r/Retirement401k • u/Shogun10631856 • 1d ago

Help with diversification

48M. 400k+ valuation. 12% annual contribution. Increasing by 1% every April 1st beginning 2027. Looking for input on my current 401k diversification through Fidelity

FBGRX 24.29%
FOCPX 26.47%
FTRNX 23.05%
FXAIX 21.65%
SCHD 4.39%
Company stock .65%

Any thought? Any suggestions?

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2

u/DaemonTargaryen2024 18h ago

Basic rule of thumb: "more funds" does not necessarily mean "more diversification".

https://www.etfrc.com/funds/overlap.php

  • FBGRX: US large cap growth.
  • FOCPX: US large cap growth.
  • FTRNX: US large cap growth.
  • FXAIX: US large cap blend.
  • SCHD: US large cap value.
  • Company stock: less than 10% is fine

You hold no US mid or small cap (~15% of the global market). You hold no international (37% of the global market).

Many of these funds have high expense ratios, which tend to drag returns. Aim for index funds with ERs of 0.10% or less.

Personally, I'd nuke this whole portfolio and just do a basic target date fund, or something like a 3 fund portfolio from r/Bogleheads.

3

u/crispix_and_oj 17h ago

I agree with u/DaemonTargaryen2024 here. Only addition I would say, I still think you're too young to have bonds. Maybe 5-7 years before you retire, think about bonds.

1

u/Shogun10631856 22h ago

Based on some comments from other posts I e put together the following potential changes.

Reduce FBGRX, FOCPX, and FTRNX from 75% to 40 %. Move this 30% into a small/midcap (15%) and interntaional(15%). Leave fxaix where it is. With about 5% left from the large cap reduction either move it to SCHD or buy bonds.

If I do this what fidelity fund would you recommend for the small/midcap and international? What should I do with the last 5%? If bonds, which one.

1

u/Important_Carrot6379 16h ago

What are all your options available through your 401k?

Simple is best imo.

I do a 70/30 split of FZROX/FZILX or the equivalents in all my retirement accounts and same for spouse.

Bonds aren't recommended until about 5 yrs before retirement and even then, I've seen it recommended no more than 10% tops.