401K Index Fund Price Different than Market Question

[crazyfire]

Hello everyone. I'm sure this is a simple answer but why is the index fund I purchase through the 401k is different than the market.

Example:

In my 401k there is a fund called

"0899 Vanguard 500 Index Fund Adm" which I'm assuming is investing in the SP 500.

Similar index on the market is VTINX?

Unit price in the 401k is 23.87 per share vs VTINX is 366.82 per share.

Sorry for the dumb question. Just trying to understand it

 

[rt-texas]

Hello everyone. I'm sure this is a simple answer but why is the index fund I purchase through the 401k is different than the market.

Example:

In my 401k there is a fund called

"0899 Vanguard 500 Index Fund Adm" which I'm assuming is investing in the SP 500.

Similar index on the market is VTINX?

Unit price in the 401k is 23.87 per share vs VTINX is 366.82 per share.

Sorry for the dumb question. Just trying to understand it

Index 500 Admiral fund is VFIAX...pretty much the S&P 500 as you said
VTINX is a Target Retirement Fund...per Vanguard, for someone already in retirement.
30% stocks/70% bonds

Two totally different funds.

 

[SALTedOut]

In addition even if they were the same index they would likely be different share classes, regular, admiral and institutional. All three would have the same investments but different prices.

As an example assume I formed two funds, Fund A and Fund B. I purchase the same 2 shares of ABC stock worth $50 each, so each fund has $100 of value.

For Fund A I want everyone to have access to it so I form 100 shares worth $1 each to sell. For Fund B I want them more "exclusive" so I form 2 shares worth $50 each. I then sell the 100 Fund A shares and 2 Fund B shares to the public.

ABC stock goes up 10% so each fund is now worth $110. But Fund A shares are worth $1.10 and Fund B shares are worth $55.

That is an over simplified example as it does not account for new investors as an open ended fund would have. But the concept is exactly the same.

 

[target2019]

This is the tear sheet from Voya Retirement.
https://www.voyaretirementplans.com/fundonepagerscolor/899.pdf

Link to institutional Vanguard site.
https://institutional.vanguard.com/web/c1/investments/product-details/fund/0540

Institutional version of S&P500.
https://institutional.vanguard.com/web/c1/investments/product-details/fund/1940

Apparently Voya has a special version, 0899, maybe it's the extra expenses they tack on.

 

[crazyfire]

In addition even if they were the same index they would likely be different share classes, regular, admiral and institutional. All three would have the same investments but different prices.

As an example assume I formed two funds, Fund A and Fund B. I purchase the same 2 shares of ABC stock worth $50 each, so each fund has $100 of value.

For Fund A I want everyone to have access to it so I form 100 shares worth $1 each to sell. For Fund B I want them more "exclusive" so I form 2 shares worth $50 each. I then sell the 100 Fund A shares and 2 Fund B shares to the public.

ABC stock goes up 10% so each fund is now worth $110. But Fund A shares are worth $1.10 and Fund B shares are worth $55.

That is an over simplified example as it does not account for new investors as an open ended fund would have. But the concept is exactly the same.

Thanks for the explanation. So both fund are the same.

Make a little more sense but still confusing lol