Difference between revisions of "User:Lexor/Fidelity"

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The building blocks of Boglehead-style investing are low-[[Expense ratios |expense-ratio]] [[Indexing |index]] mutual funds and/or [[Exchange Traded Funds |ETFs]]. Fidelity offers the lowest cost index funds in the industry including 4 zero cost index funds and commission free ETFs. In recent years, Fidelity's offering is more tailored to the [[Bogleheads Investment Philosophy | Boglehead philosophy]] than even Vanguard. The distinction is that Vanguard offers a wider variety of more narrow index funds and ETFs at higher costs (although not as many as Blackrock's iShares).
 
The building blocks of Boglehead-style investing are low-[[Expense ratios |expense-ratio]] [[Indexing |index]] mutual funds and/or [[Exchange Traded Funds |ETFs]]. Fidelity offers the lowest cost index funds in the industry including 4 zero cost index funds and commission free ETFs. In recent years, Fidelity's offering is more tailored to the [[Bogleheads Investment Philosophy | Boglehead philosophy]] than even Vanguard. The distinction is that Vanguard offers a wider variety of more narrow index funds and ETFs at higher costs (although not as many as Blackrock's iShares).
  
Here are some notes on how to do Bogglehead style investing at Fidelity. Writers have striven for accuracy, but investors should verify information before taking action. Fidelity also provides [https://www.fidelity.com/mutual-funds/investing-ideas/index-funds a comparison] of its funds to Vanguard.  
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Here are some notes on how to do Boglehead style investing at Fidelity. Writers have striven for accuracy, but investors should verify information before taking action. Fidelity also provides [https://www.fidelity.com/mutual-funds/investing-ideas/index-funds a comparison] of its funds to Vanguard.
  
 
==Tools for Boglehead-style investing==
 
==Tools for Boglehead-style investing==

Revision as of 13:50, 31 January 2020

Fidelity Investments Inc
Founded1946; 74 years ago (as Fidelity Management & Research)
HeadquartersBoston, Massachusetts, U.S.

with offices in

United States:
Boston, Massachusetts; Merrimack, New Hampshire; Smithfield, Rhode Island; Westlake, Texas; Covington, Kentucky; Durham, North Carolina; Albuquerque, New Mexico; Cincinnati, Ohio; Salt Lake City, Utah; Jacksonville, Florida; Greenwood Village, Colorado; and American Fork, Utah

Canada:
Toronto, Montreal, Calgary and Vancouver

Europe:
Dublin, Galway

Asia / Pacific:

Hong Kong, Tokyo, Mumbai
ProductsMutual funds
Brokerage services
529 plans
Health Savings Account (HSA)
ABLE plans
Credit cards
Collective Investment Trusts
Annuity subaccounts
AUMUS$2.46 trillion
Employees50,000+

Fidelity Investments Inc is a Boston-based mutual fund and financial services company and Vanguard's biggest competitor.

 "It's what I would do if I were Fidelity...I don't see that there is a really good competitive response...a winning response (for Vanguard)." -Jack Bogle, October 2018 on Fidelity ZERO cost index funds [1]

In recent years Fidelity has been notable for offering the lowest cost mutual funds, the first and only zero expense ratio index funds, commission free ETFs, no investment minimums and one of the first brokers to offer partial share investing. Fidelity was also one of the first brokers to combine it's Institutional Premium class funds with Retail class funds and did so more completely than competitors like Vanguard. This resulted in individual investors having access to funds with extremely low expense ratios, well below what is available to individual investors at Vanguard, even compared to the $3,000-minimum Admiral Class shares.

Boglehead-style investing at Fidelity

The building blocks of Boglehead-style investing are low-expense-ratio index mutual funds and/or ETFs. Fidelity offers the lowest cost index funds in the industry including 4 zero cost index funds and commission free ETFs. In recent years, Fidelity's offering is more tailored to the Boglehead philosophy than even Vanguard. The distinction is that Vanguard offers a wider variety of more narrow index funds and ETFs at higher costs (although not as many as Blackrock's iShares).

Here are some notes on how to do Boglehead style investing at Fidelity. Writers have striven for accuracy, but investors should verify information before taking action. Fidelity also provides a comparison of its funds to Vanguard.

Tools for Boglehead-style investing

  • Fidelity offers the lowest expense ratios in the industry, well below Vanguard [2]
  • Fidelity funds have higher tracking precision to their benchmarks than Vanguard funds (lower tracking error) [3]
  • Fidelity offers 4 ZERO Index Funds with a 0.00% expense ratio, the Fidelity ZERO Total Market Index Fund and the Fidelity ZERO International Index Fund, Fidelity Large Cap ZERO Index Fund and Fidelity Extended Market ZERO Index Fund. These funds track proprietary Fidelity indexes.[4]
  • Fidelity offers commission free trades on individual stocks and ETF's
  • Fidelity offers no-commission trades on individual stocks and ETF's.
  • Fidelity eliminated the minimum investment requirement on all it's mutual funds and allows partial share investing of ETFs and stocks
  • Fidelity no longer lists a charge for short-term sales of its funds; however, all ETF sales are subject to an activity assessment fee (from $0.01 to $0.03 per $1,000 of principal.)
  • 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.

General Strategy for Boglehead-style investing

  • In tax exempt accounts hold Fidelity index funds.
  • In taxable accounts hold ETFs from iShares, Schwab, State Street or Vanguard and leverage Fidelity's partial share investing capability, which allows you to invest by dollar amount rather than number of shares. [5]

Fidelity vs Vanguard vs Schwab Index Funds

  • This table shows the rough correspondence between Fidelity, Vanguard and Schwab mutual funds. The lowest expense ratios are in bold. In many cases they track different indexes so they are not precisely equivalent, however they are very similar. Bond funds have different durations and therefore interest risk. Other tickers can be found in the appendix to the press release.
Fidelity Vanguard Schwab Fidelity ER Vanguard ER Schwab ER
Fidelity ZERO Large Cap Index Fund (FNILX) or Fidelity 500 Index Fund (FXAIX) Vanguard 500 Index Admiral (VFIAX) Schwab S&P 500 Index Fund .000% or .015% .040% .020%
Fidelity ZERO Total Market Index Fund (FZROX) or Fidelity Total Market Index Fund (FSKAX) Vanguard Total Stock Mkt Index Admiral (VTSAX) Schwab Total Stock Market Index Fund (SWTSX) .000% or .015% .040% .030%
Fidelity ZERO Extended Market Index Fund (FZIPX) or Fidelity Extended Market Index Fund (FSMAX) Vanguard Extended Market Index Admiral (VEXAX) SWMCX (~49%) + SWSSX (~51%) .000% or .045% .070% .040%
Fidelity Large Cap Growth Index Fund (FSPGX) Vanguard Growth Index Admiral (VIGAX) Schwab U.S. Large-Cap Growth Index Fund (SWLGX) .035% .050% .035%
Fidelity Large Cap Value Index Fund (FLCOX) Vanguard Value Index Admiral (VVIAX) Schwab U.S. Large-Cap Value Index Fund (SWLVX) .035% .050% .035%
Fidelity Mid Cap Index Fund (FSMDX) Vanguard Mid Cap Index Admiral (VIMAX) Schwab U.S. Mid-Cap Index Fund (SWMCX) .025% .050% .040%
Fidelity Mid Cap Growth Index Fund (FMDGX) Vanguard Mid-Cap Growth Index Admiral (VMGMX) No Equivalent .050% .070% N/A
Fidelity Mid Cap Value Index Fund (FIMVX) Vanguard Mid-Cap Value Index Admiral (VMVAX) No Equivalent .050% .070% N/A
Fidelity Small Cap Index Fund (FSSNX) Vanguard Small Cap Index Admiral (VSMAX) Schwab Small-Cap Index Fund (SWSSX) .025% .050% .040%
Fidelity Small Cap Growth Index Fund(FECGX) Vanguard Small-Cap Growth Index Admiral (VSGAX) No Equivalent .050% .070% N/A
Fidelity Small Cap Value Index Fund (FISVX) Vanguard Small-Cap Value Index Admiral (VSIAX) No Equivalent .050% .070% N/A
Fidelity International Index Fund (FSPSX) Vanguard Developed Markets Index Admiral (VTMGX) Schwab International Index Fund (SWILSX) .035% .070% .060%
Fidelity Global ex US Index Fund (FSGGX) Vanguard FTSE All-Wld ex-US Index Admiral (VFWAX) No Equivalent .056% .110% N/A
Fidelity ZERO International Index Fund (FZILX) or Fidelity Total Intl Index Fund (FTIHX) Vanguard Total Intl Stock Index Admiral (VTIAX) No Equivalent .000% or .060% .110% N/A
Fidelity Emerging Markets Index Fund (FPADX) Vanguard Emerging Mkts Stock Index Admiral (VEMAX) Schwab Emerging Markets Equity ETF (SCHE) .076% .140% .130%
Fidelity Real Estate Index Fund (FSRNX) Vanguard Real Estate Index Admiral (VGSLX) Schwab US REIT ETF .070% .120% .070%
Fidelity US Bond Index Fund (FXNAX) Vanguard Total Bond Market Index Admiral (VBTLX) Schwab US Aggregate Bond Index Fund (SWAGX) .025% .050% .040%
Fidelity Municipal Bond Index Fund (FMBIX) Vanguard Tax-Exempt Bond Index Admiral (VTEAX) No equivalent .070% .090% N/A
Fidelity Short-Term Treasury Bd Index Fund (FUMBX) Vanguard Short-Term Treasury Index Admiral (VSBSX) Schwab Short-Term US Treasury ETF (SCHR) .030% .070 .050%
Fidelity Intermediate Trs Bd Index Fund (FUAMX) Vanguard Intermediate-Term Treasury Index Admiral (VSIGX) Schwab Intermediate-Term US ETF (SCHR) .030% .070% .050%
Fidelity Long-Term Treasury Bd Index Fund (FNBGX) Vanguard Long-Term Treasury Index Admiral (VLGSX) Schwab Long-Term US ETF (SCHQ) .030% .030% .050%
Fidelity Short-Term Bond Index Fund (FNSOX) Vanguard Short Term Bond Index Admiral (VBIRX) Schwab Short-Term Index Fund (SWSBX) .030% .070% .060%
Fidelity U.S. Sustainability Index Fund (FITLX) Vanguard FTSE Social Index Fund Admiral (VFTAX) No equivalent .110% .140% N/A
Fidelity International Bond Index Fund (FBIIX) Vanguard Total International Bond Index Fund (VTABX) No equivalent .060% .110% N/A
Fidelity Inflation-Protected Bond Index Fund (FIPDX) Vanguard Inflation Protected Securities Fund (VAIPX) Schwab US TIPS ETF (SCHP) .050% .100% .050%
Fidelity Freedom Index Funds (Various)* Vanguard Target Retirement Funds (Various)* Schwab Target Index Funds (Various)* .120% .130% .080%
* When investing in target-date funds, go by the fund's composition (asset allocation), not the date. Also see: Vanguard target retirement funds.

ETFs at Fidelity

  • This table shows the rough correspondence between Blackrock, Vanguard and Schwab ETFs that can be purchased comission free at Fidelity. In many cases they track different indexes so they are not precisely equivalent, however they are very similar. The lowest expense ratios are in bold, but keep in mind the importance of tax efficiency in a taxable account.[Note 1] ITOT followed by VTI are two of the most tax efficient funds you can hold in your taxable account.

TODO - Table of ETFs

HSA, 529 and ABLE Accounts

In these products - which are often abused with extremely high expenses - Fidelity has arguably the most compelling offering in the industry. You can use low cost Fidelity index funds in your HSA and ABLE accounts and Fidelity does not charge any additional fees.

Notes

  1. The fiscal year history of per share dividend and capital gains distributions from Fidelity, Vanguard, and Schwab index funds are available on spreadsheets published on the site blog. See Vanguard funds: per share distributions and Fidelity and Schwab index funds: per share distributions.

References