Tools and Tips for Finding Alternative Upgrading Funds

In an investing world that was fully SMI friendly, members who follow the Fund Upgrading strategy would be able to invest in any fund we recommend. Unfortunately, that’s not the way things are for many Upgraders, especially for those trying to Upgrade within an employer-based 401(k) or 403(b) retirement account.

Such plans often have sharply limited options from which to choose. Further, only a few company-sponsored plans allow users access to exchange-traded funds (ETFs). In the new "upgraded" version of Upgrading, unveiled in our January issue, ETFs play a major role.

But retirement plans can differ markedly from company to company. Some plans have a "brokerage window," an option that allows employees to buy and sell funds through a brokerage platform. Typically, such an option (sometimes called a "self-directed brokerage account") gives an investor access to thousands of funds, although generally not ETFs. In contrast to brokerage-window plans, many company retirement plans offer only a relative handful of pre-determined choices.

So what do you do if you’re trying to Upgrade in your retirement plan, but your plan doesn’t allow you to buy and sell ETFs? Or if you don’t have access to other SMI-recommended funds?

Be sure you know what’s in your plan

Before discussing the ETF question, here’s an initial suggestion related to traditional funds: Even if you can’t find a particular fund’s ticker symbol when searching your plan, don’t assume that you lack access to that fund. The fund may be in your plan under a different ticker symbol.

Of course, if you have only a handful of funds from which to choose, it’ll be readily apparent whether or not you have access to a particular fund! But if you have a brokerage-window plan, a fund may be "hiding" under a different ticker than the one we list in the SMI newsletter.

In most cases, we list "retail class" or "investor class" tickers, but many funds carry multiple tickers. Funds sold through retirement plans often carry an "institutional class" or "retirement class" ticker symbol.

I learned this from experience. My wife had a 403(b) account that (as it turned out) offered access to many of SMI’s recommended funds through a brokerage window, but I couldn’t locate the funds using a ticker-symbol search. I discovered that if I searched the plan’s website by "fund family," I sometimes could find the fund (and the ticker symbol) I needed.

If your plan’s website doesn’t offer a fund-family search, try this fund-finder tool from Business Insider. First, choose a fund family from the dropdown menu on the left of the page, and then choose "fund type," which typically will be "Equity."