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Fun with Catch; portfolio rework, take your best shot.....

catch22catch22
edited January 2012 in Fund Discussions
Okey-Dokey

The "Fun with Catch" was to get you through the door and here....but, the rework is a serious project, and will take place.

***Subject: Utah's 529 educational savings plan

Here's the story: This 529 has the below choices*** available; and 50% will be allocated to VBMPX. The 529 will be funded for another 6 years.

What may be your other choices for the remaining 50% mix? Only one portfolio change per calendar year is allowed.

The current allocation is:

VIIIX =50%
VMCPX = 20%
VSCPX = 20%
VTPSX = 10%

***Available choices NOTE: I have not yet studied the variables between some of the similar/related fund styles.

---U.S. Domestic---

VITPX Total Stock Market Index Fund
VIIIX Institutional Index Fund
VMCPX Mid-Cap Index Fund
VSCPX Small-Cap Index Fund

---Foreign Large Blend

VTPSX Total International Stock Index Fund
VIDMX Developed Markets Index Fund

---Bonds---

VBMPX Total Bond Market Index Fund
VFSIX Short-Term Investment-Grade Fund

I thank you in advance for your insights.

Take care,
Catch

Comments

  • Zolta
    This is a joke, right? Or else, MFO has become a site for the 0.01%, let alone for the 1.0%. Only one of the listed funds was for an initial deposit for less than 50 MILLION, with most in the 100 MILLION category. Perhaps you'd warrant an answer if you'd request comments on more attainable share classes of the same fund.
  • catch22catch22
    Howdy Zolta,

    Nice to find you are here at MFO.

    No, not a joke. The request is for a 529 educational savings account; as available in all 50 states, to invest tax deferred monies for a child's college funding. These accounts use institutional type funds and so one does see the large minimum investment.

    Hats off to you for paying attention to the details.

    Take care,
    Catch
  • Old_JoeOld_Joe
    edited January 2012
    I would believe that, since these funds are available through Catch's 529 portfolio, the portfolio manager itself must meet those minimums, certainly not the individual participants. Since the portfolio manager more than likely has plans with many different customers, they can meet the minimums by consolidating all of the various customer accounts.

    Still, you're right- that sure is a whole lot of bucks!
  • catch22catch22
    Hey Old_Joe,

    Didn't intend to scare the pants off of anyone. If our house was attaining those individual minimums for the funds listed; I would be sending this write from BALI; and you all would have an invite to visit.

    Take care,
    Catch
  • fundalarmfundalarm
    Hi Mark, I just did an annual trading in my daughter's 529 account -- also, 6 years to college. I use Nebraska plan because of the fund choices and because my own state provides nothing in terms of current tax benefits. Nebraska has Vanguard choices but also some Pimco, etc. Below, I'll show you the equivalent of what I have done for my child limited to your fund choices.
    Fixed Income -- total 50%
    VBMPX - 30%
    VFSIX - 20% (you want shorter duration in case interest rates go up rapidly)
    Equities - total 50%
    VITPX -- 30% (or split VIIIX (LC)-20%, and small and mid 5% each)
    VTPSX -- 20% (Intl is cheap compared to US after 2011)

    Just a suggestion of course. JR
  • catch22catch22
    Howdy fundalarm,

    JR, I do believe we are thinking along the same lines here. Although I did note the 50% to the total bond fund; the consideration of a bit to the short term IG, too.

    I think your choice mix should provide a smooth course ahead; and will do well, even if there is nothing much more than sideways markets for a few years.

    Our 529 is with Utah. A decent plan; but I wish they had a few more fund choices.

    Thank you for taking your time with your thoughts about this area.

    Take care of you and yours,
    Mark
  • Sven
    Hi Catch, As I recalled you are invested in Utah 529 plan, right? If there is only 6 years of investment time left, your current 80/20 equity/bond allocation is too aggressive in my opinion. At this point the emphasis should shift toward capital preservation, but other may choose different paths.

    What you proposed is similar with 50% allocated to bond/cash equivalent as the age-based "growth" portfilio. Given the low interest rate environment, short term bond index and FDIC insurance saving are not attractive options. I would pick longer duration bonds such as Vanguard Total Bond Market Index. Several years before withdrawal starts you will need to change your equity/bond/cash allocation again.

    http://www.uesp.org/Investment-Info/Age-Based-Investment-Options.aspx


  • catch22catch22
    Howdy Sven,

    Yes, it is the Utah 529; and we will be using what they name the "Customized Static" option. A build your own mix from the available choices at this link.
    http://www.uesp.org/Customized-Static.aspx

    The current holdings are a bit too hot for our pleasure and that is why we are going to dial this back to a 50/50 bond and equity mix as I noted in the first post. As you mentioned too, we will continue to monitor the markets; but with only one change allowed per calendar year, it really puts an edge on trying to look forward for investment areas.

    Thank you for your time and thoughts about this topic.

    Take care of you and yours,
    Catch
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