Fidelity: Difference between revisions

From Bogleheads
(Corrected expense ratios)
Line 12: Line 12:
* Don't overlook the [https://www.fidelity.com/etfs/ishares-view-all 70 iShares ETFs] for which Fidelity offers free online trades. They satisfy the criteria of "low-cost index ETFs" that cover most asset classes an ordinary investor would need.  A $7.95 short-term trading fee is assessed if you sell one of these funds within 30 days of buying it; for details see [https://www.fidelity.com/etfs/ishares-faqs Fidelity's FAQ].  
* Don't overlook the [https://www.fidelity.com/etfs/ishares-view-all 70 iShares ETFs] for which Fidelity offers free online trades. They satisfy the criteria of "low-cost index ETFs" that cover most asset classes an ordinary investor would need.  A $7.95 short-term trading fee is assessed if you sell one of these funds within 30 days of buying it; for details see [https://www.fidelity.com/etfs/ishares-faqs Fidelity's FAQ].  


* Don't overlook the Fidelity Index mutual funds (formerly called Spartan funds). These are Fidelity's counterpart to Vanguard, very-low-expense-ratio index funds. The minimum required to invest in Investor-class mutual funds is $2,500 per fund. Broadly, Investor Class funds have expense ratios that are competitive with Vanguard's Investor Class. Fidelity's Premium Class funds have a minimum to invest of $10,000 and are competitive with Vanguard's Admiral class. A full list of their index funds can be found at [https://www.fidelity.com/mutual-funds/fidelity-funds/why-index-funds]  
* Don't overlook the Fidelity Index mutual funds (formerly called Spartan funds). These are Fidelity's counterpart to Vanguard, very-low-expense-ratio index funds. The minimum required to invest in Investor-class mutual funds is $2,500 per fund. Broadly, Investor Class funds have expense ratios that are competitive with Vanguard's Investor Class. Fidelity's Premium Class funds have a minimum to invest of $10,000 and are competitive with Vanguard's Admiral class. A full list of their index funds can be found at [https://www.fidelity.com/mutual-funds/fidelity-funds/why-index-funds Fidelity Index Funds]  
* As of January 2013, Fidelity "Premium" shares (formerly called Advantage) with lower expense ratios are available at a $10,000 minimum, the same minimum investment required for the Vanguard  Admiral Class index funds. This table shows the rough correspondence between Vanguard Admiral funds and their Fidelity Index Premium-class counterparts, but ''in many cases they track different indexes and are not precisely equivalent''. (See the appropriate asset class article in '''[[:Category:Index returns |index returns]]''' for historical return comparisons among various indexes.)
* As of January 2013, Fidelity "Premium" shares (formerly called Advantage) with lower expense ratios are available at a $10,000 minimum, the same minimum investment required for the Vanguard  Admiral Class index funds. This table shows the rough correspondence between Vanguard Admiral funds and their Fidelity Index Premium-class counterparts, but ''in many cases they track different indexes and are not precisely equivalent''. (See the appropriate asset class article in '''[[:Category:Index returns |index returns]]''' for historical return comparisons among various indexes.)



Revision as of 17:23, 29 June 2016

Fidelity Investments is the marketing name for FMR LLC, a giant Boston-based mutual fund company and financial supermarket, and Vanguard's biggest competitor in recent years. [1] Fidelity is sometimes credited with transforming the mutual fund business from a stodgy conservative world of funds managed by committee into the model of active funds managed by stock-picking superstar managers.

Boglehead-style investing at Fidelity

The building blocks of Boglehead-style investing are low-expense-ratio index mutual funds and/or ETFs. Vanguard fans would suggest that Vanguard has the best and most complete lineup of such funds, and that the most convenient place to hold Vanguard mutual funds is directly at Vanguard. Thus, the Bogleheads forum and Wiki tends to be Vanguard-oriented. But investing according to the Boglehead philosophy certainly does not require you to invest at Vanguard or use Vanguard products. Here are some notes on how to do it at Fidelity.

Writers have striven for accuracy, but investors should verify information before taking action.

Tools for Boglehead-style investing

  • Don't overlook the 70 iShares ETFs for which Fidelity offers free online trades. They satisfy the criteria of "low-cost index ETFs" that cover most asset classes an ordinary investor would need. A $7.95 short-term trading fee is assessed if you sell one of these funds within 30 days of buying it; for details see Fidelity's FAQ.
  • Don't overlook the Fidelity Index mutual funds (formerly called Spartan funds). These are Fidelity's counterpart to Vanguard, very-low-expense-ratio index funds. The minimum required to invest in Investor-class mutual funds is $2,500 per fund. Broadly, Investor Class funds have expense ratios that are competitive with Vanguard's Investor Class. Fidelity's Premium Class funds have a minimum to invest of $10,000 and are competitive with Vanguard's Admiral class. A full list of their index funds can be found at Fidelity Index Funds
  • As of January 2013, Fidelity "Premium" shares (formerly called Advantage) with lower expense ratios are available at a $10,000 minimum, the same minimum investment required for the Vanguard Admiral Class index funds. This table shows the rough correspondence between Vanguard Admiral funds and their Fidelity Index Premium-class counterparts, but in many cases they track different indexes and are not precisely equivalent. (See the appropriate asset class article in index returns for historical return comparisons among various indexes.)


Vanguard Fund Similar Fidelity Index Fund Commission-free iShares ETF Notes
US Stocks
Vanguard Total Stock Market Index Fund (VTSAX) Fidelity Total Market Index Fund (FSTVX) Core S&P Total U.S. Stock Market (ITOT) Fidelity tracks the Dow Jones US Total Stock Market Index. Vanguard tracks the CRSP Total Market Index.
Vanguard 500 Index Fund (VFIAX) Fidelity 500 Index Fund (FUSVX) Core S&P 500 (IVV) Funds track the S&P 500 index.
Vanguard Extended Market Index Fund (VEXAX) Fidelity Extended Market Index Fund (FSEVX) Not available Extended market index funds are intended to be mixed with a 500 Index fund to approximate the total market. Fidelity tracks the Dow Jones U.S. Completion Total Stock Market Index [2] Vanguard tracks the S&P Completion Index.
Vanguard Mid Cap Index Fund (VIMAX) Fidelity Mid Cap Index Fund (FSCKX) Core S&P Mid-Cap (IJH) Fidelity tracks the Russell Mid Cap Index. Vanguard tracks the CRSP US Mid Cap Index.
Vanguard Small Cap Index Fund (VSMAX) Fidelity Small Cap Index Fund (FSSVX) Core S&P Small-Cap (IJR) Fidelity tracks the Russell 2000 Index . Vanguard tracks the CRSP US Small Cap Index Index [3]
Vanguard REIT Index Fund (VGSLX) Fidelity Real Estate Index Fund (FSRVX) Dow Jones U.S. Real Estate Index (IYR) Fidelity tracks the Dow Jones U.S. Select Real Estate Securities Index. Vanguard tracks the MSCI US REIT Index.
International Stocks
Vanguard Total International Stock Index (VTIAX) Fidelity Total International Index Fund (FTIPX) Core MSCI Total International Stock (IXUS) Vanguard: Tracks FTSE Global All Cap ex US Index, includes small caps. Fidelity: Tracks MSCI ACWI (All Country World Index) ex USA Investable Market Index, includes small caps.
Vanguard Developed Markets Index Fund (VTMGX) [4] Fidelity International Index Fund (FSIIX/FSIVX) Core MSCI EAFE (IEFA) Fidelity: Tracks MSCI EAFE Index (Morgan Stanley Capital International Europe, Australasia, Far East Index). The Vanguard fund tracks the FTSE Developed All Cap ex US Index.
Vanguard Emerging Markets Index Fund (VEMAX) Fidelity Emerging Markets Index Fund (FPMAX) Core MSCI Emerging Markets (IEMG) Fidelity tracks the FTSE Emerging Index. Vanguard currently tracks the FTSE Emerging Markets All Cap China A Inclusion Index.
US Bonds
Vanguard Short-Term Treasury Bond Fund (VFISX) Fidelity Short-Term Treasury Bond Index Fund (FSBAX) Barclays 1-3 Year Treasury Bond (SHY) Vanguard: Not an index fund
Vanguard Intermediate-Term Treasury Fund (VFITX) Fidelity Intermediate Treasury Bond Index Fund (FIBAX) Barclays 7-10 Year Treasury Bond (IEF) Vanguard: Not an index fund.
Vanguard Inflation Protected Securities Fund (VIPSX) Fidelity Inflation-Protected Bond Index Fund (FSIYX) Barclays TIPS Bond (TIP) Vanguard: Not an index fund.
Vanguard Long-Term Treasury Bond Fund (VUSTX) Fidelity Long-Term Treasury Bond Index Fund (FLBAX) Barclays 20+ Year Treasury Bond (TLT) Vanguard: Not an index fund
Vanguard Total Bond Market Index Fund (VBTLX) Fidelity U.S. Bond Index Fund (FSITX) Core Total U.S. Bond Market (AGG) Fidelity tracks the Barclays Capital U.S. Aggregate Bond Index. Vanguard tracks the Barclays Capital U.S. Aggregate Float Adjusted Index.
Balanced Funds
Vanguard Target Retirement Funds Fidelity Freedom® Index Funds Not available The expense ratios are comparable. Go by the fund's composition (asset allocation), not the date. Also see: Vanguard target retirement funds.
  • Fidelity Four-In-One Index Fund is an interesting possibility for a beginner's fund, with a low 0.12% expense ratio. It is a fund-of-funds, all index funds, with about 60% total domestic stock market (in two funds), 25% international, and 15% bonds.


  • The transaction fees to buy Vanguard mutual funds at Fidelity are quite high --$75 for the first purchase, but subsequent purchases can be $5 per purchase if you set up an automatic investment plan. In addition, Vanguard has ETF equivalents for most of its index funds. Like other stocks and ETFs, Vanguard ETFs can be bought and sold at Fidelity for around $7.95--but check Fidelity for current fee details which may vary depending on your account size. If you want to use actual Vanguard products, using Vanguard ETF's is probably the cheapest way to do so at Fidelity.
  • Fidelity offers individual treasury bonds (both nominal and TIPS) at auction free of commission or any markup or fees if you place your orders online. There is no limit on account size. No separate account is needed. The minimum purchase is $1,000.

Fidelity tips, links, and general orientation

The default account at Fidelity is a full-featured brokerage account. You can buy mutual funds (Fidelity and non-Fidelity funds), ETFs, individual stocks, bonds, brokered CDs, along with options and precious metals, all within the same Fidelity account. As of April 2015:

  • Fund Picks From Fidelity® screens selections for funds Fidelity wants you to know about. The funds meet certain selection criteria, such as no transaction fees (see website for details) or having a high historical risk-adjusted return.

See also

References

  1. Vanguard's major competitors in Exchange Traded Funds are Blackrock ishares and State Street.
  2. See, Dow Jones US Total Stock Market Indexes Literature.
  3. Vanguard also offers the Vanguard Russell 2000 ETF.
  4. The fund is also available as the Vanguard FTSE Developed Markets ETF