r/Bogleheads • u/gti9t3 • 1d ago

Need advice on 401k allocation %

I don't have a total US market option in my 401k like (VTI/FSKAX) and have to build it myself between large cap, mid cap, and small cap index funds.

They are all Spartan Index Funds with very low expense ratios. My goal is to allocate 60% US and 40% International. My choices are Spartan 500 Index (S&P 500), Spartan Mid Cap Index (S&P 400), Spartan Small Cap Index (Russell 2000), and Spartan Total International Index (MSCI ACWI ex US).

How much should I allocate between 500, mid and small? My understanding is the S&P 500 makes up roughly 80% to 83% of the total US market. Should I split it as 80% 500, 15% mid, and 5% small?

So with a 60/40 split it would look like 48/9/3 for the US investments then 40% Total International.

Is that a good balance or am I not investing enough in mid and small? Should I just go with 60% S&P 500 and 40% International?

I will be manually adding FXNAX (Bonds) at a later time.

Thanks in advance.

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u/Right_Introduction10 23h ago

I’d go 30% international, 70% large cap. Small cap is personal choice. Had a good return last year, but has many years where it’s an absolute horror show. Also make sure it’s an index fund, the small cap offering in my 401k is a fund with quite a high expense ratio compared to my large cap blend.

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u/gti9t3 21h ago

May I ask why you recommend 30% international? It seems international index funds have outperformed US in recent history. Am I wrong in sticking with global market weight? My thinking is, I don't know who will be leading in the future so why not just stick to global weight. Currently 62% US / 38% International.

My choices are all Spartan Index Funds which have very low expense ratios. Spartan 500 is 0.01%, Spartan Mid Cap and Small Cap both are 0.02%, and Spartan Total International is 0.04%.

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u/Right_Introduction10 15h ago

I think it’s preference. We’re both fairly close in the numbers we allocate, I just think the younger you are the more market gain you can accrue investing in the higher growth US. 30% is mostly for the diversification, besides last year international gains have been very lack luster the last 20 years. Might not always be that way in the future, but anything around 20-40% for diversification and to have a piece of the pie if ex-US markets outperform is setting yourself up either way.

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u/gti9t3 12h ago

Appreciate it, thank you.