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This is a relatively small IRA ($80-some thousand) that I inherited from a parent a few years ago. It wasn't until TRP replaced the Growth and Income fund with the US Large Cap Core* fund that I took a closer look. Are the allocations a little lopsided? I will be receiving RMDs but do not rely on them for income. Any insights appreciated. TIA
PRCIX 1.3 % New Income
TRULX 11 % U.S. Large Cap Core*
PRWAX 12.4 % All Cap Opportunity
PRISX 4.3 % Financial Services
TRBCX 18 % Blue Chip Growth
PRHSX 43 % Health Sciences
Very lopsided! Why is 43% in "Health Sciences", and only 11% in "US Large Cap Core"? I would reverse those two. Also, the overall tilt is too growth-oriented, too large-cap-oriented, and arguably too domestic.
Is this a managed account or one which your parents made the allocation?
It is impossible to tell if this is unbalanced or lopsided unless we have the whole portfolio of which this is part. If you looked at the assets I have at TRP, you would conclude lopsided, too large cap, too "bunch of other things". But that is only a part of my portfolio. It fits well into the overall asset allocation.
PRCIX 1.3 % New Income
TRULX 11 % U.S. Large Cap Core*
PRWAX 12.4 % All Cap Opportunity
PRISX 4.3 % Financial Services
TRBCX 18 % Blue Chip Growth
PRHSX 43 % Health Sciences
The first line item, PRCIX, is only 1.3% of the portfolio, so not a big deal, but the fund's expenses @ .51% are WAY out line for the US, corporate & mortgage-backed bonds in which it invests:
The second line item, TRULX - US Large Cap Core - is a poor choice compared to any standard S&P 500 fund which, by definition, also is US Large Cap Core. TRULX incurs a very high .74% expense ratio compared to a standard S&P 500 fund such as Fidelity's FXAIX which charges .015% - and gives you better exposure to the asset class and substantially better expected returns as well.
The third line item, PRWAX, appears to really be a large-cap growth fund despite its name. Its expense ratio is .78% - very high compared to another large-cap growth fund FSPGX which only charges .03%, and has far better returns:
You can do the same analysis on the other funds - each seems to be inferior to less expensive comparable funds from other players.
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As you will be receiving RMDs but do not rely on this portfolio for income, you might consider just putting it all in a standard all-market fund such as FZROX which charges a zero expense ratio with zero minimums.
Is this a managed account or one which your parents made the allocation?
It is impossible to tell if this is unbalanced or lopsided unless we have the whole portfolio of which this is part. If you looked at the assets I have at TRP, you would conclude lopsided, too large cap, too "bunch of other things". But that is only a part of my portfolio. It fits well into the overall asset allocation.
Good point. I guess this offset his $250,000 in a checking account and $250,000 in a money market earning .04%. Even the bank manager could not convince him that .04% is not 4%. Alzheimer's is a b****.
This is a relatively small IRA ($80-some thousand) that I inherited from a parent a few years ago. It wasn't until TRP replaced the Growth and Income fund with the US Large Cap Core* fund that I took a closer look. Are the allocations a little lopsided? I will be receiving RMDs but do not rely on them for income. Any insights appreciated. TIA
PRCIX 1.3 % New Income
TRULX 11 % U.S. Large Cap Core*
PRWAX 12.4 % All Cap Opportunity
PRISX 4.3 % Financial Services
TRBCX 18 % Blue Chip Growth
PRHSX 43 % Health Sciences
Health Sciences has had amazing long term returns but it is very lopsided to have 43% in just one sector of the stoc market.
The bond fund position is so small it's not worth having. Either increase it or get rid of it.
To your corrected post: 14% in Finance stocks is too high.
You don't have any small or medium size company stocks in these funds. Yes, technically the All Cap fund has smaller companies, but it still skews pretty heaviliy toward larger ones.
I know it's boring and the long term returns may not be as high, but what about T. Rowe Price Balanced? It's a classic 60% stock / 40% bond balanced fund. It tends to buy growth oriented stocks and mostly investment grade bonds. It's not the best balanced fund out there, but returns are above average for the category and the expense ratio is below average.
If you want to get a little racy, I'd do 90% in the Balanced Fund, 5% in the Health Sciences fund, and 5% in T. Rowe Price Small Cap Value and call it a day. It would be better diversified than what you have (you'll have more bonds and more small cap and value stocks, which you have almost none of in the mix listed above).
The above would be more diversified and somewhat more conservative (without being super conservative).
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Are the allocations a little lopsided? I will be receiving RMDs but do not rely on them for income. Any insights appreciated. TIA
