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 Post subject: Need help with HSA investment account.
PostPosted: Mon Dec 10, 2012 1:21 pm 

Joined: Mon Jan 18, 2010 9:48 am
Posts: 9
Hello. I just opened an HSA investment account because our balance is getting large enough to make me feel uneasy just letting it sit and earn basically nothing in the cash account. I am 35 and have some money set aside in the cash side of the HSA for unexpected medical expenses. I am not sure what to put the HSA investment cash in...Here are my choices

JPMorgan Prime Money Market Fund – Morgan Shares……

VMVXX

JPMorgan Limited Duration Bond Fund – A Shares……

ONUAX

American Century Diversified Bond Fund – Investor Class……

ADFIX

PIMCO Total Return Fund – D Shares……

PTTDX

BlackRock Bond Index Fund - Investor – A Shares……

BMOAX

See Prospectus

Fact Sheet
Principal Strategic Asset Management Flexible Income Portfolio – R4 Shares……

PFILX

See Prospectus

Fact Sheet
Principal Strategic Asset Management Conservative Balanced Portfolio – R4 Shares……

PCBLX

See Prospectus

Fact Sheet
Principal Strategic Asset Management Balanced Portfolio – R4 Shares……

PSBLX

See Prospectus

Fact Sheet
Principal Strategic Asset Management Conservative Growth Portfolio – R4 Shares……

PCWSX

See Prospectus

Fact Sheet
JPMorgan Equity Index Fund – Select Shares……

HLEIX

See Prospectus

Fact Sheet
MainStay ICAP Equity Fund – A Shares……

ICAUX

See Prospectus

Fact Sheet
JPMorgan Large Cap Growth Fund – A Shares……

OLGAX

See Prospectus

Fact Sheet
Principal MidCap Blend Fund – R4 Shares……

PMBSX

See Prospectus

Fact Sheet
JPMorgan Mid Cap Growth Fund – A Shares……

OSGIX

See Prospectus

Fact Sheet
Royce Premier Fund – Investment Shares……

RYPRX

See Prospectus

Fact Sheet
BlackRock Small Cap Index Fund - Investor – A Shares……

MDSKX

See Prospectus

Fact Sheet
BlackRock Small Cap Growth Equity Fund - Investor – A Shares……

CSGEX

See Prospectus

Fact Sheet
DWS Global Thematic Fund – A Shares……

SGQAX

See Prospectus

Fact Sheet
Thornburg International Value Fund – A Shares……

TGVAX

See Prospectus

Fact Sheet
BlackRock International Index Fund – A Shares……

MDIIX

See Prospectus

Fact Sheet
PIMCO Real Return Fund – D Shares……

PRRDX

See Prospectus

Fact Sheet
MainStay High Yield Corporate Bond Fund – A Shares……

MHCAX

See Prospectus

Fact Sheet
Templeton Global Bond Fund – A Shares……

TPINX

See Prospectus

Fact Sheet
Eaton Vance Global Macro Absolute Return Fund – A Shares……

EAGMX

See Prospectus

Fact Sheet
T. Rowe Price Real Estate Fund – Advisor Shares……

PAREX

See Prospectus

Fact Sheet
Principal LifeTime 2010 – R4 Shares……

PTASX

See Prospectus

Fact Sheet
Principal LifeTime 2015 – R4 Shares……

LTSLX

See Prospectus

Fact Sheet
Principal LifeTime 2020 – R4 Shares……

PTBSX

See Prospectus

Fact Sheet
Principal LifeTime 2025 – R4 Shares……

LTEEX

See Prospectus

Fact Sheet
Principal LifeTime 2030 – R4 Shares……

PTCSX

See Prospectus

Fact Sheet
Principal LifeTime 2035 – R4 Shares……

LTSEX

See Prospectus

Fact Sheet
Principal LifeTime 2040 – R4 Shares……

PTDSX

See Prospectus

Fact Sheet
Principal LifeTime 2045 – R4 Shares……

LTRLX

See Prospectus

Fact Sheet
Principal LifeTime 2050 – R4 Shares……

PTESX

See Prospectus

Fact Sheet
Principal LifeTime 2055 – R4 Shares……

LTFLX

See Prospectus

Fact Sheet
Principal LifeTime Funds Strategic Income – R4 Shares……

PLSSX


I am looking for something with a decent return, but dont want to risk it too much with one of the target date funds that are mostly stocks. I was thinking of putting it all in the Pimco Total Return Fund, where it would be fairly safe for now....any thoughts? Thanks so much for your help. I am still learning about investments, etc.


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 Post subject: Re: Need help with HSA investment account.
PostPosted: Mon Dec 10, 2012 1:25 pm 

Joined: Mon Feb 04, 2008 7:35 am
Posts: 1148
Location: Maryland
I hate when companies offer 300 options for employees. Information overload! /soapbox.

Do you have any retirement funds? Where and what types of holdings do you have for the rest of your money? It's hard for me to pick which one is best for you when you simply give a list of 30 funds. If you ask me, my choice would be OLGAX...i had an aunt named Olga. :P


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 Post subject: Re: Need help with HSA investment account.
PostPosted: Mon Dec 10, 2012 1:30 pm 

Joined: Mon Jan 18, 2010 9:48 am
Posts: 9
Yes, it is overload for sure...I also have Roths for my husband and I. They are in the Vanguard Star Fund, He has a 401k in the Vanguard 2035 fund. So I feel like these are fairly agressive for our age, 35. I don't want to be as agressive with the HSA fund, but still earn something more than I have now, which is .14. Thanks for your help.


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 Post subject: Re: Need help with HSA investment account.
PostPosted: Mon Dec 10, 2012 2:52 pm 
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Joined: Wed Sep 23, 2009 9:01 am
Posts: 5398
You should be asking what the fees on each of the funds are. Many of those funds charge loads and fees of 3-6%! Since you want your HSA to be fairly secure and nonvolatile I think you'll be picking short to intermediate bond funds. That means you will be lucky to get 1-2% returns per year and the fees will take several years to recover from. That means, unless you can find a fund that is very low fee (less than 1%) you will probably be better off with the money market account.


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 Post subject: Re: Need help with HSA investment account.
PostPosted: Mon Dec 10, 2012 3:01 pm 

Joined: Mon Jan 18, 2010 9:48 am
Posts: 9
For the Pimco Total Return is says the annual fee is .75%. I don't see anything about loads on the Prospectus.


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 Post subject: Re: Need help with HSA investment account.
PostPosted: Mon Dec 10, 2012 3:14 pm 

Joined: Mon Nov 01, 2010 5:15 pm
Posts: 1201
suz9601 wrote:
For the Pimco Total Return is says the annual fee is .75%. I don't see anything about loads on the Prospectus.

I'd look carefully...they may not call it a "load" per se. These guys like to play coy on what they are actually charging you to do business with them so the "load" may be cleverly disguised as another name.


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 Post subject: Re: Need help with HSA investment account.
PostPosted: Mon Dec 10, 2012 3:33 pm 

Joined: Mon Jan 18, 2010 9:48 am
Posts: 9
Found this on the Pimco Total Return. It is the PTTDX. Doesn't look too bad to me, but when interest rates start rising won't that make the fund go down? Or is it balanced so that helps it not fall as much..Thanks again for everyone's help. I appreciate it.

Fees & Expenses

Front load

0.00%

Deferred load

0.00%

Max. redemption fee

0.00%

Total expense ratio

0.75%

12 b-1

n/a

Turnover

584.00%

Launch Expense Calculator


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 Post subject: Re: Need help with HSA investment account.
PostPosted: Mon Dec 10, 2012 4:21 pm 
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Joined: Wed Sep 23, 2009 9:01 am
Posts: 5398
When I saw your initial list my top pick would have been Pimco Total Return. But that fund is sometimes sold with a big load so I did not want to mention it. But if you can buy it for 0.75% I would. In fact, I do. That fund is where I have a good amount of bond money in my retirement plan.

PTTDX has a duration of 4.56 years. That means if interest rates go up by 1% the price of the fund will go down about 4.56%. So yes, if rates go up you will lose a little bit of money, about 4.56% for every 1% interest rate increase if it were to happen today. That fund is well managed though so you can expect that the duration will gradually go down as they anticipate rate increases so that when it finally happens the duration will be shorter and the fund will not go down so much.

I encourage you to go read up on "duration" or Macauley Duration and then decide for yourself if you want to take the risk of losing a little bit when rates go up in exchange for a higher return now. It's really a personal decision. I would not be worried about the risk of that fund but I would also not be looking for my HSA to be a source of investment return either.


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 Post subject: Re: Need help with HSA investment account.
PostPosted: Tue Dec 11, 2012 12:05 pm 

Joined: Mon Jan 18, 2010 9:48 am
Posts: 9
Thanks everyone for your help. I appreciate it.


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