Consider how your portfolio is diversified
Just because a fund is new to your 401(k) plan doesn't mean it's going to improve your portfolio in a meaningful way. Even if a fund has a name that sounds like it is much different from the funds already in your portfolio, a deeper investigation may reveal that it isn't different enough to make it a worthwhile investment.
"The names of funds can sometimes be ambiguous, and you often need to look closer to understand how a fund actually invests its assets," says Ryan Franklin, a CFP professional with Moss Adams Wealth Advisors in Yakima, Wash. "Avoid buying multiple funds that have similar investment holdings; evaluate the funds, and choose the best one instead."
When examining new funds, check out their investment objective and strategy. Sites such as Morningstar and Yahoo Finance offer free memberships with access to a wide variety of data on thousands of mutual funds. In addition, your 401(k) plan likely has an investment site where you can gather information about fund options.
Morningstar's fund comparison tool allows you to compare several funds side by side, so you can see their holdings, expenses, performance and other data. That information will help you determine whether a new fund in your 401(k) plan is different enough from an existing fund to warrant adding it to your portfolio.