Thread: Fund Expenses

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  1. #1
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    Fund Expenses

    Received a letter from 401K showing fund summary for one of the Funds invested in.

    Its a Large company growth fund.

    Fees are as shown:

    Management fees 0.63%
    Other expenses 0.40%
    Fee Waivers 0.03%

    Total Annual expenses 1.00%

    Example of Expenses (per statement)
    1 year $102
    3 years $325
    5 years $566
    10 years $1257


    My question are these fees on the high side? or is that pretty much the norm?

  2. Member
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    #2
    They are not outrageous but they are not the lower end of the scale either. Is it actively managed or is it tied to an index? Check the Fund category and then look at some other similar funds from other companies like Fidelity and Vanguard for the same type of fund to get a gauge. If it is in your 401k you may/or may not have other choices.

  3. Member
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    #3
    Its actually part of the wifes 401K, its through her employer and with a company called Mass Mutual.

    Here is how we currently have it configured.

    Principal equity income fund 5%
    DWS Equity 500 index fund 5%
    Well fargo adv. premier large company growth fund (the one mentioned above) 14%
    Royce Premier fund 25%
    Invesco small cap growth fund 24%
    Harbor international fund 27%

    We are 100% Stock when it comes to her investment class.

    She is 37 so we have many years to work before retirement, thus the reason for 100% stock investments. Would like for her to retire somewhere between 59 and 62 at the latest.

    My thinking was to stay in stocks until 7-8 years before retirement and then begin transitioning to more secure funds.

  4. Banned
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    #4
    Mass Mutual is one of the best respected insurance companies--along with Northwestern Life. The problem is that on 401K's, you don't have any say so in who your employer's doing business with. And most of the time, they'll give you some good and bad funds to choose from--so you don't screw up too bad on choice of funds.

    The 1.00 basis points is a pretty high service charge--in total. On my old 401k's, my employer was paying the charges. When I retired, they require all funds in the 401K's to be withdrawn on an IRA Rollover which means I have to pay the charges. On the other hand, I also can invest in any of Fidelity's products--calling my own shots. I'm paying about .75% charges on my 401K's.

    I've switched over to using ETF's for my new tax paid funds, which are essentially index funds of index funds. The funds are invested in companies automatically, with the fund not having dedicated staffs. The service charges on mine are about .11%--substantially less than the Mutual Funds I own. And many investors are using them now,.

    If you're having to pay the charges, the amount really, really mounts up over a 35-40 year investment history. It can be a small fortune you've left on the table by not paying attention to the portfolio.

    In these days of net zero interest charges on your investments, the only place you have to go is in the stock market funds or ETF's in good quality sectors. When you see some industries faltering (like oil companies and their suppliers) and governments like Puerto Rico, you want to be careful where your bond money goes. I'm still heavily invested in stocks, even though I've been retired 7 years. And 2015 is a 3% increase year--far less than most years.

  5. Member
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    Wisconsin
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    #5
    Your doing good at +3%, I'm at -1.5% YTD, but I have a CFP taking care of mine.

    I looked at all of the mutual funds, plus the index funds that he has me in, and it looks like everyone of them is pretty high when it comes to fee's. I think right after the first of the year I'm going to have a sit down with him and do a little allocation shuffle. Everyone involved in my investments did much better than me.