Mistake to overallocate in low expense funds for 401K?
 

The following are the funds available for me to invest in through my firm's 401K with each expense ratio:

1. Gold Sachs Short Durat Gov (GSTGX)- .54
2. Dodge Cox Inc (DODIX)- .44
3. American Funds American Hi INc (RITEX)- .72
4. American Beacon Lrg Cp Value (AAGPX)- .86
5. Davis NY Venture (NYVTX)- .89- 4.75% Front Load [img]/images/graemlins/shocked.gif[/img]
6. Vanguard 500 Ind (VFINX)- .18
7. American Funds Grth Fund (RGAEX)- .68
8. Gold Sachs Md Cap Val (GSMCX)- .82
9. Vanguard Mid Cap Ind (VIMSX)- .22
10. Northern SmallCp Val (NOSGX)- 1.00
11. T.Rowe New HOriz (PRNHX)- .84
12. American Funds Euro Pac (REREX)- .83
13. Dodge Cox INt Stck (DODFX)- .7

Obviously I know i need to diversify etc. But these expense ratios on the whole seem really high. Would it be a big mistake to heavily weight my 401K in the Vanguard funds specifically the 500 INdex, due to their much lower exp ratios? Also, how does a fund with a front end load effect me if it makes up a small part of my 401K portfolio?

I feel like i have a pretty crappy selection to pick from. Is there anything i can do to have better funds to choose from?

What about this allocation:

DODIX- 10%
VFINX- 25%
RGAEX- 25%
VIMSX- 15%
PRHNX- 10%
DODFX- 15%

Re: Mistake to overallocate in low expense funds for 401K?
 

Cobra, that is actually a very very strong lineup of choices and is among the very best I have seen. A few notes:

NYVTX almost certainly does not have a load. It is offered in 401k plans as load waived so you just pay the expense ratio.

I like your allocation except for a bit of an underweighting to international. I might do DODFX as 25% and just use VFINX as 40% while eliminating RGAEX. This is both expense ratio friendly and gives you a more favorable balance of large, mid and international.

I think the great majority of American workers would kill to have your choices with the low associated expense ratios. You can make a case to the provider for certain fund inclusions and chances are they may be willing as this company appears to have the ability to use many fund companys on one platform.

Re: Mistake to overallocate in low expense funds for 401K?
 

[ QUOTE ]
Cobra, that is actually a very very strong lineup of choices and is among the very best I have seen. A few notes:

NYVTX almost certainly does not have a load. It is offered in 401k plans as load waived so you just pay the expense ratio.

I like your allocation except for a bit of an underweighting to international. I might do DODFX as 25% and just use VFINX as 40% while eliminating RGAEX. This is both expense ratio friendly and gives you a more favorable balance of large, mid and international.

I think the great majority of American workers would kill to have your choices with the low associated expense ratios. You can make a case to the provider for certain fund inclusions and chances are they may be willing as this company appears to have the ability to use many fund companys on one platform.

[/ QUOTE ]

wdc,

that is very interesting to know. with my newb investing knowledge i just assumed since most of the funds had expense ratios 2-3x more than the vanguard funds that they were less than desirable. good to know i was wrong.

the front load waiver for 401k is also very good to know as well. so then i take it the answer to my original question "would it be a mistake to overallocate in low expense funds?" would be "yes, it would be a mistake."

thanks for your thoughts.