Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

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Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by LadyGeek »

[2021 thread bumped in 2023 --admin LadyGeek]

Following from my post here, I received a small inheritance in my Fidelity taxable account. This is a muni bond fund, but not for my state of residence (PA). That needs to change. The fund arrived earlier this week with the cost basis reset to the day it hit my account.

The fund represents < 2% of my investments (does not include cash, emergency fund, or property that would be included in net worth). I already had a Fidelity account to hold my HSA - which is currently at $0.05 because I didn't manage the transactions correctly to close it out. The rest of my investments are with Vanguard - for now. Since I didn't plan for this money, along with having "enough", I'm considering this a "fun money" account and thought it would be interesting to track Fidelity's total market fund.

Which Fidelity total market fund would be better? I don't intend to move the money elsewhere, which is a limitation of the ZERO funds (you would have to sell the fund which creates a taxable event). For this account, after-tax return is an important metric.

Fidelity's mutual fund comparison tool (which can also do ETFs) provides a technical deep-dive into just about everything I'm looking for. (The individual fund pages provide the rest.) Not only is the tool intuitive to use, it has help where it would be expected. Indexes are hyperlinked to provide detailed definitions (in the table, not the chart) as well as a link to Help Me Read This Table just under the menu. Nice.

Select the fund (FZROX). In the "Hypothetical Growth of $10,000" chart, click on "Compare Chart" to bring up the comparison tool. You start in the "Snapshot" tab, but you'll want to explore the other tabs.

I created a comparison for FZROX, FSKAX - Fidelity ® Total Market Index, and VTSAX - Vanguard Total Stock Market Index Fund Admiral Shares - the competing Vanguard fund.

Here's the link: Mutual Fund Results - Mutual Funds Research | Fidelity Investments

You simply can't do comparisons like this at Vanguard. It was far easier to add Vanguard to the tool (after checking the numbers against Vanguard directly - they match).

(Net expense ratios: Vanguard = 0.04%, Fidelity (FSKAX) = 0.015%, Fidelity (FZROX) = 0.00%)

The first thing I looked for is the Turnover rate - a measure of tax efficiency. The Fidelity tutorial: ETFs vs. mutual funds: Tax efficiency

- Vanguard Total Market (VTSAX) - 8%
- Fidelity Total Market (FSKAX) - 6%
- Fidelity ZERO (FZROX) - 4%

I was thinking that FZROX has the lowest turnover and should therefore be best in a taxable account. All three are total market - so the fund with the lowest turnover rate wins. Right? Nope, keep going. What I'm really after is my return after taxes have been paid.

I spent a lot of time looking at all of the chart comparisons. Each fund uses a different tracking index, so comparing by indexes won't answer my question. However, it was educational to see how many ways you can view these funds. (New investors are encouraged to explore and ask questions.)

The after-tax returns are visible on the individual fund pages under "Quarter-End Average Annual Total Returns". Note the help and footnotes for this table. Clicking "More" will bring up more fun charts and info. (To new investors - "Total Return" has a special meaning - dividends are reinvested.)

After Taxes on Distributions
- ...............Fund.............................. 1 Year ...... 3 Years .. 5 Years
- Vanguard Total Market (VTSAX).. 43.83% ... 18.24% ... 17.23%
- Fidelity Total Market (FSKAX) ..... 43.77% ... 18.14% ... 17.28%
- Fidelity ZERO (FZROX) ............... 43.57% ... N/A ......... N/A (17.41% over life)

After taxes on distributions and sale of fund shares
- ...............Fund.............................. 1 Year ...... 3 Years .. 5 Years
- Vanguard Total Market (VTSAX).. 26.50% ... 14.68% ... 14.24%
- Fidelity Total Market (FSKAX) ..... 26.42% ... 14.61% ... 14.33%
- Fidelity ZERO (FZROX) ............... 26.28% ... N/A ......... N/A (13.90% over life)

Vanguard (VTSAX) and Fidelity (FSKAX) are tracking within 0.1% of each other. In the short term (1 year), Vanguard has a small lead, but FSKAX overtakes it at 5 years out. It's nose-to-nose all the way down the stretch.

FZROX is a relatively new fund. I can't compare anything longer than 1 year out, but my gut feel is they've compromised something to achieve zero expense ratio. Note how the 1 Year returns are consistently 0.2% below FSKAX. This fund started 8/2/2018 (inception date) and is 3 years old tomorrow 🎂 🎈. I think it's fair to compare the lifetime performance against 3 Years out. FZROX is 0.71% below FSKAX.

Based on the above, FSKAX would be the better choice for my situation. If I had a taxable account at Vanguard, VTSAX would be the way to go.

Comments are welcome. If I missed anything or stated anything incorrectly, please let me know. (I'm making this post to show how I used Fidelity's tool to make a decision.)

Update: Added expense ratios per below.
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by oldcomputerguy »

Just as an added data point, VTSAX's ER is 0.4 0.04 (thanks, 02nz!), FSKAX's is 0.015, less than half the expense. Of course, at that level of ER it's all pretty much "good", but it's noteworthy.
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by LadyGeek »

Thanks, I added the net expense ratios to my post. The problem with deep-diving into the technical stuff is that you sometimes forget the basics. :)
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by livesoft »

I thought the conclusion would be that you would invest the same amount in each of FZROX, FSKAX, and a 3rd fund such as VTI. You would just spend any leftover dollar or penny. Also you would withdraw the money for taxes from each of the funds, for a true after-tax result. Then you would keep track in this thread of the results for the next 10 to 20 years a la a madsinger report.
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by indexfundfan »

With a 0.015% ER FSKAX, I see no reason to get into the very slightly cheaper non-portable FZROX in a taxable account. In an IRA, maybe.

But the better option for me would be to put the money into an ETF, easily transferrable between different brokerages. Fidelity also lets you invest in fractional shares so you can fully invest the last dollar if that is a concern.
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by UpperNwGuy »

Lady Geek: That was an excellent post. Very informative. Too often this forum makes quick judgments about holding Fidelity funds in taxable without doing the kind of deep dive that you just did. I agree with your conclusions.
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by 02nz »

oldcomputerguy wrote: Sun Aug 01, 2021 9:56 am Just as an added data point, VTSAX's ER is 0.4, FSKAX's is 0.015, less than half the expense. Of course, at that level of ER it's all pretty much "good", but it's noteworthy.
I think you meant 0.04%
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by nedsaid »

Effectively, all three of the funds are about the same. The expense ratios for each are so low that they are all effectively zero. Vanguard is very good at indexing, I know that in the past that they had index funds that would beat their index by a tiny bit. If you have an index fund that tracks the index, in essence you are investing for free no matter the stated expense ratio. If your index fund beats the benchmark by a hair, in effect they are paying you to invest the money.

The Vanguard Total Stock Market Index and the Fidelity Total Stock Market Index are essentially a coin flip. The difference between a 0.04% and a 0.015% expense ratio is tiny. A big issue here is the income from portfolio lending, it might be that after taking that into account that the Vanguard product is actually the cheapest. My guess is that Fidelity, being a for profit entity, would take a bigger share of that income than Vanguard. My further guess is that the Fidelity Zero Fund would keep all of the portfolio lending income.

Another thing is that you realize that there is more sophistication than meets the eye as indexers use more sophisticated trading techniques such as patient trading and use of options and futures to better track the index and also to avoid such things as front running by traders. My understanding is that Vanguard is awfully good at this. At one time, Gus Sauter said that front running cost Vanguard about 0.25% a year, I think they have solved this problem. It is a paradox that in order to be really good at indexing that you have to be really good at sophisticated trading strategies.

Then you have raised the issue of tax efficiency. Vanguard has a pretty sophisticated strategy of making their Index ETFs a share class of their mutual funds and using heartbeat trades to keep both their mutual funds and ETFs very tax efficient. I can't speak to Fidelity but I would give Vanguard the edge here.

All three funds, as I recall, follow different indexes. So we are pretty much index picking here. Which of the three is the best index? The Fidelity Zero fund holds fewer stocks than the other two, I would favor a "Total" index with more securities than fewer. Vanguard uses the CRSP Total Stock Market Index, Vanguard saves on licensing fees doing this.

I would NOT hold the Fidelity Zero Total Stock Market fund in a taxable account as it is not portable. The Fidelity Total Stock Market Index (FSKAX) would be the better choice. I own FSKAX and it has been my biggest holding for years.

My guess is that after all the analysis, that the most expensive of the three, even at an expense ratio of 0.04% would be the best choice and that is the Vanguard Total Stock Market Index.
Last edited by nedsaid on Sun Aug 01, 2021 10:27 am, edited 1 time in total.
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by 02nz »

LadyGeek wrote: Sun Aug 01, 2021 9:49 am FZROX is a relatively new fund. I can't compare anything longer than 1 year out, but my gut feel is they've compromised something to achieve zero expense ratio. Note how the 1 Year returns are consistently 0.2% below FSKAX. This fund started 8/2/2018 (inception date) and is 3 years old tomorrow . I think it's fair to compare the lifetime performance against 3 Years out. FZROX is 0.71% below FSKAX.
A compromise is a proprietary index that includes fewer holdings, making its "total stock market" a bit less total than Vanguard's (about 2600 vs almost 4000). Notably, FZROX did not add Tesla until later, and IIRC this accounts for most of the performance difference vs FSKAX and VTSAX.

The other "compromise" is the lack of portability, which is a good reason to avoid the ZERO funds in taxable, as this poster found out too late: viewtopic.php?t=354081.

The surprise to me in the comparison is that the after-tax performance between FSKAX and VTSAX is so close. We tend to recommend Vanguard mutual funds over Fidelity's for tax efficiency, and this shows that (at least in this instance) the difference is negligible.
Last edited by 02nz on Sun Aug 01, 2021 10:32 am, edited 1 time in total.
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by oldcomputerguy »

02nz wrote: Sun Aug 01, 2021 10:22 am
oldcomputerguy wrote: Sun Aug 01, 2021 9:56 am Just as an added data point, VTSAX's ER is 0.4, FSKAX's is 0.015, less than half the expense. Of course, at that level of ER it's all pretty much "good", but it's noteworthy.
I think you meant 0.04%
Oops, you're right. I edited my post. Thanks!
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by nedsaid »

Lady Geek, you did an excellent analysis above. Would you be my financial advisor? :wink:

I did notice that over 10 years that FSKAX was the best in terms of performance but this is the result of using different indexes. Plus, I have teased about Vanguard using the "Groucho Marx solution" of switching indexes. Not sure when Vanguard switched to the CRSP Indexes. So comparisons here are sort of meaningless. If I am correct, Vanguard used to use the Wilshire Total Market Index and at some point switched to CRSP, probably to save on licensing fees. The Fidelity Zero fund uses a proprietary Fidelity Index.

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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by Triple digit golfer »

Aside from your analysis, which appears solid to me at first read, I would probably not use the zero funds anyway. FSKAX has been around for 24 years and has an excellent record of doing what it is supposed to do for an almost free 0.015% fee. I would gladly pay that before investing in the zero funds, which I suspect in addition to holding fewer companies, may take other shortcuts as well.

Maybe I'm a skeptic, but the zero funds feel to me like the next best thing, a trendy thing for the new generation of investors, and FSKAX and the others feel like the solid mainstays. Probably just an illogical emotional feeling, but that's my gut. I see no major downside to sticking with the "classics" here.

All that said, I'd use the zero funds before probably 99.9% of other mutual funds out there. FSKAX just happens to be part of the 0.1%, as does VTSAX.
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by mervinj7 »

LadyGeek wrote: Sun Aug 01, 2021 10:04 am Thanks, I added the net expense ratios to my post. The problem with deep-diving into the technical stuff is that you sometimes forget the basics. :)
If it helps, I hold the ZERO funds in my Fidelity Roth IRA and VTI/ITOT in my Fidelity taxable. Thus, there are no issues with portability, tax efficiency is maximized, and the expenses are fairly low. Since my 401k holds a S&P 500 fund for its main equity holding, I have no issues with TLH'ing VTI/ITOT.
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by terran »

I use Vanguard and/or iShares ETFs in my Fidelity taxable account because ETFs are supposedly more tax efficient since they don't make capital gain distributions.
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by lazynovice »

Why not buy VTI? It’s no commission and then you can experience fractional share purchasing at Fidelity.
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by Mike Scott »

Thanks for sharing this!
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by starboi »

lazynovice wrote: Sun Aug 01, 2021 11:28 am Why not buy VTI? It’s no commission and then you can experience fractional share purchasing at Fidelity.
Exactly, fractional shares have made mutual funds obsolete.
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by nalor511 »

starboi wrote: Sun Aug 01, 2021 11:51 am
lazynovice wrote: Sun Aug 01, 2021 11:28 am Why not buy VTI? It’s no commission and then you can experience fractional share purchasing at Fidelity.
Exactly, fractional shares have made mutual funds obsolete.
Well you still have the premium and bid/ask issues making ETFs more complicated to purchase, but the difference is less than it used to be
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by LadyGeek »

livesoft wrote: Sun Aug 01, 2021 10:15 am I thought the conclusion would be that you would invest the same amount in each of FZROX, FSKAX, and a 3rd fund such as VTI. You would just spend any leftover dollar or penny. Also you would withdraw the money for taxes from each of the funds, for a true after-tax result. Then you would keep track in this thread of the results for the next 10 to 20 years a la a madsinger report.
That won't work in practice, as I'm retired and in the decummulation phase. I'm not going to hold those funds for 10 to 20 years because this account is part of my withdrawal strategy. And then there's this whole tax loss harvesting thingy. I would withdraw from the fund that gives me the best tax strategy.

As for the leftover dollar or penny, I'm not going to spend it. Instead, I would contribute to my HSA* which will take me from $0.05 to $0.06+ and reap the benefits of tax-free gains in my money market fund.

*Unlike a traditional IRA or Roth, you can contribute to an HSA if you are unemployed.
nalor511 wrote: Sun Aug 01, 2021 1:13 pm
starboi wrote: Sun Aug 01, 2021 11:51 am
lazynovice wrote: Sun Aug 01, 2021 11:28 am Why not buy VTI? It’s no commission and then you can experience fractional share purchasing at Fidelity.
Exactly, fractional shares have made mutual funds obsolete.
Well you still have the premium and bid/ask issues making ETFs more complicated to purchase, but the difference is less than it used to be
Thanks! I've been involved with mutual funds for so long, it never occurred to me to look ETFs - which are commission free at Fidelity. :oops: An ETF would remove any concerns for fractional shares. I'll follow the same analysis as above, but add VTI and perhaps ITOT (Fidelity suggests this as similar fund).
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by LadyGeek »

Following a similar approach, I added VTI - Vanguard Total Stock Market ETF and iShares Core S&P Total U.S. Stock Market ETF | ITOT to the mix. I'm linking to the Vanguard and iShares websites because the Fidelity pages aren't so helpful when you want to look at ETF after-tax performance.

Here's the updated Fidelity comparison tool: Mutual Fund Results - Mutual Funds Research | Fidelity Investments

FYI - You can sort the tables by clicking on each column heading.

First, I verified the numbers in the Fidelity tool vs. (Vanguard and iShares). Compare the tool's Overview tab performance with total return. Be sure to match down to 2 decimal places. It's important.

Why? Because Vanguard was off by 0.01%. For some strange reason, Vanguard has a drop-down menu in the "After-tax returns - updated quarterly" table. The default is by Market Price. I selected by Net Asset Value (NAV) and the numbers matched. :annoyed

Net Expense Ratios
- ...............Fund..............................
- Fidelity Total Market (FSKAX) ..... 0.015%
- Fidelity ZERO (FZROX) ............... 0.00%
- iShares Core S&P Total (ITOT).... 0.03%
- Vanguard Total Market (VTSAX).. 0.04%
- Vanguard Total Market (VTI)......... 0.03%

After Taxes on Distributions
- ...............Fund.............................. 1 Year ...... 3 Years .. 5 Years
- Fidelity Total Market (FSKAX) ..... 43.77% ... 18.14% ... 17.28%
- Fidelity ZERO (FZROX) ............... 43.57% ... N/A ......... N/A (17.41% over life)
- iShares Core S&P Total (ITOT).... 43.73% ... 18.13% ... 17.32%
- Vanguard Total Market (VTSAX).. 43.83% ... 18.24% ... 17.23%
- Vanguard Total Market (VTI)........ 43.82% ... 18.24% ... 17.37%

After taxes on distributions and sale of fund shares
- ...............Fund.............................. 1 Year ...... 3 Years .. 5 Years
- Fidelity Total Market (FSKAX) ..... 26.42% ... 14.61% ... 14.33%
- Fidelity ZERO (FZROX) ............... 26.28% ... N/A ......... N/A (13.90% over life)
- iShares Core S&P Total (ITOT).... 26.42% ... 14.60% ... 14.33%
- Vanguard Total Market (VTSAX).. 26.50% ... 14.68% ... 14.24%
- Vanguard Total Market (VTI)........ 26.50% ... 14.68% ... 14.38%

The results are in. There are no bad choices, but the edge goes to VTI.
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by LadyGeek »

My first taxable account transaction at Fidelity hit a snag.

Exchanging shares from a Fidelity mutual fund to a Vanguard ETF is a two-step process. You first need to sell all the Fidelity shares, then buy the Vanguard ETF with the cash. Fidelity calls this a "Cross-family" trade.

There's a step-by-step process for cross-family mutual funds, but not for ETFs: Fidelity.com Help - Trading Mutual Funds

I hit "Trade", then opened the expanded trade window.

- Exchange all shares of my fund
- Fund to buy - VTI

Preview Order results in this error:
(019834) The security you are trying to buy is not a mutual fund. In order to use the proceeds from the sale of your mutual fund to buy this security, you must first sell the mutual fund. Once the proceeds are available you may then place an order to buy the equity.
How do I sell the Fidelity muni bond fund and buy Vanguard VTI?

Where does the cash from the sale go, i.e. is there a temporary cash account?
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by lazynovice »

LadyGeek wrote: Sun Aug 01, 2021 4:12 pm My first taxable account transaction at Fidelity hit a snag.

Exchanging shares from a Fidelity mutual fund to a Vanguard ETF is a two-step process. You first need to sell all the Fidelity shares, then buy the Vanguard ETF with the cash. Fidelity calls this a "Cross-family" trade.

There's a step-by-step process for cross-family mutual funds, but not for ETFs: Fidelity.com Help - Trading Mutual Funds

I hit "Trade", then go to the expanded trade window.

- Exchange all shares of my fund
- Fund to buy - VTI

Preview order results in this error:
(019834) The security you are trying to buy is not a mutual fund. In order to use the proceeds from the sale of your mutual fund to buy this security, you must first sell the mutual fund. Once the proceeds are available you may then place an order to buy the equity.
Do I need to sell the fund first? If so, where does this cash go?

How do I buy VTI with this cash?
When you set up the account what did your choose as your settlement fund? In one account, we have SPAXX and in another it is called FCASH. Sales proceeds go there and then you can purchase the ETFs. I am guessing that the mutual fund sale will process at close tomorrow and the funds will be available to buy Tuesday morning.
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by LadyGeek »

There is no settlement fund. It was a direct transfer into my account from a Fido rep who handled the decedent's estate.

Perhaps I should try to sell all shares and hopefully, it will ask me to create a cash account?
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by lazynovice »

LadyGeek wrote: Sun Aug 01, 2021 4:21 pm There is no settlement fund. It was a direct transfer into my account from a Fido rep who handled the decedent's estate.

Perhaps I should try to sell all shares and hopefully, it will ask me to create a cash account?
Yes. Or transfer in a couple of dollars from you bank account and see where that goes.
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by okwriter »

BTW, the after-tax returns may be incorrect since Fidelity gets those numbers from Morningstar. This has been noted before - Morningstar has incomplete data about qualified vs non-qualified dividends, so they wrongly assume 0% qualified dividends for some years. This increases taxes.

You can see this discrepancy in the 5 and 10-yr numbers here:

VTSAX returns after taxes on distributions
.............................................. 1 Yr ......... 3 Yrs ........ 5 Yrs ........ 10 Yrs
As reported by Vanguard ..... 43.83% ..... 18.23% ..... 17.37% ..... 14.20%
As reported by Fidelity ......... 43.83% ..... 18.24% ..... 17.23% ..... 14.07%

Vanguard knows all about its dividends, so they do the correct tax computation. Morningstar doesn't.
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by jeffyscott »

LadyGeek wrote: Sun Aug 01, 2021 4:21 pm There is no settlement fund. It was a direct transfer into my account from a Fido rep who handled the decedent's estate.

Perhaps I should try to sell all shares and hopefully, it will ask me to create a cash account?
Fidelity says:
Opening a Fidelity account automatically establishes a core position, used for processing cash transactions and for holding uninvested cash.
https://www.fidelity.com/trading/faqs-a ... ted%20cash.

Perhaps they don't show the settlement account in the list of your "positions" when it has $0? The cash from sale will either go to money market or FDIC account depending on what your "core position" is. If you go to "balances", it won't tell you what the core is, but it should show a line for it, when you expand under "cash available to trade" as: Cash (core) $0.00
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by Ferdinand2014 »

LadyGeek wrote: Sun Aug 01, 2021 9:49 am Following from my post here, I received a small inheritance in my Fidelity taxable account. This is a muni bond fund, but not for my state of residence (PA). That needs to change. The fund arrived earlier this week with the cost basis reset to the day it hit my account.

The fund represents < 2% of my investments (does not include cash, emergency fund, or property that would be included in net worth). I already had a Fidelity account to hold my HSA - which is currently at $0.05 because I didn't manage the transactions correctly to close it out. The rest of my investments are with Vanguard - for now. Since I didn't plan for this money, along with having "enough", I'm considering this a "fun money" account and thought it would be interesting to track Fidelity's total market fund.

Which Fidelity total market fund would be better? I don't intend to move the money elsewhere, which is a limitation of the ZERO funds (you would have to sell the fund which creates a taxable event). For this account, after-tax return is an important metric.

Fidelity's mutual fund comparison tool (which can also do ETFs) provides a technical deep-dive into just about everything I'm looking for. (The individual fund pages provide the rest.) Not only is the tool intuitive to use, it has help where it would be expected. Indexes are hyperlinked to provide detailed definitions (in the table, not the chart) as well as a link to Help Me Read This Table just under the menu. Nice.

Select the fund (FZROX). In the "Hypothetical Growth of $10,000" chart, click on "Compare Chart" to bring up the comparison tool. You start in the "Snapshot" tab, but you'll want to explore the other tabs.

I created a comparison for FZROX, FSKAX - Fidelity ® Total Market Index, and VTSAX - Vanguard Total Stock Market Index Fund Admiral Shares - the competing Vanguard fund.

Here's the link: Mutual Fund Results - Mutual Funds Research | Fidelity Investments

You simply can't do comparisons like this at Vanguard. It was far easier to add Vanguard to the tool (after checking the numbers against Vanguard directly - they match).

(Net expense ratios: Vanguard = 0.04%, Fidelity (FSKAX) = 0.015%, Fidelity (FZROX) = 0.00%)

The first thing I looked for is the Turnover rate - a measure of tax efficiency. The Fidelity tutorial: ETFs vs. mutual funds: Tax efficiency

- Vanguard Total Market (VTSAX) - 8%
- Fidelity Total Market (FSKAX) - 6%
- Fidelity ZERO (FZROX) - 4%

I was thinking that FZROX has the lowest turnover and should therefore be best in a taxable account. All three are total market - so the fund with the lowest turnover rate wins. Right? Nope, keep going. What I'm really after is my return after taxes have been paid.

I spent a lot of time looking at all of the chart comparisons. Each fund uses a different tracking index, so comparing by indexes won't answer my question. However, it was educational to see how many ways you can view these funds. (New investors are encouraged to explore and ask questions.)

The after-tax returns are visible on the individual fund pages under "Quarter-End Average Annual Total Returns". Note the help and footnotes for this table. Clicking "More" will bring up more fun charts and info. (To new investors - "Total Return" has a special meaning - dividends are reinvested.)

After Taxes on Distributions
- ...............Fund.............................. 1 Year ...... 3 Years .. 5 Years
- Vanguard Total Market (VTSAX).. 43.83% ... 18.24% ... 17.23%
- Fidelity Total Market (FSKAX) ..... 43.77% ... 18.14% ... 17.28%
- Fidelity ZERO (FZROX) ............... 43.57% ... N/A ......... N/A (17.41% over life)

After taxes on distributions and sale of fund shares
- ...............Fund.............................. 1 Year ...... 3 Years .. 5 Years
- Vanguard Total Market (VTSAX).. 26.50% ... 14.68% ... 14.24%
- Fidelity Total Market (FSKAX) ..... 26.42% ... 14.61% ... 14.33%
- Fidelity ZERO (FZROX) ............... 26.28% ... N/A ......... N/A (13.90% over life)

Vanguard (VTSAX) and Fidelity (FSKAX) are tracking within 0.1% of each other. In the short term (1 year), Vanguard has a small lead, but FSKAX overtakes it at 5 years out. It's nose-to-nose all the way down the stretch.

FZROX is a relatively new fund. I can't compare anything longer than 1 year out, but my gut feel is they've compromised something to achieve zero expense ratio. Note how the 1 Year returns are consistently 0.2% below FSKAX. This fund started 8/2/2018 (inception date) and is 3 years old tomorrow 🎂 🎈. I think it's fair to compare the lifetime performance against 3 Years out. FZROX is 0.71% below FSKAX.

Based on the above, FSKAX would be the better choice for my situation. If I had a taxable account at Vanguard, VTSAX would be the way to go.

Comments are welcome. If I missed anything or stated anything incorrectly, please let me know. (I'm making this post to show how I used Fidelity's tool to make a decision.)

Update: Added expense ratios per below.
The difference may be the index. FZROX is very slightly tilted larger cap with 2500 stocks vs 3600.
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Ferdinand2014
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by Ferdinand2014 »

LadyGeek wrote: Sun Aug 01, 2021 4:12 pm My first taxable account transaction at Fidelity hit a snag.

Exchanging shares from a Fidelity mutual fund to a Vanguard ETF is a two-step process. You first need to sell all the Fidelity shares, then buy the Vanguard ETF with the cash. Fidelity calls this a "Cross-family" trade.

There's a step-by-step process for cross-family mutual funds, but not for ETFs: Fidelity.com Help - Trading Mutual Funds

I hit "Trade", then opened the expanded trade window.

- Exchange all shares of my fund
- Fund to buy - VTI

Preview Order results in this error:
(019834) The security you are trying to buy is not a mutual fund. In order to use the proceeds from the sale of your mutual fund to buy this security, you must first sell the mutual fund. Once the proceeds are available you may then place an order to buy the equity.
How do I sell the Fidelity muni bond fund and buy Vanguard VTI?

Where does the cash from the sale go, i.e. is there a temporary cash account?
It’s always a 2 step process regardless of the ETF. You already have a cash account. It won’t show up until you sell the mutual fund. It’s there behind the scenes. The standard settlement core is an FDIC account that rotates banks so every time you hit $250,000 it adds a second bank so you are always FDIC insured regardless of the balance. It will show up as the “core” account. You can always call Fidelity and have it changed. I use a treasury bill only money market fund for my core for example. At one time you earned a bit more. Nowadays it makes no difference. They all earn essentially nothing. Once you sell mutual fund it prices at 530 pm, liquidates at 830pm and shows up next morning as pending cash. Within 24-48 hours it will show up in your core position, but is usually available for transfer or trade at about 24 hours.

To sell the muni fund just hit trade button. Type in muni fund ticker. Select sell all shares. Submit. Next day buy VTI.
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by LadyGeek »

^^^ Thanks! This is so very different than Vanguard. It seems like Fidelity understands how to handle brokerages from the start. Everything you could possibly need for trading is already in your account. Vanguard does investing well, but then decided to switch everyone to a brokerage account - it seems like a disjointed process to me.
jeffyscott wrote: Sun Aug 01, 2021 4:51 pm ...Fidelity says:
Opening a Fidelity account automatically establishes a core position, used for processing cash transactions and for holding uninvested cash.
https://www.fidelity.com/trading/faqs-a ... ted%20cash.

Perhaps they don't show the settlement account in the list of your "positions" when it has $0? The cash from sale will either go to money market or FDIC account depending on what your "core position" is. If you go to "balances", it won't tell you what the core is, but it should show a line for it, when you expand under "cash available to trade" as: Cash (core) $0.00
I did read Trading FAQs: About Your Account (your link in human readable format), but nothing clicked in my head until I went to my account's "Balance" tab and expanded on the "Total Account Value" entry. Yup, a "Cash (core)" entry was staring at me.

Ready, fire, aim. Trade --> Switch to the Expanded Trade Ticket --> Sell all shares --> Preview Order --> (executed automatically), will appear in my Cash core position in 1 - 2 business days.
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by lazynovice »

When it is time to buy your ETF shares, if you use the app, you will be able to place the order in dollars on the main ticket. On the website, to use fractional shares, go to the “simplified” ticket. That allows you to enter the order in dollars. It is relatively new functionality on the website but has been in the app for a while.

When buying VTI, you will see the bid/ask spread is usually a penny. I place a market order. You whole shares will price at one price and you fractional shares will price at another. It was about half a cent difference but a few weeks ago, a few users here compared notes and the Vanguard ETFs were pricing the same amount for both whole and fractional shares.
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by Ferdinand2014 »

LadyGeek wrote: Sun Aug 01, 2021 6:19 pm ^^^ Thanks! This is so very different than Vanguard. It seems like Fidelity understands how to handle brokerages from the start. Everything you could possibly need for trading is already in your account. Vanguard does investing well, but then decided to switch everyone to a brokerage account - it seems like a disjointed process to me.
jeffyscott wrote: Sun Aug 01, 2021 4:51 pm ...Fidelity says:
Opening a Fidelity account automatically establishes a core position, used for processing cash transactions and for holding uninvested cash.
https://www.fidelity.com/trading/faqs-a ... ted%20cash.

Perhaps they don't show the settlement account in the list of your "positions" when it has $0? The cash from sale will either go to money market or FDIC account depending on what your "core position" is. If you go to "balances", it won't tell you what the core is, but it should show a line for it, when you expand under "cash available to trade" as: Cash (core) $0.00
I did read Trading FAQs: About Your Account (your link in human readable format), but nothing clicked in my head until I went to my account's "Balance" tab and expanded on the "Total Account Value" entry. Yup, a "Cash (core)" entry was staring at me.

Ready, fire, aim. Trade --> Switch to the Expanded Trade Ticket --> Sell all shares --> Preview Order --> (executed automatically), will appear in my Cash core position in 1 - 2 business days.
I hope you aim before you fire! :sharebeer
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by LadyGeek »

^^^ Yes, I was wondering if anybody caught that. :wink: :D

There's nothing like doing this with your own money, especially when you are putting your life's savings on the line. It's a small percentage of what I have, but it's still some serious scratch.

Emotion never appears in any equation, but it can have a large influence on your investing behavior. In some cases, emotion wins out.

I had full confidence on what I was doing until it came time to hit "Trade" and caught that error. Emotions were running high. I felt like a total newbie - even though I have all the theory down to 2 decimal places.

That's why I tell members to always ask questions and don't worry if it's a "simple" question. If you don't know the answer, it's a hard question.

So, I asked for help with a simple question. The answers are much appreciated and I now have a new accomplishment in my investing experience.

Of course, I still have to complete the second transaction. And then there's this small matter of capital gains - the fund gained slightly over the past few days...
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by vtMaps »

Ferdinand2014 wrote: Sun Aug 01, 2021 6:06 pm The standard settlement core is an FDIC account that rotates banks so every time you hit $250,000 it adds a second bank so you are always FDIC insured regardless of the balance.
No, you are not necessarily FDIC insured. Fidelity doesn't know about your non-Fidelity bank accounts. If you already have an account at one of their participating banks, then you may exceed the FDIC limits at that bank.

--vtMaps
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by diy60 »

LadyGeek wrote: Sun Aug 01, 2021 6:19 pm Ready, fire, aim. Trade --> Switch to the Expanded Trade Ticket --> Sell all shares --> Preview Order --> (executed automatically), will appear in my Cash core position in 1 - 2 business days.
Fidelity has an unpublished policy to allow traders to sell cross-family funds and immediately (same day) purchase securities up to 90% of the previous days close price for the affected shares. They then put in an order to automatically execute the next day for the remainder, which may or may not be exactly 10% due to fluctuating market conditions. A person needs to call and ask for the "trading desk" as it requires manual intervention. I did this numerous times when I unwound an AUM mess transferred from another broker. Depending on the amount involved, the effort may or may not be worth it. I'm just replying as a PSA because it worked out for me, but note, my direct experience is a couple of years old.
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by LadyGeek »

^^^ The website wouldn't let me do that. If there's a workaround, that's fine. For my first time trading at Fidelity, I think it's better to start off with the method that's guaranteed to work.
lazynovice wrote: Sun Aug 01, 2021 6:30 pm When it is time to buy your ETF shares, if you use the app, you will be able to place the order in dollars on the main ticket. On the website, to use fractional shares, go to the “simplified” ticket. That allows you to enter the order in dollars. It is relatively new functionality on the website but has been in the app for a while.

When buying VTI, you will see the bid/ask spread is usually a penny. I place a market order. You whole shares will price at one price and you fractional shares will price at another. It was about half a cent difference but a few weeks ago, a few users here compared notes and the Vanguard ETFs were pricing the same amount for both whole and fractional shares.
Thanks! I'll be using the website. I'm guessing this is what's meant by the "fractional share" trading experience and it's how to buy the ETF down to the last penny. Something new for me.
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by lazynovice »

LadyGeek wrote: Sun Aug 01, 2021 6:53 pm ^^^ The website wouldn't let me do that. If there's a workaround, that's fine. For my first time trading at Fidelity, I think it's better to start off with the method that's guaranteed to work.
lazynovice wrote: Sun Aug 01, 2021 6:30 pm When it is time to buy your ETF shares, if you use the app, you will be able to place the order in dollars on the main ticket. On the website, to use fractional shares, go to the “simplified” ticket. That allows you to enter the order in dollars. It is relatively new functionality on the website but has been in the app for a while.

When buying VTI, you will see the bid/ask spread is usually a penny. I place a market order. You whole shares will price at one price and you fractional shares will price at another. It was about half a cent difference but a few weeks ago, a few users here compared notes and the Vanguard ETFs were pricing the same amount for both whole and fractional shares.
Thanks! I'll be using the website. I'm guessing this is what's meant by the "fractional share" trading experience and it's how to buy the ETF down to the last penny. Something new for me.
Yes. But because of rounding, you will probably still have 3-5 cents left even with fractional trades. But it beats up to $200 that could be left without fractional trades.
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by LadyGeek »

Then I won't feel so bad about the $0.05 in my HSA. :)

Actually, I think it's good to keep that $0.05. I'm no longer employed (retired) and if I close the account the HSA is gone forever. I'm planning to stay retired.
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by nalor511 »

diy60 wrote: Sun Aug 01, 2021 6:52 pm
LadyGeek wrote: Sun Aug 01, 2021 6:19 pm Ready, fire, aim. Trade --> Switch to the Expanded Trade Ticket --> Sell all shares --> Preview Order --> (executed automatically), will appear in my Cash core position in 1 - 2 business days.
Fidelity has an unpublished policy to allow traders to sell cross-family funds and immediately (same day) purchase securities up to 90% of the previous days close price for the affected shares. They then put in an order to automatically execute the next day for the remainder, which may or may not be exactly 10% due to fluctuating market conditions. A person needs to call and ask for the "trading desk" as it requires manual intervention. I did this numerous times when I unwound an AUM mess transferred from another broker. Depending on the amount involved, the effort may or may not be worth it. I'm just replying as a PSA because it worked out for me, but note, my direct experience is a couple of years old.
I can confirm this (as of last week)
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by Ferdinand2014 »

vtMaps wrote: Sun Aug 01, 2021 6:51 pm
Ferdinand2014 wrote: Sun Aug 01, 2021 6:06 pm The standard settlement core is an FDIC account that rotates banks so every time you hit $250,000 it adds a second bank so you are always FDIC insured regardless of the balance.
No, you are not necessarily FDIC insured. Fidelity doesn't know about your non-Fidelity bank accounts. If you already have an account at one of their participating banks, then you may exceed the FDIC limits at that bank.

--vtMaps
Actually I believe you are. It’s 250,000 per depositer, per insured bank, per account ownership. So if you have 250,000 at your local bank and then put 300,000 into Fidelity, 250,000 goes into XYZ bank and then the other 50,000 goes into XXX bank.

https://www.fdic.gov/deposit/deposits/faq.html

“The standard insurance amount is $250,000 per depositor, per insured bank, for each account ownership category” I could be misunderstanding, but I believe you can have more then 1 account at 1 bank and be insured if above $250,000 if they are distinct separate accounts?
Last edited by Ferdinand2014 on Sun Aug 01, 2021 7:45 pm, edited 1 time in total.
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by nalor511 »

Ferdinand2014 wrote: Sun Aug 01, 2021 7:37 pm
vtMaps wrote: Sun Aug 01, 2021 6:51 pm
Ferdinand2014 wrote: Sun Aug 01, 2021 6:06 pm The standard settlement core is an FDIC account that rotates banks so every time you hit $250,000 it adds a second bank so you are always FDIC insured regardless of the balance.
No, you are not necessarily FDIC insured. Fidelity doesn't know about your non-Fidelity bank accounts. If you already have an account at one of their participating banks, then you may exceed the FDIC limits at that bank.

--vtMaps
Actually I believe you are. It’s 250,000 per depositer, per insured bank, per account ownership. So if you have 250,000 at your local bank and then put 300,000 into Fidelity, 250,000 goes into XYZ bank and then the other 50,000 goes into XXX bank.

https://www.fdic.gov/deposit/deposits/faq.html

“The standard insurance amount is $250,000 per depositor, per insured bank, for each account ownership category”
Unless your local bank is XXX bank or XYZ bank, is the point.
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by mkc »

LadyGeek wrote: Sun Aug 01, 2021 6:19 pm ^^^ Thanks! This is so very different than Vanguard. It seems like Fidelity understands how to handle brokerages from the start. Everything you could possibly need for trading is already in your account. Vanguard does investing well, but then decided to switch everyone to a brokerage account - it seems like a disjointed process to me.
jeffyscott wrote: Sun Aug 01, 2021 4:51 pm ...Fidelity says:
Opening a Fidelity account automatically establishes a core position, used for processing cash transactions and for holding uninvested cash.
https://www.fidelity.com/trading/faqs-a ... ted%20cash.

Perhaps they don't show the settlement account in the list of your "positions" when it has $0? The cash from sale will either go to money market or FDIC account depending on what your "core position" is. If you go to "balances", it won't tell you what the core is, but it should show a line for it, when you expand under "cash available to trade" as: Cash (core) $0.00
I did read Trading FAQs: About Your Account (your link in human readable format), but nothing clicked in my head until I went to my account's "Balance" tab and expanded on the "Total Account Value" entry. Yup, a "Cash (core)" entry was staring at me.
Do try the Reddit for questions as well for things that don't require personal information. I asked one yesterday afternoon (Saturday) and had an official, complete, comprehensive answer from Fidelity no more than a few hours later. My first experience using their Reddit support and I was shocked at how well it worked.

https://www.reddit.com/r/fidelityinvestments/
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by okwriter »

nalor511 wrote: Sun Aug 01, 2021 7:43 pm
Ferdinand2014 wrote: Sun Aug 01, 2021 7:37 pm Actually I believe you are. It’s 250,000 per depositer, per insured bank, per account ownership. So if you have 250,000 at your local bank and then put 300,000 into Fidelity, 250,000 goes into XYZ bank and then the other 50,000 goes into XXX bank.

https://www.fdic.gov/deposit/deposits/faq.html

“The standard insurance amount is $250,000 per depositor, per insured bank, for each account ownership category”
Unless your local bank is XXX bank or XYZ bank, is the point.
Fidelity pretty much confirms this in a footnote:
At a minimum, there are five banks available to accept these deposits, making customers eligible for nearly $1,250,000 of FDIC insurance. If the number of available banks changes, or you elect not to use, and/or have existing assets at, one or more of the available banks, the actual amount could be higher or lower.
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by Northern Flicker »

The higher turnover rate of VTSAX is not indicative of lower tax efficiency. ETFs and Vanguard index funds that have ETF share classes have mechanisms of avoiding capital gains distributions that mutual funds without ETF share classes lack.
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by rgs92 »

If an international exposure is desired, Fidelity's zero-expense total international index fund FZILX is a relative bargain compared to Vanguard's VTIAX which has an ER of .11%. (Also note that VXUS, the corresponding Vanguard ETF, has an ER of .08%).
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by Whakamole »

lazynovice wrote: Sun Aug 01, 2021 6:30 pm When it is time to buy your ETF shares, if you use the app, you will be able to place the order in dollars on the main ticket. On the website, to use fractional shares, go to the “simplified” ticket. That allows you to enter the order in dollars. It is relatively new functionality on the website but has been in the app for a while.

When buying VTI, you will see the bid/ask spread is usually a penny. I place a market order. You whole shares will price at one price and you fractional shares will price at another. It was about half a cent difference but a few weeks ago, a few users here compared notes and the Vanguard ETFs were pricing the same amount for both whole and fractional shares.
Wow... that new functionality is fantastic. I've always bought my mutual funds in dollars, being able to buy ETFs in dollars as well is exactly what I need to just move to ETFs.
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by whodidntante »

Enable margin.
Then on the same trading day, buy ETFs on margin, and sell mutual funds.
Due to settlement times, you won't owe any interest.
Or keep your cash account and just not worry about being out of the market for a day.
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by nedsaid »

The big adventure. Lady Geek learns to trade at Fidelity Brokerage. How will this story turn out? Sort of like watching the weekly matinee at the theatre where our heroine is tied up on the railroad tracks and the train rounds the bend. . .the credits come up and the movie ends. Got to come back next week folks to see the next segment of The Perils of Lady Geek Placing a Trade at Fidelity Brokerage. The suspense is just killing me.

For those of you younger than me, this is sort of like Oak Island. The metal detector gets a signal. Could it be? OMG! It might be! The lost treasure of the Knight's Templar!! OMG!! After the break, they find it was a roofing nail. . . .from the 1300s.

Could it be? OMG? It might be! Can Lady Geek execute her first brokerage trade? Find out after the break.

Yes, folks. This is what passes for excitement on the Bogleheads! After the trade is successfully executed, expect a barnstorming book tour. I want to be the first with an autographed copy. Who knew investing could be so exciting! :wink:
Last edited by nedsaid on Mon Aug 02, 2021 10:21 am, edited 1 time in total.
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by mapleosb »

nedsaid wrote: Sun Aug 01, 2021 11:01 pm Yes, folks. This is what passes for excitement on the Bogleheads! After the trade is successfully executed, expect a barnstorming book tour. I want to be the first with an autographed copy. Who knew investing could be so exciting! :wink:
Sometimes, you folks just break me up :D Thanks for starting the week off with a laugh.
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by Jack FFR1846 »

Some may remember 3 years ago, where I split my Fidelity total US market position in 2. Remember that FSKAX was brand new, after Fidelity discarded it's multiple total US market funds based on minimum investment, with different ERs. So half in FSKAX and half in FZROX. For that period of one year, for my account, FZROX had more in it. My purpose for the exercise was to choose for myself which fund to use in my tIRA. So 2 years ago, I sold out FSKAX and moved it all to FZROX.

Besides instilling confidence (for me), I also concluded that it simply doesn't matter. So today, my US stock positions over various accounts holds FZROX, VTI, SCHB, SPTM, SWPPX, FXAIX and (wait for it) BRK/b. They all work fine and allow ease of tax loss harvesting.

I get that one can chart and plot and get to 6 digit accuracy and convince ones self that there is some superior method. I note that Paul Merriman does this all the time, but then when his method gets plotted against 9 others including where an ant lands on a chart of funds, his method is often last. For me, my choices are "close enough".
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jmanter
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Re: Fidelity Total Market in taxable - FZROX (ZERO) vs. FSKAX (Total Market) SmackDown

Post by jmanter »

indexfundfan wrote: Sun Aug 01, 2021 10:17 am With a 0.015% ER FSKAX, I see no reason to get into the very slightly cheaper non-portable FZROX in a taxable account. In an IRA, maybe.

But the better option for me would be to put the money into an ETF, easily transferrable between different brokerages. Fidelity also lets you invest in fractional shares so you can fully invest the last dollar if that is a concern.
The only issue is that ETF investments can't be automated. I use ETFs in my taxable because of the tax efficiency, but I do wish I could "set it and forget it" instead of investing manually twice a month.
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