Does this make sense?

[Anonymous]

In my fidelity 401k, the target date fund is 60/40 us/international. My preference is 80/20. There is an s&p 500 and an international mutual fund, but the standalone international fund has a significantly higher expense ratio than the target date fund. It’s 0.03% vs 0.45%.

So to get international exposure I’m just doing 50/50 s&p 500 and target date 2065.

This will have the intended effect right?

[Anonymous]

Basically, though the 2065 fund also has some bonds, so you won't get the exact splits you mention. Also, if you keep it in those two funds, over the years the share of your total assets held in bonds will be roughly half of what Fidelity would do if you had it all in a target date fund.

[Anonymous]

Anonymous wrote:Basically, though the 2065 fund also has some bonds, so you won't get the exact splits you mention. Also, if you keep it in those two funds, over the years the share of your total assets held in bonds will be roughly half of what Fidelity would do if you had it all in a target date fund.

Yeah I’m trying to minimize bonds for now since I’m 31. I’ll manually change allocation when I’m older

[Anonymous]

Anonymous wrote:In my fidelity 401k, the target date fund is 60/40 us/international. My preference is 80/20. There is an s&p 500 and an international mutual fund, but the standalone international fund has a significantly higher expense ratio than the target date fund. It’s 0.03% vs 0.45%.

So to get international exposure I’m just doing 50/50 s&p 500 and target date 2065.

This will have the intended effect right?

It will have the intended effect this year, but as the us/international grow at different rates it won't rebalance to keep you at a set percentage like the target date would.

[Anonymous]

Anonymous wrote:In my fidelity 401k, the target date fund is 60/40 us/international. My preference is 80/20. There is an s&p 500 and an international mutual fund, but the standalone international fund has a significantly higher expense ratio than the target date fund. It’s 0.03% vs 0.45%.

So to get international exposure I’m just doing 50/50 s&p 500 and target date 2065.

This will have the intended effect right?

Are your expense ratio numbers correct? The standard alone index funds in my Fidelity 401k are .03% and less. The TDF are much higher at .45% and up.

TDF are generally the same as each other with the difference in being the allocation ratio has more towards fixed income as you get closer to retirement. If you don’t like the allocation ratio of your TDF, pick a different one that is more inline with the allocation ratio you want…pay no mind to the year name of the fund. Better yet, do a three fund portfolio of your own with domestic, international and bond funds and pay the much lower gross expense ratios.

[Anonymous]

S&P500 is not considered a diverse investment anymore since they are dominated by the mega corporations at the top.