Ok, So what S&P 500 ETF do I buy in my Fidelity Taxable Account?

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Hiwatter
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Ok, So what S&P 500 ETF do I buy in my Fidelity Taxable Account?

Post by Hiwatter »

I already have FSKAX (Fidelity Total US Stock Market) in my Taxable... I don't want to buy more because it has a high turnover rate (11%) and its technically a mutual fund that trades at the end of the day...

What I do want in my Fidelity Taxable:

- An ETF (as I understand it, ETF's are preferred in Taxable Accounts)
- Low Turnover (so I don't have to pay as much in taxes each year on the dividends)
- Low fees

From what I can tell, maybe iShares IVV (S&P 500) might be a good option... are there other choices as well?

I understand I can hold Vanguard's S&P 500 ETF (VOO), but it looks like there's a one-time $75 fee for holding it in my Fidelity account. Not a big deal, but are there other reasons not to hold a Vanguard ETF in a Fidelity account? When I first became a Boglehead I was steered away from holding Vanguard funds in my Fidelity account.

Any help is greatly appreciated!

Thank you
aednichols
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Re: Ok, So what S&P 500 ETF do I buy in my Fidelity Taxable Account?

Post by aednichols »

I think the best option is indeed VOO.

The $75 fee you're referring to probably applies to the mutual fund version, VFINX.

Fidelity eliminated commissions on all ETFs, so Vanguard's now trade commission-free.
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David Jay
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Re: Ok, So what S&P 500 ETF do I buy in my Fidelity Taxable Account?

Post by David Jay »

What is your thinking on going from Total Market (3000 companies) down to just the S&P 500?

I would purchase a total market ETF. How about IWV (iShares Russell 3000 ETF) or VTI (Vanguard Total Market)?
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lazynovice
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Re: Ok, So what S&P 500 ETF do I buy in my Fidelity Taxable Account?

Post by lazynovice »

I own VTI In my Fidelity taxable accounts as well as my Roth’s. I have also owned VOO in these accounts as a TLH partner. I am not charged a $75 fee or any other fee that I see as long as I trade online. So if you like VOO, buy it.

It used to be that holding vanguard funds outside of vanguard kept you from owning Admiral share classes. To buy vanguard mutual funds at Fidelity, you pay a commission. Maybe that is why you were steered away in the past. But the no commission ETF world is different.
Ferdinand2014
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Re: Ok, So what S&P 500 ETF do I buy in my Fidelity Taxable Account?

Post by Ferdinand2014 »

Hiwatter wrote: Fri Aug 14, 2020 11:52 am I already have FSKAX (Fidelity Total US Stock Market) in my Taxable... I don't want to buy more because it has a high turnover rate (11%) and its technically a mutual fund that trades at the end of the day...

What I do want in my Fidelity Taxable:

- An ETF (as I understand it, ETF's are preferred in Taxable Accounts)
- Low Turnover (so I don't have to pay as much in taxes each year on the dividends)
- Low fees

From what I can tell, maybe iShares IVV (S&P 500) might be a good option... are there other choices as well?

I understand I can hold Vanguard's S&P 500 ETF (VOO), but it looks like there's a one-time $75 fee for holding it in my Fidelity account. Not a big deal, but are there other reasons not to hold a Vanguard ETF in a Fidelity account? When I first became a Boglehead I was steered away from holding Vanguard funds in my Fidelity account.

Any help is greatly appreciated!

Thank you
Turnover and dividends are not the same. VOO is free to purchase.
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett
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Hiwatter
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Re: Ok, So what S&P 500 ETF do I buy in my Fidelity Taxable Account?

Post by Hiwatter »

Ferdinand2014 wrote: Fri Aug 14, 2020 12:24 pm
Hiwatter wrote: Fri Aug 14, 2020 11:52 am I already have FSKAX (Fidelity Total US Stock Market) in my Taxable... I don't want to buy more because it has a high turnover rate (11%) and its technically a mutual fund that trades at the end of the day...

What I do want in my Fidelity Taxable:

- An ETF (as I understand it, ETF's are preferred in Taxable Accounts)
- Low Turnover (so I don't have to pay as much in taxes each year on the dividends)
- Low fees

From what I can tell, maybe iShares IVV (S&P 500) might be a good option... are there other choices as well?

I understand I can hold Vanguard's S&P 500 ETF (VOO), but it looks like there's a one-time $75 fee for holding it in my Fidelity account. Not a big deal, but are there other reasons not to hold a Vanguard ETF in a Fidelity account? When I first became a Boglehead I was steered away from holding Vanguard funds in my Fidelity account.

Any help is greatly appreciated!

Thank you
Turnover and dividends are not the same. VOO is free to purchase.
Does fund "turnover" not create capital gains that are kicked out in dividends? Sure seem that way with FSKAX.
MotoTrojan
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Re: Ok, So what S&P 500 ETF do I buy in my Fidelity Taxable Account?

Post by MotoTrojan »

Hiwatter wrote: Fri Aug 14, 2020 12:27 pm
Ferdinand2014 wrote: Fri Aug 14, 2020 12:24 pm
Hiwatter wrote: Fri Aug 14, 2020 11:52 am I already have FSKAX (Fidelity Total US Stock Market) in my Taxable... I don't want to buy more because it has a high turnover rate (11%) and its technically a mutual fund that trades at the end of the day...

What I do want in my Fidelity Taxable:

- An ETF (as I understand it, ETF's are preferred in Taxable Accounts)
- Low Turnover (so I don't have to pay as much in taxes each year on the dividends)
- Low fees

From what I can tell, maybe iShares IVV (S&P 500) might be a good option... are there other choices as well?

I understand I can hold Vanguard's S&P 500 ETF (VOO), but it looks like there's a one-time $75 fee for holding it in my Fidelity account. Not a big deal, but are there other reasons not to hold a Vanguard ETF in a Fidelity account? When I first became a Boglehead I was steered away from holding Vanguard funds in my Fidelity account.

Any help is greatly appreciated!

Thank you
Turnover and dividends are not the same. VOO is free to purchase.
Does fund "turnover" not create capital gains that are kicked out in dividends? Sure seem that way with FSKAX.
Hiwatter wrote: Fri Aug 14, 2020 11:52 am I already have FSKAX (Fidelity Total US Stock Market) in my Taxable... I don't want to buy more because it has a high turnover rate (11%) and its technically a mutual fund that trades at the end of the day...
Turnover really only matters for mutual funds so when evaluating most ETFs you should ignore that. Once an ETF gets established it is quite rare for them to have any capital gains distributions, which you will certainly get with a mutual fund that has any turnover. You mentioned dividends but both ETFs and MF will have those, it is the cap-gains distributions you want to avoid.

Some State Street ETFs had cap-gains problems for a while (apparently they have corrected that), and I know for example that Vanguard's VSS had some it's very 1st year (has never had one since) but for any large-cap or total-market ETF from a major fund provider you should never see one. Even high-turnover semi-active funds generally can manage to not distribute any. For example I hold a lot of FNDC with 25% turnover and don't believe it has ever distributed a cap-gain.
snailderby
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Re: Ok, So what S&P 500 ETF do I buy in my Fidelity Taxable Account?

Post by snailderby »

I don't think you can go wrong with IVV or VOO, now that Fidelity (and many other brokerages) allow you to buy or sell most ETFs commission-free. Both IVV and VOO have very low ERs and very narrow bid/ask spreads.
oscarsonthepond
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Re: Ok, So what S&P 500 ETF do I buy in my Fidelity Taxable Account?

Post by oscarsonthepond »

lazynovice wrote: Fri Aug 14, 2020 12:20 pm I own VTI In my Fidelity taxable accounts as well as my Roth’s. I have also owned VOO in these accounts as a TLH partner. I am not charged a $75 fee or any other fee that I see as long as I trade online. So if you like VOO, buy it.

It used to be that holding vanguard funds outside of vanguard kept you from owning Admiral share classes. To buy vanguard mutual funds at Fidelity, you pay a commission. Maybe that is why you were steered away in the past. But the no commission ETF world is different.
+1 to this. Would suggest VTI (80% of which is composed of the S&P500 anyways), but if you're set on just S&P500 then would use VOO. I've had both in my Fidelity accounts, and they don't charge fees/commissions for them anymore.
Ferdinand2014
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Re: Ok, So what S&P 500 ETF do I buy in my Fidelity Taxable Account?

Post by Ferdinand2014 »

Hiwatter wrote: Fri Aug 14, 2020 12:27 pm
Ferdinand2014 wrote: Fri Aug 14, 2020 12:24 pm
Hiwatter wrote: Fri Aug 14, 2020 11:52 am I already have FSKAX (Fidelity Total US Stock Market) in my Taxable... I don't want to buy more because it has a high turnover rate (11%) and its technically a mutual fund that trades at the end of the day...

What I do want in my Fidelity Taxable:

- An ETF (as I understand it, ETF's are preferred in Taxable Accounts)
- Low Turnover (so I don't have to pay as much in taxes each year on the dividends)
- Low fees

From what I can tell, maybe iShares IVV (S&P 500) might be a good option... are there other choices as well?

I understand I can hold Vanguard's S&P 500 ETF (VOO), but it looks like there's a one-time $75 fee for holding it in my Fidelity account. Not a big deal, but are there other reasons not to hold a Vanguard ETF in a Fidelity account? When I first became a Boglehead I was steered away from holding Vanguard funds in my Fidelity account.

Any help is greatly appreciated!

Thank you
Turnover and dividends are not the same. VOO is free to purchase.
Does fund "turnover" not create capital gains that are kicked out in dividends? Sure seem that way with FSKAX.
Capital gains and dividends are separate. Turnover does not automatically translate to capital gains unless it results in a net gain. A mutual fund can have turnover with losses as well as gains. FSKAX had a turnover of 11% over the previous 12 months ending 2/2020. In 2019 it generated capital gains of 0.127 on a share price of 82.34 or .1% (1/10 of 1% or 0.001) vs 11% ( or 0.11) turnover. FSKAX has generated $0 in capital gains in 2020. It has performed identical to VTSAX the last 10 years to date.

https://fundresearch.fidelity.com/fund- ... AX%2CVTSAX
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett
nix4me
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Re: Ok, So what S&P 500 ETF do I buy in my Fidelity Taxable Account?

Post by nix4me »

IVV or VOO for sp500
ITOT or VTI or SCHB for total market

There are no fees to buy ETFs
sycamore
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Re: Ok, So what S&P 500 ETF do I buy in my Fidelity Taxable Account?

Post by sycamore »

Hiwatter wrote: Fri Aug 14, 2020 11:52 am I already have FSKAX (Fidelity Total US Stock Market) in my Taxable... I don't want to buy more because it has a high turnover rate (11%) and its technically a mutual fund that trades at the end of the day...

What I do want in my Fidelity Taxable:

- An ETF (as I understand it, ETF's are preferred in Taxable Accounts)
- Low Turnover (so I don't have to pay as much in taxes each year on the dividends)
- Low fees
...
As noted by other posters, the turnover rate doesn't necessarily translate to any meaningful capital gains. Whether 0.1% capital gains is too much is up to you. Example: If you have $100,000 in FSKAX, there'll be about $100 in cap gains distributions. At 15% cap gains tax, that's $15.

Reasons to stick with FSKAX:

- 11% turnover is low enough.

- FSKAX expense ratio is 0.015% which is very, very low

- A total stock market has some (minor) advantages over the S&P 500

- trading at the "end of the day" just means your trades take place at the fund's Net Asset Value rather than what market traders think it's worth during the day. Usually market price and NAV are nearly the same but sometimes an ETF can trade at a premium to NAV. Some investor prefer mutual funds for this reason and/or they dislike getting a trade price that can go up and down intraday. To be fair, some investors prefer ETFs because they know they're getting a fair market price. Personally I don't think there's a strong reason to exclusively trade in MFs or ETFs, but that's up to you.
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retiredjg
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Re: Ok, So what S&P 500 ETF do I buy in my Fidelity Taxable Account?

Post by retiredjg »

Am I the only one who finds that 11% number a bit...shocking? When I read that, I thought it could not be correct, but that is what the Fido site says.

Why on earth would a total stock index fund have that much turnover?
sycamore
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Re: Ok, So what S&P 500 ETF do I buy in my Fidelity Taxable Account?

Post by sycamore »

retiredjg wrote: Fri Aug 14, 2020 2:41 pm Am I the only one who finds that 11% number a bit...shocking? When I read that, I thought it could not be correct, but that is what the Fido site says.

Why on earth would a total stock index fund have that much turnover?
Good point, total stock and S&P 500 funds usually have a lower turnover in 4-5 % range.

There was an earlier thread about your question with one explanation that it was related to a big change last year to Fidelity Freedom Index Funds swapping which fund was used for US stock allocation.
Ferdinand2014
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Re: Ok, So what S&P 500 ETF do I buy in my Fidelity Taxable Account?

Post by Ferdinand2014 »

sycamore wrote: Fri Aug 14, 2020 3:21 pm
retiredjg wrote: Fri Aug 14, 2020 2:41 pm Am I the only one who finds that 11% number a bit...shocking? When I read that, I thought it could not be correct, but that is what the Fido site says.

Why on earth would a total stock index fund have that much turnover?
Good point, total stock and S&P 500 funds usually have a lower turnover in 4-5 % range.

There was an earlier thread about your question with one explanation that it was related to a big change last year to Fidelity Freedom Index Funds swapping which fund was used for US stock allocation.
It was actually because they changed the allocation percent for international. The fund lineup changed shareclass designation to a closed version of the existing funds, but not related to turnover. Not sure about FSKAX, but the S&P 500 index FXAIX only had 4% turnover and their EAFE MSCI international index FSPSX had a turnover of 2%. Previous years FSKAX has been in the 4% range.
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Chip
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Re: Ok, So what S&P 500 ETF do I buy in my Fidelity Taxable Account?

Post by Chip »

retiredjg wrote: Fri Aug 14, 2020 2:41 pm Am I the only one who finds that 11% number a bit...shocking? When I read that, I thought it could not be correct, but that is what the Fido site says.

Why on earth would a total stock index fund have that much turnover?
My guess is that it's somewhat an artifact of the date of the annual report: 2/29/20

That report showed a 16.5B decrease in assets due to share transactions, I suspect due to customer selling during the February downturn. Net assets at the end of the period were 46B. Turnover is defined as "the lesser of amounts of purchases or sales of long-term portfolio securities divided by the monthly average value of long-term securities owned by the fund".

So if customers sell the fund, the fund has to sell stocks, increasing the turnover rate.

Annual report available here.
stocknoob4111
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Re: Ok, So what S&P 500 ETF do I buy in my Fidelity Taxable Account?

Post by stocknoob4111 »

so to confirm, if I buy VOO at my Fidelity Taxable brokerage there are no fees correct?
lazynovice
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Re: Ok, So what S&P 500 ETF do I buy in my Fidelity Taxable Account?

Post by lazynovice »

stocknoob4111 wrote: Wed Oct 20, 2021 8:35 pm so to confirm, if I buy VOO at my Fidelity Taxable brokerage there are no fees correct?
Correct
stocknoob4111
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Re: Ok, So what S&P 500 ETF do I buy in my Fidelity Taxable Account?

Post by stocknoob4111 »

lazynovice wrote: Wed Oct 20, 2021 9:17 pm
stocknoob4111 wrote: Wed Oct 20, 2021 8:35 pm so to confirm, if I buy VOO at my Fidelity Taxable brokerage there are no fees correct?
Correct
what about selling? is it $4.95 to sell? that is what I was charged few months ago to sell stock but not sure about ETFs
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Re: Ok, So what S&P 500 ETF do I buy in my Fidelity Taxable Account?

Post by goodenyou »

I vote VOO.
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MrJedi
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Re: Ok, So what S&P 500 ETF do I buy in my Fidelity Taxable Account?

Post by MrJedi »

stocknoob4111 wrote: Thu Oct 21, 2021 2:04 pm
lazynovice wrote: Wed Oct 20, 2021 9:17 pm
stocknoob4111 wrote: Wed Oct 20, 2021 8:35 pm so to confirm, if I buy VOO at my Fidelity Taxable brokerage there are no fees correct?
Correct
what about selling? is it $4.95 to sell? that is what I was charged few months ago to sell stock but not sure about ETFs
What was the fee you were charged? There is no fee for stocks/ETFs at Fidelity.
stocknoob4111
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Re: Ok, So what S&P 500 ETF do I buy in my Fidelity Taxable Account?

Post by stocknoob4111 »

I was charged $4.95 for selling company ESPP stock
lazynovice
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Re: Ok, So what S&P 500 ETF do I buy in my Fidelity Taxable Account?

Post by lazynovice »

stocknoob4111 wrote: Thu Oct 21, 2021 3:21 pm I was charged $4.95 for selling company ESPP stock
That must be something unique to the ESPP. There is no charge to sell VOO or any other ETF.
cat_guy
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Re: Ok, So what S&P 500 ETF do I buy in my Fidelity Taxable Account?

Post by cat_guy »

Do you have access to NTSX? https://www.optimizedportfolio.com/ntsx/
UpperNwGuy
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Re: Ok, So what S&P 500 ETF do I buy in my Fidelity Taxable Account?

Post by UpperNwGuy »

Hiwatter wrote: Fri Aug 14, 2020 11:52 am From what I can tell, maybe iShares IVV (S&P 500) might be a good option... are there other choices as well?
Yes, ITOT (the iShares total market ETF) would be a better option than IVV because it has 3500 companies instead of 500.
Late2Brake
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Re: Ok, So what S&P 500 ETF do I buy in my Fidelity Taxable Account?

Post by Late2Brake »

stocknoob4111 wrote: Thu Oct 21, 2021 2:04 pm
lazynovice wrote: Wed Oct 20, 2021 9:17 pm
stocknoob4111 wrote: Wed Oct 20, 2021 8:35 pm so to confirm, if I buy VOO at my Fidelity Taxable brokerage there are no fees correct?
Correct
what about selling? is it $4.95 to sell? that is what I was charged few months ago to sell stock but not sure about ETFs
I have bought and sold VOO in my fidelity account, there is no fee either way.
nalor511
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Re: Ok, So what S&P 500 ETF do I buy in my Fidelity Taxable Account?

Post by nalor511 »

VOO. Nuff said
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ruralavalon
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Re: Ok, So what S&P 500 ETF do I buy in my Fidelity Taxable Account?

Post by ruralavalon »

Hiwatter wrote: Fri Aug 14, 2020 11:52 am I already have FSKAX (Fidelity Total US Stock Market) in my Taxable... I don't want to buy more because it has a high turnover rate (11%) and its technically a mutual fund that trades at the end of the day...

What I do want in my Fidelity Taxable:

- An ETF (as I understand it, ETF's are preferred in Taxable Accounts)
- Low Turnover (so I don't have to pay as much in taxes each year on the dividends)
- Low fees

From what I can tell, maybe iShares IVV (S&P 500) might be a good option... are there other choices as well?

I understand I can hold Vanguard's S&P 500 ETF (VOO), but it looks like there's a one-time $75 fee for holding it in my Fidelity account. Not a big deal, but are there other reasons not to hold a Vanguard ETF in a Fidelity account? When I first became a Boglehead I was steered away from holding Vanguard funds in my Fidelity account.

Any help is greatly appreciated!

Thank you
Either iShares Core S&P 500 ETF (IVV) ER 0.03% or Vanguard S&P 500 ETF (VOO) ER 0.03% will do fine.

Don't waste another second trying to decide, both are good, just pick one.
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bugleheadd
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Re: Ok, So what S&P 500 ETF do I buy in my Fidelity Taxable Account?

Post by bugleheadd »

i have IVV and VOO, n o complaints there
rgs92
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Re: Ok, So what S&P 500 ETF do I buy in my Fidelity Taxable Account?

Post by rgs92 »

cat_guy wrote: Thu Oct 21, 2021 6:46 pm Do you have access to NTSX? https://www.optimizedportfolio.com/ntsx/
With a 20 basis-point expense ratio? Why do you feel it's worth it? Thx.
Fidelity zero expense funds would be my choice if you are already in Fidelity.
(I guess in a taxable account Vanguard or Ishares or Schwab ETFs are best, as many have noted above. they are all equivalent as far as I can see.)
cat_guy
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Re: Ok, So what S&P 500 ETF do I buy in my Fidelity Taxable Account?

Post by cat_guy »

rgs92 wrote: Fri Oct 22, 2021 9:56 am
cat_guy wrote: Thu Oct 21, 2021 6:46 pm Do you have access to NTSX? https://www.optimizedportfolio.com/ntsx/
With a 20 basis-point expense ratio? Why do you feel it's worth it? Thx.
Some people find it interesting and very likely to consistently beat the market if pre-volkner policy doesn't return. (I'm open to corrections/feedback on this characterization 😅)
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