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401k Investment Option
Old 09-21-2005, 10:05 AM   #1
Confused about dryer sheets
Join Date: Jul 2005
Posts: 3
401k Investment Option

My 401k plan (managed by Fidelity) offers a passively managed option that I am considering for the equity allocation (70% more or less) of my retirement funds. FWIW I am probably a year or 2 away from actually retiring.

The "fund" is described as a collective investment trust. The fund invests in Comerica Bank collective trusts advised by Munder Capital Mgmt. It is essentially a passively managed* index fund of all US and foreign companies traded as ADRs in the US with a market cap of $250 million based on market cap weighting. It has Avg Annual Total Returns (fees included) of 10.81 % since 1986. 1 yr 11.013 yr 11.07, 5yr -0.98, 10 yr 9.52
(Mar 2005 data)

Current composition of the fund is described as follows (editied somewhat):

63 % of the Fund's holdings are invested in US companies...
98% of all US stocks and REITS, similar to the Wilshire 5000.
Remaining 37% invested in companies incorporated outside US which are listed and traded as ADRs on US exchanges.
3500 total securities. Cover lg, med, sm stocks of US and 50 countries including some emerging markets...

My employer pays the management fees...brokerage fees and expenses are paid from fund assest and rolled into the price and returns.

This sounds pretty good to me as kind of a one size fits all, world stock market, low cost investment. Vanguard or similar combinations of low cost index funds are not available in my Company plan. This appears to me to achieve a similar result. My only worry is the amount of foreign exposure.

Is this a good retiree "one stop" stock portfolio choice? At the momnet I am spooked enough by both the stock and bond markets that I am in cash for the first time in 20 years. But I don't intend to stay there!



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