What the heck is a "comingled pool"??

[jazz4cash]

Its not co-ed swimming.........

Mega-Corp is shaking up our 401k. It is a really good plan that is managed by Fidelity and includes both Fido, proprietary, and other name-brand funds. If there is a fault with this plan, it has TOO MANY options, and of course the match could always be unlimited.

They are streamlining the fund choices and replacing some funds with others, some are being replaced with something called a "comingled pool". We had some of these before in the proprietary fund choices, but only a few. As far as I know, a comingled pool looks like a mutual fund, works like a mutual fund, but it's NOT a mutual fund.............so what is it? Could there be any advantages to Mega-Corp (or me) from lower expenses, less regulation, etc?

 

[Texas Proud]

think proprietary mutual fund... only for the people that are in your comingled group... not a mutual fund that anybody off the street can get into..

 

[Gotadimple]

So, here's my $.03 on commingled pools. I have one in Fido -- but not by choice.

How do you know that the pool is performing as well as any other commercially available fund that has the same objective? My experience with Fido is that the comparative numbers aren't there and Customer Service can't provide them to you.

When asked for Beta -- they don't know. Sharpe's ratio? Hunh Investing objective as compared to Morningstar -- we have our own method.

So if you have lots of other choices in Fido that are also commercially available and perform well, pass on the Commingled fund.

-- Rita

 

[jazz4cash]

Thanks to both of you. Your posts sorta confirm what I already suspected. One of the changes I dont care for is replacing the Fido Freedom Funds with something called Pyramis Active Lifecycle. Pyramis is an institutional retirement services company which is still owned by Fido. Im thinking they will avoid (and pocket) some cost associated with administration and compliance with various SEC requirements to qualify as a mutual fund.....no worries of public peer rankings, either. I don't use that type of investment anyway, but it makes me think their objective is to squeeze the employees.

I am not a big Fido fan, anyway (prefer VG), but they have done well managing the 401K. Mega-corp is maintaining the most critical proprietary funds (stable value and S&P Index clone), so I should be able to dodge remaining potholes by rolling some funds to the Fido IRA.

 

[Delawaredave]

They are streamlining the fund choices and replacing some funds with others, some are being replaced with something called a "comingled pool".

Rumor has it my megacorp is looking at the same. This "comingled pool" seems to me like a pile of money they'll dole out in chunks to a number of private money managers.

I don't like it and don't understand why. I think people think "fewer choices would be a good think" and only by converging on this commingled crap can they get there.

I also don't like the lack of transparency and less information than institutional shares in a public mutual fund.

Would the fees be less ? Is that part of the reason ?

 

[Gotadimple]

Would the fees be less ? Is that part of the reason ?

Oh, probably . . . says she who doubts megacorps do anything that would cost extra.

-- Rita

 

[mickeyd]

some are being replaced with something called a "comingled pool".

Doesn't sound good to me. Ask them (employer) if you can have a copy of the prospectus of this "fund". Check the ER, turnover rate, etc.

It may be a good option for an employee who does not care to dig any deeper than just the surface, but if you have any other options, I'd consider selecting one of them. 8)

 

[2B]

Anytime any financial product is not easily understood you immediately know that it has high fees and/or commissions. It is something to avoid.

Does your plan have index funds? If so, you have all the choices you need.

For us older types, the amount of money we'll put into our 401k before we exit the w*rkforce is trivial. I just started a new plan a little over a year ago and with maximum contributions and company match I don't expect it to get to be 5% of my assets before I'm gone. With this minimal impact, my choices are not very relevant. I'm stuck in a 0.35% fee S&P fund. I think that's criminal to do to the younger folks. I heard from someone that went to the new employee 401k meeting that the person giving it from HR was really defensive about all of the high fee funds. Some are over 2%.

 

[saluki9]

Anytime any financial product is not easily understood you immediately know that it has high fees and/or commissions. It is something to avoid.

Does your plan have index funds? If so, you have all the choices you need.

For us older types, the amount of money we'll put into our 401k before we exit the w*rkforce is trivial. I just started a new plan a little over a year ago and with maximum contributions and company match I don't expect it to get to be 5% of my assets before I'm gone. With this minimal impact, my choices are not very relevant. I'm stuck in a 0.35% fee S&P fund. I think that's criminal to do to the younger folks. I heard from someone that went to the new employee 401k meeting that the person giving it from HR was really defensive about all of the high fee funds. Some are over 2%.

Wow, talk about sounding the alarm for no reason. I no longer have to wonder whether some members here actually do any research before prophesizing. Many of Fido's commingled funds have LOWER expense ratios that comparable funds. The expense savings are for the plan participants not the employer. Heck, their S&P 500 pools have expense ratios of 5BPS.

 

[FinanceDude]

I no longer have to wonder whether some members here actually do any research before prophesizing.

It took you this long to figure that out??

 

[unclemick]

Co-mingling can be fun! Late 80's early 90's - up to 30% Vanguard co- mingled trustee's International - went to AAII New Orlean's chapter meetings drank coffee/ate doughnuts when availible and listened to the guest speaker.

heh heh heh - also had a bunch of Pssst Wellesley - those were the days!

 

[FinanceDude]

Co-mingling can be fun!

I used to "co-mingle" with certain like-minded coeds on college.................

 

[bow-tie]

Wow, talk about sounding the alarm for no reason. I no longer have to wonder whether some members here actually do any research before prophesizing. Many of Fido's commingled funds have LOWER expense ratios that comparable funds. The expense savings are for the plan participants not the employer. Heck, their S&P 500 pools have expense ratios of 5BPS.

My Fido 401k plan at work has a comminged fund, and it's has the cheapest expenses by far. By what I could garner, it's the closest thing the plan has to an S&P 500 index fund. I think they are planning on adding a few more index funds.... should be interesting to see the expenses when they get here.

 

[lswswein]

Commingled funds are used to reduce expenses like filings and marketing costs which come with registered mutual funds.

The megacorp I work for has 5 commingled funds in our 401k. My 401k is with Fido too, but the commingled funds are managed by Mellon Asset mgmt. The funds are Intl, US, Small & Bond along with a Money Mkt like fund. The expense ratios are all below the Index funds and the performance has been very close, with a tiny bit of overperformance(better trading maybe with a value tilt). I have been happy with them, though I should note they do not update the fund info quickly - takes about 2 months before the previous end of quarter information is updated.

-h