401k options changed

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Topic Author
kjsammy
Posts: 154
Joined: Thu Feb 18, 2016 11:19 am
Location: Massachusetts

401k options changed

Post by kjsammy »

Hello,
My 401k and IRA were all Vanguard funds: total stock Index, total Intl index, total or Intermediate Bond. Recently the 401k options were changed, the vanguard funds were replaced by BlackRock funds.
My 401k funds (*) are now BlackRock Russell 3000 Index Fund F, BlackRock MSCI ACWI ex-US IMI Index Fund F and BlackRock US Debt Income Fund F. Years ago there was a stable value fund option but that does not exist now. If it did exist I would have moved the bond funds to the stable value.
Should I move the BR Debt Income Fund to Wellington? Any advice or thoughts? Below are the choices in the 401k now (omitting target date funds).
Thank you for your time.

BROAD ASSET CLASS FUNDS

DIVERSIFIED STOCK FD
* BR RUSSELL 3000 INDEX
BR MID CAP EQUITY INDEX
* BR MSCI ACWI EX-US INDX
BOND ORIENTED BAL FD

* BR US DEBT INDEX
VG TL INTL BD IDX IS (VTIFX)

SPECIALTY ASSET CLASS FUNDS

DODGE & COX STOCK (DODGX)
FID GROWTH CO POOL
BR RUSSELL 1000 GROWTH
BR RUSSELL 1000 VALUE
TRP LARGE-CAP GRTH I (TRLGX)
VANG FTSE SOC IDX IS (VFTNX)
GWK SMALL/MID CAP
US RE INDEX BR FTSE EPRA.
RUSSELL 2000 INDEX
DFA EMRG MKT CORE EQ (DFCEX)
DODGE & COX INTL STK (DODFX)
BR EMERGING MKTS INDEX
AEW GLB PROP TR
PRU CORE PL BD CL 5
VANG INFL PROT INST (VIPIX)
VANG ST BOND IDX IS (VBITX)
Wellingtion Trust HIGH YIELD

VANG CR FED MM ADM (VMRXX)
Last edited by kjsammy on Thu Jun 24, 2021 8:41 am, edited 1 time in total.
livesoft
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Re: 401k options changed

Post by livesoft »

When a 401(k) plan changes fund line-up the custodian typically maps the previous fund line-up on to the new fund line-up, so that participants do not have to change a thing.

I suspect you don't need to change a thing if you were satisfied with what you had.

But your post has a lot of fluff (all those past returns which are quite distracting) and does not follow the "Asking Portfolio Questions" outline.
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exodusNH
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Re: 401k options changed

Post by exodusNH »

kjsammy wrote: Thu Jun 24, 2021 8:07 am Hello,
My 401k and IRA were all Vanguard funds: total stock Index, total Intl index, total or Intermediate Bond. Recently the 401k options were changed, the vanguard funds were replaced by BlackRock funds.
My 401k funds (*) are now BlackRock Russell 3000 Index Fund F, BlackRock MSCI ACWI ex-US IMI Index Fund F and BlackRock US Debt Income Fund F. Years ago there was a stable value fund option but that does not exist now. If it did exist I would have moved the bond funds to the stable value.
Should I move the BR Debt Income Fund to Wellington? Any advice or thoughts? Below are the choices in the 401k now (omitting target date funds).
Thank you for your time.

* BR RUSSELL 3000 INDEX .011
* BR MSCI ACWI EX-US INDX .055
* BR US DEBT INDEX .025
These are basically the same as what you had, with lower fees.

"High yield" bonds are what everyone used to call "junk bonds". You should not consider them a core bond holding.

Depending on what target date funds you have, those may also be viable and less anxiety inducing.
Topic Author
kjsammy
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Joined: Thu Feb 18, 2016 11:19 am
Location: Massachusetts

Re: 401k options changed

Post by kjsammy »

Thanks for the reply re Wellington High Yield, edited OP to improve I hope.
Yes, there will be a time that I move to a life strategy or target date fund.
Sure, I was happy with the total bond. If there was a stable value fund now I would make that move at this time.
Kj
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retiredjg
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Re: 401k options changed

Post by retiredjg »

What you have now is essentially had before. Why are you considering a change to Wellington?
Topic Author
kjsammy
Posts: 154
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Location: Massachusetts

Re: 401k options changed

Post by kjsammy »

retiredjg wrote: Thu Jun 24, 2021 8:56 am What you have now is essentially had before. Why are you considering a change to Wellington?
Yes, what I have now is what I had before. Wellington was listed as a bond asset class. Many many people love their Wellington fund. Since I do not have a stable value fund to shift to I thought that might be an option. That is all. Thank you.
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retiredjg
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Re: 401k options changed

Post by retiredjg »

Wellington Trust High Yield may be a bond fund (probably junk bonds) but it is not the Wellington Fund that people love. The Wellington fund that people love is about 66% stocks/33% bonds and it is a Vanguard product.

The one you have in your 401k appears to just be a bond fund offered by a company named Wellington Trust.
exodusNH
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Re: 401k options changed

Post by exodusNH »

kjsammy wrote: Thu Jun 24, 2021 8:47 am Thanks for the reply re Wellington High Yield, edited OP to improve I hope.
Yes, there will be a time that I move to a life strategy or target date fund.
Sure, I was happy with the total bond. If there was a stable value fund now I would make that move at this time.
Kj
Much easier to read, though you should have left the ER's, since those can vary by plan. (There are both different share classes with different expenses as well as ways a 401k plan can bury its annual fees into the ER of the funds.)

As long as the bond fund has a duration that roughly matches your timeline, you will eventually reap the higher yields. The stable value fund will, over the long term, underperform as it's an insurance product, not a true investment. The insurance company has to guarantee the returns and cover its costs.

Bonds are to give a floor to your portfolio, not for growth. The fact that bonds have done well recently is a bit unusual, from my understanding.

It's a disservice that 401k plans group high yield bonds into the bond section of their listings. They are not the same asset class and aren't appropriate for the average person. It's also unfortunate that they bury them with language like "high yield" and "below investment grade" instead of calling them "junk bonds."
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Kenkat
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Re: 401k options changed

Post by Kenkat »

There is the (original) Vanguard Wellington fund, managed by Wellington Management Company in partnership with Vanguard. That fund typically holds about 60% stocks and 40% longer term bonds (as retiredjg stated above).

This sounds like a different fund managed by the same company that focuses on High Yield / Junk bonds.
Topic Author
kjsammy
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Joined: Thu Feb 18, 2016 11:19 am
Location: Massachusetts

Re: 401k options changed

Post by kjsammy »

Thank you all for the information about the Wellington fund vs the high yield fund and that the stable value fund is really an insurance product.
I will just leave things as they are.
kj
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ruralavalon
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Re: 401k options changed

Post by ruralavalon »

I suggest staying with:
BR RUSSELL 3000 INDEX .011
BR MSCI ACWI EX-US INDX .055
BR US DEBT INDEX .025
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