Difference between revisions of "User:Lexor/Fidelity"

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Revision as of 21:49, 15 February 2020

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

with regional 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
RevenueUS$18.2 billion
AUMUS$2.46 trillion
Total assetsUS$6.7 trillion (total customer assets)
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 its 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.

Boglehead philosophy leverages low cost broad index funds. Fidelity has the lowest cost broad market index funds while Vanguard offers 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 ETFs
  • Fidelity eliminated the minimum investment requirement on all its 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]

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.
Fund Class Fund Name Ticker ER Index Tracked
US Stocks
Total US Stock Market Fidelity ZERO Total Market Index Fund FZROX 0.00% Fidelity U.S. Total Investable Market Index
Fidelity Total Market Index Fund FSKAX 0.015% Dow Jones US Total Stock Market Index
iShares Core S&P Total U.S. Stock Market ETF ITOT 0.03% S&P Total Market Index
Schwab Total Stock Market Index Fund SWTSX 0.03% Dow Jones U.S. Total Stock Market Index
Vanguard Total Stock Market Index Fund VTSAX 0.04% CRSP Total Market Index
S&P 500 Fidelity 500 Index Fund FXAIX 0.015% S&P 500
Schwab 500 Index Fund SWPPX 0.02% S&P 550
Vanguard 500 Index Fund VFIAX 0.04% S&P 500
iShares Core S&P 500 ETF IVV 0.04% S&P 500
Large Cap Fidelity ZERO Large Cap Index Fund FNILX 0.00% Fidelity U.S. Large Cap Index
Schwab U.S. Large-Cap ETF SCHX 0.03% Dow Jones U.S. Large-Cap Total Stock Market Index
Vanguard Large Cap Index Fund VLCAX 0.05% CRSP Large Cap Index
Large Cap Growth Fidelity Large Cap Growth Index Fund FSPGX 0.035% Russell 1000 Growth Index
Schwab Large Cap Growth Index Fund SWLGX 0.035% Russell 1000 Growth Index
Ishares Core S&P Large Growth ETF IUSG 0.04% S&P 900 Growth Index
Vanguard Growth Index VIGAX 0.07% CRSP Large Cap Growth Index
Large Cap Value Fidelity Large Cap Value Index Fund FLCOX 0.035% Russell 1000 Value Index
Schwab U.S. Large-Cap Value Index Fund SWLVX 0.035% Russell 1000 Value Index
Ishares Core S&P Large Value ETF IUSV 0.04% S&P 900 Value Index
Vanguard Value Index VVIAX 0.07% CRSP Large Cap Value Index
Extended Market Fidelity Zero Extended Market Index Fund FZIPX 0.00% Fidelity U.S. Extended Investable Market Index
Fidelity Extended Market Index Fund FSMAX 0.045% Dow Jones U.S. Completion Total Stock Market Index [6]
Vanguard Extended Market Index Fund VEXAX 0.08% S&P Completion Index
Mid Cap Fidelity Mid Cap Index Fund FSMDX 0.025% Russell Mid Cap Index
Schwab US Mid Cap Index Fund SWMCX 0.04% Russell Mid Cap Index
Vanguard Mid Cap Index Fund VIMAX 0.05% CRSP US Mid Cap Index
iShares Core S&P Mid-Cap ETF IJH 0.07% S&P MidCap 400 Index
Mid Cap Growth Fidelity Mid Cap Growth Index Fund FMGDX 0.05% Russell Mid Cap Growth Index
Vanguard Mid Cap Growth Index Fund VMGMX 0.07% CRSP US Mid Cap Growth Index
iShares Mid-Cap Growth ETF IWP 0.24% Russell Mid Cap Growth Index
Mid Cap Value Fidelity Mid Cap Value Index Fund FIMVX 0.05% Russell Mid Cap Value Index
Vanguard Mid Cap Value Index Fund VMVAX 0.07% CRSP US Mid Cap Value Index
iShares Mid-Cap Growth ETF IWS 0.24% Russell Mid Cap Growth Index
Small Cap Fidelity Small Cap Index Fund FSSNX 0.025% Russell 2000 Index
Schwab US Small Cap Index Fund SWSSX 0.04% Russell 2000 Index
Vanguard Small Cap Index Fund VSMAX 0.05% CRSP US Small Cap Index Index [7]
iShares Core S&P Small-Cap ETF IJR 0.07% S&P Small Cap 600 Index
Small Cap Growth Fidelity Small Cap Growth Index Fund FECGX 0.05% Russell 2000 Growth Index
Vanguard Small Cap Growth Index Fund VSGAX 0.07% CRSP US Small Cap Growth Index
iShares S&P Small-Cap Growth ETF IJT 0.25% S&P Small Cap 600 Growth(R) Index
Small Cap Value Fidelity Small Cap Value Index Fund FISVX 0.05% Russell 2000 Value Index
Vanguard Small Cap Value Index Fund VSIAX 0.07% CRSP US Small Cap Value Index
iShares S&P Small-Cap Value ETF IJS 0.25% S&P Small Cap 600 Value(R) Index
Real Estate Fidelity Real Estate Index Fund FSRNX 0.07% Dow Jones U.S. Select Real Estate Securities Index
Schwab U.S. REIT ETF SCHH 0.07% Dow Jones U.S. Select REIT Index
Fidelity MSCI Real Estate Index ETF FREL 0.084% MSCI USA IMI Real Estate Index
iShares Core U.S. REIT ETF USRT 0.08% FTSE NAREIT Equity REITS Index
Vanguard Real Estate Index Fund VGSLX 0.12% MSCI US Investable Market Real Estate 25/50 Index
International Stocks
Total International Stock Market Fidelity ZERO International Index Fund FZILX 0.00% Fidelity Global ex US Index (excludes small caps)
Fidelity Total International Index Fund FTIHX 0.06% MSCI ACWI ex USA IMI Index
iShares Core MSCI Total International Stock ETF IXUS 0.10% MSCI ACWI ex USA IMI Index
Vanguard Total International Stock Index VTIAX 0.11% FTSE Global All Cap ex US Index
Developed Markets [note 1] Fidelity International Index Fund FSPSX 0.045% MSCI EAFE Index (excludes small caps)
iShares Core MSCI International Developed Markets ETF IDEV 0.05% MSCI WORLD ex USA IMI Index
Schwab International Stock Index Fund SWISX 0.06% MSCI EAFE Index
Vanguard Developed Markets Index Fund VTMGX 0.07% FTSE Developed All Cap ex US Index
iShares Core MSCI EAFE IEFA 0.08% MSCI EAFE IMI Index
Emerging Markets Fidelity Emerging Markets Index Fund FPADX 0.08% MSCI Emerging Markets Index (excludes small caps)
Schwab Emerging Markets ETF SCHE 0.13% FTSE Emerging Index
Vanguard Emerging Markets Index Fund VEMAX 0.14% FTSE Emerging Markets All Cap China A Inclusion Index
iShares Core MSCI Emerging Markets IEMG 0.14% MSCI Emerging Markets IMI Index
US Bonds
Short-Term Treasury Fidelity Short-Term Treasury Bond Index Fund FUMBX 0.03% Bloomberg Barclays 1-5 Year U.S. Treasury Index
Schwab Short-Term Treasury ETF SCHO 0.05% Bloomberg Barclays US Treasury 1-3 Year Inde
Vanguard Short-Term Treasury Index Fund VSBSX 0.07% Bloomberg Barclays US Treasury 1–3 Year Bond Index
iShares 1-3 Year Treasury Bond ETF SHY 0.15% ICE U.S. Treasury 1-3 Year Bond Index
Intermediate-Term Treasury Fidelity Intermediate Treasury Bond Index Fund FUAMX 0.03% Bloomberg Barclays 5-10 Year U.S. Treasury Bond Index
Schwab Intermediate-Term Treasury ETF SCHR 0.05% Bloomberg Barclays US Treasury 3-10 Year Index
Vanguard Intermediate-Term Treasury Index Fund VSIGX 0.07% Bloomberg Barclays US Treasury 3–10 Year Bond Index
iShares 3-7 Year Treasury Bond ETF IEI 0.15% ICE U.S. Treasury 3-7 Year Bond Index
iShares 7-10 Year Treasury Bond ETF IEF 0.15% ICE U.S. Treasury 7-10 Year Bond Index
TIPS Fidelity Inflation-Protected Bond Index Fund FIPDX 0.05% Bloomberg Barclays U.S. TIPS Index
Schwab U.S. TIPS ETF SCHP 0.05% Bloomberg Barclays US Treasury Inflation-Linked Bond Index (Series-L)
Vanguard Inflation Protected Securities Fund VAIPX 0.10% [note 2] Not an index fund
iShares TIPS Bond ETF TIP 0.20% Bloomberg Barclays U.S. TIPS Index
Long-Term Treasury Fidelity Long-Term Treasury Bond Index Fund FNBGX 0.03% Bloomberg Barclays US Long Treasury Bond Index
Schwab Long-Term U.S. Treasury ETF SCHQ 0.05% Bloomberg Barclays US Long Treasury Index
Vanguard Long-Term Treasury Index Fund VLGSX 0.07% Bloomberg Barclays U.S. Long Treasury Index
iShares 20+ Year Treasury Bond ETF TLT 0.15% ICE U.S. Treasury 20+ Year Bond Index
Aggregate Bond Fidelity U.S. Bond Index Fund FXNAX 0.025% Bloomberg Barclays U.S. Aggregate Bond Index
Schwab U.S. Aggregate Bond Index Fund SWAGX 0.04% Bloomberg Barclays US Aggregate Bond Index
Vanguard Total Bond Market Index Fund VBTLX 0.05% Bloomberg Barclays U.S. Aggregate Float Adjusted Index
iShares Core U.S. Aggregate Bond ETF AGG 0.05% Bloomberg Barclays US Aggregate Bond Index
International Bonds
ex-US Aggregate Bond Fidelity International Bond Index Fund FBIIX 0.06% Bloomberg Barclays Global Aggregate ex-USD Float Adjusted RIC Diversified Index (USD Hedged)
iShares Core International Aggregate Bond ETF IAGG 0.09% Bloomberg Barclays Global Aggregate ex USD 10% Issuer Capped (Hedged) Index
Vanguard Total International Bond Index Fund VTABX 0.11% Bloomberg Barclays Global Aggregate ex-USD Float-Adjusted Index (Hedged)
Balanced Funds
Target-date funds Fidelity Freedom® Index Funds Various 0.12%
Schwab Target Funds Various 0.08%
Vanguard Target Retirement Funds Various 0.13% - 0.15%
Fixed allocation funds Fidelity Four-in-One Index Fund FFNOX 0.11% 85/15 index fund
Vanguard LifeStrategy VASIX, VSCGX, VSMGX, VASGX 0.11% - 0.14% 20/80 to 80/20 allocations
iShares Core Allocation ETFs AOK, AOM, AOR, AOA 0.25% 30/70 to 80/20 allocations
  1. ↑ FTSE classifies Korea as a developed market, while MSCI classifies it as emerging. Canada is not included in EAFE indexes.
  2. ↑ Admiral Shares class fund has a $50,000 minimum investment. Investor-class fund VIPSX has a 0.20% ER and a $3,000 minimum

ETFs at Fidelity

  • This table shows the rough correspondence between Blackrock, Schwab ETFs, StateStreet and Vanguard that can be purchased commission 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 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.[8][9]

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

  1. ↑ "Bogleheads 2018 Jack Bogle & Bill Bernstein Fireside Chat". Vimeo. 2018. https://vimeo.com/channels/bogleheads/293765659.
  2. ↑ "Investing Ideas/Index Funds". Fidelity. https://www.fidelity.com/mutual-funds/investing-ideas/index-funds.
  3. ↑ Chong Li; Edward Tower; Rhona Zhang (March 26, 2019). "Vanguard versus Fidelity: Multidimensional Comparison of the Index Funds and ETFs of the Two Largest Mutual Fund Families". Economic Research Initiatives at Duke (ERID) Working Paper No. 283 (2019). https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3361263., available at SSRN.
  4. ↑ "Index methodology". Fidelity. https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/mutual-funds/Fidelity_mkt_cap_weighted_methodology.pdf.
  5. ↑ "Trading/Fractional Shares". Fidelity. https://www.fidelity.com/trading/fractional-shares.
  6. ↑ See, Dow Jones US Total Stock Market Indexes Literature.
  7. ↑ Vanguard also offers the Vanguard Russell 2000 ETF.
  8. ↑ Acheson, Leo (Oct 01, 2019). "Our 2019 Rankings of 11 Top HSA Providers". Morningstar. https://www.morningstar.com/articles/947613/our-2019-rankings-of-11-top-hsa-providers.
  9. ↑ Bogleheads® forum topic: [Fidelity Health Savings Account Mega-Thread], liberty53. Nov 11, 2018
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