457b Nationwide Account investing

Investing
#1

Hey everyone.

I work for local government that has a mandatory 7% investing into a retirement account, but also offers a 457b that I currently put a little money into. Since taking Jermey’s excellent course I have sense place my money into an NCIT Target Date index fund (Year 2055).

My question is if there is anyone familiar with Nationwide as a whole and if I am investing into a quality fund? When I search on google for NCIT Index and review the fact sheet it doesn’t quite give me the “warm and fuzzies” like my Roth IRA with Fidelity does showing clearly what I am investing in.

I may be overthinking this, but I just want to make sure I’m in a good fund before dumping significant money into it.

Side note: My job also offers investing with Voya’s 457b.

Any assistance would help! Thanks for reading!

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#2

Hey @mbaskin2005!

It honestly looks OK to me. A couple things I noticed looking at that fact sheet:

  • The expense ratio is 0.47%. Kind of in the “medium” range, but definitely not the 1-2% ugly range that I’ve seen with some plans.
  • The largest holding looks like a US stock index fund, so you’re getting access to the same stock market that Vanguard or Fidelity will sell you.
  • My best guess is this fund is or is close to ticker symbol NTDSX. When you compare its past performance to Vanguard’s 2055 fund, they’re pretty close with Vanguard’s returning 10.12% vs Nationwide’s 9.34%. That’s an underperformance of about 0.8%. About half of that you can attribute to the higher expense ratio and the rest might be a slight difference in asset allocation, or just bad luck from the actively managed portion. Here’s what it looks like:

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ALL THAT SAID, it’s still a fine investment! 9.34% sure beats a 0.1% savings account of course. And generally people don’t stay at jobs forever so you’ll likely be able to roll this account over to Vanguard or Fidelity when you leave and upgrade to the slightly better investments. In the meantime, it’s well worth contributing to take advantage of the tax breaks! (Plus it sounds like it’s mandatory anyway, so you’re in good shape!)

#3

Thanks @Jeremy. And yes, that expense ratio gives me the itches, but it’s the best they offer for their target date index funds…Thank you again for the detailed response!

#4

Here’s the breakdown of what’s in it:

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Like Jeremy said the 0.47% is a little on the high side but most 457b’s generally are. You can always roll over and if I understand correctly you can also withdraw from the 457 when you separate, as a friend of mine is living a gap year on 457 money.