Have a 401(k)? Ask HR About These Funds

NEW YORK (TheStreet) -- Mutual funds leave a lot to be desired. Many charge excessive fees, underperform the stock market as a whole and generate big tax bills, leaving the investor with few gains. And, unfortunately, the mutual funds available to investors via 401(k) plans can be worse than average.

Depending on your employer and 401(k) plan sponsor, you may be able to add new mutual funds to your menu of investment choices with relative ease. (Talk to your human resources (HR) representative about what's possible.)

Alternatively, some companies allow employees to opt into "self-directed" 401(k)s, which may allow for a larger selection of mutual funds via a linked brokerage account.

Assuming your company is willing to add new mutual funds to its 401(k) roster, most investors would be best served by asking for the lowest-cost S&P 500 index fund available.

Let's say your existing plan includes an S&P 500 index fund that charges 0.45% in fees. If you can replace it with the Vanguard Institutional Index fund (VINIX), which requires a $5 million investment (a reasonable amount for companies with many 401(k) participants), you would save 91% in fund expenses. That's right, the institutional Vanguard fund tracks the S&P 500 for only 0.04% in expenses.

The same logic also applies to finding the lowest-cost bond index fund or a balanced fund (which contains stocks and bonds). The less you pay, the more you keep.