My company has recently decided to switch to Fidelity as their 401k provider. I am trying to give input to recommend the best funds possible. Does anyone has any experience or know what funds are available in a Fidelity 401k that wouldn't be available to someone in a regular IRA? For instance could we have SGIIX in a fidelity IRA with minimal fees vs the 1,000,000 and transaction fee in a regular Fidelity account? Any input would be appreciated.
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For example, I have a company 401k with Fidelity and it contains the PIMCO Total Return Institutional Share Class PTTRX, 0.46% expense ratio, which normally has a $1 Million minimum, but in the 401k plan there is no minimum at all. It also has Vanguard Institutional Index Plus, VIIIX, an S&P 500 Index fund that charges only 0.02% expense ratio (2 basis points!), there is a private Stable Value investment as a choice, there are two DFA mutual funds, and DFA funds are normally not available to anyone who doesn't go through a Registered Investment Advisor, there is VBTIX, the Vanguard Total Bond Market Institutional class, with only a .07% expense ratio, etc........
So yes, your corporate 401k plan with Fidelity has a lot of flexibility to put funds into your 401k plan from many different fund companies, institutional shares, etc.....And mine also has a Brokerage Link option, where you can purchase anything available to anyone with a Fidelity Brokerage account.
I would lobby to get a Stable Value fund, which is a fixed income fund that uses Guaranteed Investment Contracts to produce an investment with a $1.00 NAV that always stays at $1.00/share, but has a decent yield. It's a super conservative, almost no risk fixed income investment that yields a lot more than the traditional counterparts such as CDs, MMAs, etc., and not available outside a 401k, so it is very unique. Standish BNY Mellon is a company that has these investments ready made, a very high quality company that I would recommend.
Regarding SGIIX, that's probably something your company would have to negotiate with Fidelity to see if they can get it in there. My guess is that the chances are good with respect to getting a bunch of institutional share classes in there, especially if your company has a decent size. The size of your company and the number of 401k participants may be a factor here. I would also lobby to get some DFA funds in there. Certainly you want some Target Date Retirement funds in there. I think the Brokerage Link is great, because you can purchase any stock/bond/mutual fund/ETF, so no one in the 401k plan will feel left out.
Hopefully, your company will offer a nice plan. Many such plans are junky.
Regards,
Catch