The Microsoft 401(k) Plan offers three tiers of investment options, designed to accommodate different levels of experience and involvement in managing your long-term savings. These options are meant to work together, giving you the flexibility to create a well-diversified portfolio that matches your risk and return goals.
Regardless of which investment approach you choose, certain principles apply:
You can make an unlimited number of exchanges between investments at any time during the calendar year, subject to mutual fund trading policies.
Here’s a visual of the three tiers. This depicts how the 401(k) Committees, in conjunction with the independent investment consultant, view the Plan’s investment line up. See the links below for additional details about each investment.
Plan investment options typically have fund managers who invest the assets on behalf of all the shareholders. The mutual funds that the Plan offers are available to the general public. However, our separately managed accounts and collective investment funds are not marketed to the general public and therefore generally have lower management expenses and fees than mutual funds. When investments aren’t quoted on a public exchange, they don’t have ticker symbols and can’t be looked up online.
If you're new to investing or prefer not to take the time to build and maintain your own portfolio, consider the BlackRock LifePath investments. These professionally managed, diversified portfolios are designed to be a robust investment solution. Simply select the portfolio closest to your "target date"—the year you plan to retire or start withdrawing from your account—and BlackRock's investment professionals will adjust the portfolio as that date approaches. Each portfolio includes a mix of global stocks and bonds, which are rebalanced to reduce risk exposure as you near retirement.
If you prefer to take a more hands-on approach to investing, take a look at the Core Investments offered in the Plan. This selection of registered mutual funds, separately managed accounts, and collective investment funds span a variety of investment styles and asset classes so you can create your own mix.
PIMCO Inflation Response Multi-Asset Collective Trust Class M
Vanguard Short-Term Bond Index Fund Institutional Plus Shares
For sophisticated investors who are willing to take on additional risk and are prepared to closely monitor this portion of a 401(k) portfolio, Microsoft offers access to Fidelity’s BrokerageLink. This is a self-directed brokerage account that is set up to offer a broader range of investment options. For more information, see BrokerageLink.
A note on Microsoft stock: New purchases of Microsoft stock are not permitted in the 401(k) Plan. Participants that held Microsoft stock as part of their account prior to January 1, 2016 can retain those holdings and the associated dividends can continue to be reinvested. See Microsoft Stock Dividend Options for details.
All investment managers charge fees for their services, which are generally subtracted from the assets of the investments they manage. Over time, these fees can have a significant impact on your net investment returns.
The Microsoft 401(k) Plan offers an incredibly low-cost investment line-up, which helps you achieve a greater return on your investments. Fees are only one of the many factors to consider when researching and selecting investment options. Different types of investments typically have lower or higher fees. For example, fees for money market funds are typically much lower than for stock funds, but that does not necessarily mean you should invest only in money market funds.
Find out about the fees associated with all Plan investments on Fidelity NetBenefits. Select Microsoft 401(k) Plan, click Investments, then Performance & Research.
For additional details about the Plan, including investment changes, settlement dates and timing of trades, review the Summary Plan Description.
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