half & half VIGIX and VIVIX shows very little difference over the last 20 years. You can tweak the backtest to try different rebalancing options, different timeframes, and/or different contribution amounts, but you'll see very similar performance. That's because there's so much overlap between the funds.

I agree with dogagility's preference to use a total stock market index fund if it's available, otherwise VINIX is a great option.

(There are various caveats with backtesting. One is that VIGIX and VIVIX changed their indexes during that time period, but they were still large cap focused. So the main point stands - your combination of three funds has lots of duplication.)
investment guy
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Re: Advice on Large Cap Value/Growth Funds

Post by investment guy »

Thanks for the advice. Thanks as well for the backtest as it really drives home the point that an S&P 500 Blend Fund will perform well, with no need per se to additionally own separate large Growth and large Value Funds.
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