4 ms·
good to be suspicious; employer-selected investments are like employer-provided health care, there's a big imbalance in incentives. 2 things to watch: fund exp
by a5seo 16y ago
good to be suspicious; employer-selected investments are like employer-provided health care, there's a big imbalance in incentives.
2 things to watch: fund expenses and composition
if churning is an issue, it will be reflected in the expense ratio. but if the expense ratio is comparable to actively-managed funds and the fund's composition is index funds, then it might be ok since you're only paying for management services once.
- Natsu 16y agoOh, the new age-balanced funds are not composed of index funds at all. They're composed of a mix of pretty much everything that they swap out every year for something else. So when you're young, you get mostly stocks, when you're old, they buy more bonds. But they have to trade them around all the time to generate fees. Anything that didn't generate enough fees got kicked out of the program (unless you opted out). Thankfully, I was in one of the safer funds (the only one currently showing a profit) before the crash. I wish I could move it over to Vanguard now, but it's too late. They didn't give us much warning, and they certainly gave us no time to switch, when we either had to opt out or get enrolled in their shiny new fee-generating fund.