One who intends to leave others better off for his having existed.

7/16/14

A Few Observations on Share Classes and Wells Fargo Stable Return Fund

North Carolina's Wells Fargo Stable Value Fund charges 0.44%

https://www.nctreasurer.com/ret/401k%20Plan%20Features/StableValue401k.pdf


http://www.wellsfargoadvantagefunds.com/pdf/collective/FactSheet_StableReturnFund_N.pdf

The Expense Ratio (far right column, top) for Class N Shares is 0.34% per year for those 401k plan participants lucky enough to have been sold Wells Fargo's lowest cost Stable Value fund.

The Expense Ratio (far right column, bottom) for Class N60 Shares is 0.94% per year for those 401k plan participants unlucky enough to have been sold Wells Fargo's lowest cost Stable Value fund.

0.94% - 0.34% - 0.60% difference.
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The one year return for 0.34% Class N Shares is 1.55%.

The one year return for 0.94% Class N60 Shares is 0.94%.

1.55% - 0.94% = 0.61% difference between the least and most expensive kind of the exact same thing.
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A 401k plan with $1,000,000 with the 0.94% Class N60 costs $9,400 per year to manage.

A 401k plan with $1,000,000 with the 0.34% Class N costs $3,400 per year to manage.

$9,400 - $3,400 = $6,000 that goes into participant pockets or the financial advisor's.
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Here is a Wells Fargo Stable Return N fund that costs 1.32% per year;


https://ddol.divinvest.com/ddol/servlet/CatalogViewerServlet?doView=true&fieldDocumentCategory=18&fieldDocumentType=109&businessPartner=1&fieldLanguage=0&serverSide=true&fieldDOC_DESC_T=Z593
There is another 0.97% tacked on.

There are lots of different kinds of Wells Fargo Stable Value Funds;

Wells Fargo Stable Value Fund K (CUSIP 949907869)
Wells Fargo Stable Value Fund L (CUSIP 949907851)
Wells Fargo Stable Value Fund M (CUSIP 949907844)
Wells Fargo Stable Value Fund N (CUSIP 949907836)
Wells Fargo Stable Value Fund O (CSUIP 949907588)
Wells Fargo Stable Value Fund P (CUSIP 949907828)
Wells Fargo Stable Value Fund Q (CUSIP 949907810)
Wells Fargo Stable Value Fund R (CUSIP 949907786)
Wells Fargo Stable Value Fund S (CUSIP 949907745)
Wells Fargo Stable Value Fund T (CUSIP 949907760)
Wells Fargo Stable Value Fund U (CUSIP 949907208)

The Wells Fargo Stable Value Funds are bank collective trust funds. Collective funds are unregistered bank investment products that commingle the assets of multiple fiduciary clients to invest in a diversified portfolio of securities. These collective funds are available only to retirement plans and certain other employee benefit trusts, which are exempt from Federal income tax, and for which Wells Fargo acts as a fiduciary. These funds are not available to the general public outside of a qualified retirement plan. Bank collective funds are primarily regulated by the Office of the Comptroller of the Currency (OCC).

http://www.galliard.com/srfssvdisclosures
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Then there are different share classes;


http://www.wellsfargoadvantagefunds.com/pdf/collective/disclosure_CF_stable_return.pdf

Looks like Fidelity likes to charge 0.49% instead of 0.212%; 

https://nb.fidelity.com/public/workplacefunds/summary/OOAR

T. Rowe Price likes to charge 0.83% for the exact same thing


https://www3.troweprice.com/rws/rps/public/assets/ffs/DSRS1.pdf

Broadridge charges 0.94% instead of 0.212%; 

https://fd.broadridge.com/funddescriptors/949907778.pdf

MyFRS charges 0.27%;

http://www.myfrs.com/pdf/funds/fund_profile_B40.pdf

Prudential charges 0.45%;

https://www.retirement.prudential.com/RSO/web/fundsheets/SVF45.pdf
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Sometimes, a charge shown on fact sheets don't include what the plan provider lumps in on top of the stated fee.

It looks like North Carolina's employees are paying more than they should for a Stable Value Fund in their retirement plans.

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