After reading Tony Robbin’s Money Master the game book. I started regretting investing in high expense Mutual funds under my 401K plan. My employer’s 401K plan offers around 15 funds and the following two looks promising both in expense ratio/other fees vs performance since inception.
Vanguard Institutional 500 Index (ER 0.01%; returns 14.53% since inception @ 2016)
BlackRock LifePath Index 2050 fund (ER 0.05%; returns 11.88% last 10 years)
The former, Vanguard’s, as the name says follows S&P 500 index but just covers US Domestic market.
The latter, BlackRock’s, holdings include 48% of Russell 1000 index, 33% BlackRock international index, 13% Real estate index, 3% of commodities index, rest includes US debt index and TIPS.
The former is less diversified (at least in this comparison) but yields more yearly returns. Whereas the latter is very much diversified but yields relatively lesser returns.
Which one is a better option among these two? BlackRock LifePath is an index fund but as any target date funds, will it be actively managed that may lead to higher expenses/fees that aren’t listed explicitly?
I highly recommend getting a Vanguard account if you like index funds. They make it very easy, and their funds all have very low loads.