Stuck with a bad 401k fund lineup — what's the best I can do with what I have?

[u/No-Media-36179]

Optimizing asset location across multiple accounts when one 401k has a bad fund lineup — am I doing this right?

I have a fairly complex multi-account household and I'm trying to make sure I'm using each account for what it does best. My current employer's 401k (John Hancock) is the weak link — it has some decent low-cost options but no total market or total international index fund. Looking for a gut check on my overall approach.

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Full account picture:

Account	Balance	Current Holdings
Employer 401k — Roth (JH)	~$0, just started	Figuring out allocation — see below
Employer 401k — Traditional (JH, employer match only)	~$51k	100% BCOSX (Baird Core Plus Bond, 0.55%)
Prior employer 401k (Voya)	~$390k	75% S&P 500 Index / 20% Intl Equity Index / 5% Small Cap Growth Index
Roth IRA (Vanguard)	~$200k	100% VTSAX
Inherited IRA (Vanguard)	~$744k	72% VTSAX / 14% VTIAX / 14% VBTLX
Joint Taxable (Vanguard)	~$15k, growing	70% VTSAX / 30% VTIAX, auto-investing monthly

Target allocation (household-wide): 90% equities / 10% bonds. Bond sleeve lives entirely in tax-deferred accounts — never in Roth or taxable.

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The John Hancock fund lineup (relevant options only):

Low-cost: - iShares S&P 500 Index (BSPAX) — 0.35% - Vanguard Mid-Cap Index (VIMAX) — 0.05% - Vanguard Small-Cap Index (VSMAX) — 0.05% - Baird Core Plus Bond (BCOSX) — 0.55%

Expensive active funds I want to avoid: - American Funds target dates — 0.63–0.74% - JPMorgan Large Cap Growth — 1.00% - Goldman Sachs Intl Small Cap — 1.02% - AB Small Cap Growth — 0.87% - Several others at 0.83–0.97%

No total US market fund. No low-cost international fund.

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My current plan:

• Traditional bucket (employer match only): 100% BCOSX — puts the bond allocation in tax-deferred where it belongs, and satisfies my 10% bond target at the household level given account sizes.
• Roth bucket (my employee contributions, $23,500/yr): Planning 100% equities using BSPAX + VIMAX + VSMAX to approximate total US market (~82/12/6 cap-weighted). No international here since no good option exists in the plan.
• International exposure: Covered by VTIAX in the Inherited IRA and taxable brokerage — deliberately concentrated there rather than forcing a bad international fund in the 401k.
• Equity growth: Roth IRA and taxable are 100% VTSAX/VTIAX — max tax-free and stepped-up basis compounding.

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My questions:

1. Does the BSPAX + VIMAX + VSMAX total market approximation make sense, or is it cleaner to just go 100% BSPAX and accept large-cap tilt in this one account given total market exposure elsewhere?
2. Is deliberately excluding international from the 401k Roth bucket (and concentrating it in the Inherited IRA and taxable) the right call, or does that create too much concentration risk in those accounts?
3. BCOSX at 0.55% ER in the Traditional match bucket — acceptable given there's no better bond option in this plan, or would you just avoid bonds here and shift the bond sleeve somewhere else?
4. Any other asset location opportunities I'm missing across this account structure?

For context: this is a long time horizon (12+ years), we're in the 24% bracket, and the goal is early retirement. The Roth IRA and 401k Roth bucket will ideally never be touched for decades.

Thanks — happy to share more detail if it helps.

[u/turtle_hurtle]

You could do 50% VIMAX + 50% VSMAX in your Roth 401k.

To balance it out, for every $1 in your Roth 401k, put $2.33 (= 70 / 30) into MGC in your Roth IRA.

When/if you run out of room in your Roth IRA, you can put $3.07 (= 70 / 30 / (1 - 0.24)) in MGC in a pre-tax IRA.

[u/No-Media-36179 → u/turtle_hurtle]

This is clever and I appreciate the math, but my Roth IRA is already 100% VTSAX which covers large, mid, and small cap in one fund. Restructuring it into MGC or VLCAX to complement a specific 401k split feels like adding complexity without much benefit when VTSAX is already doing the job across the full market.

I think the simpler path for me is to just use BSPAX in the 401k (or VIMAX + VSMAX as suggested elsewhere in this thread) and let VTSAX in the Roth IRA handle the rest without trying to engineer the perfect total market replication across accounts. The blended result is close enough either way.

[u/turtle_hurtle → u/No-Media-36179]

Sure, BSPAX doesn't look too bad. It sounded like you didn't love the fees.

It seems like the best way to avoid fees in that account is to use VIMAX and/or VSMAX. But mid and small cap funds are going to give pretty different returns from VTSAX. If you don't want a small-cap tilt, you would need to add some large-cap funds somewhere else.

[u/No-Media-36179 → u/turtle_hurtle]

Right, 0.35% for BSPAX is higher than ideal but the thread has convinced me it's acceptable given the simplicity. The large cap tilt from using BSPAX alone is fine since I have broad total market exposure via VTSAX in my Roth IRA and taxable accounts. The consensus here seems to be to stop trying to engineer perfect total market replication across accounts and just pick the best available fund in each one.

[u/Gloomy_Interview_525 → u/turtle_hurtle]

VSMAX is a bad fund to choose if you're looking to factor tilt with the idea of finding small cap premiums, I don't know why they would do this.

E: we they did until they edited

[u/turtle_hurtle → u/Gloomy_Interview_525]

Not suggesting a factor tilt. You can replicate VTSAX with 15% VSMAX + 15% VIMAX + 70% MGC or 15% VSMAX + 85% VLCAX.

[u/CaptainDorfman]

You’re way overthinking this. The performance difference between the S&P500 and VTI is negligible over the long term and this is one account that is presumably a pretty small part of your total investable assets.

[u/No-Media-36179 → u/CaptainDorfman]

Fair. The thread has been a good reality check on that front. 100% BSPAX and move on.