Fidelity
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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. Unlike Vanguard, Fidelity had removed the minimum investments to purchase any of its mutual funds available for retail investors.
Fidelity also provides a comparison of its funds to Vanguard. See: Fidelity Redefines Investing Appendix, Fidelity Investments, August, 2018.[2]
Tools for Boglehead-style investing
- Fidelity offers no-commission trades on individual stocks and ETF's. As of August 1, 2018, 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 22 Fidelity Index Funds (formerly called Spartan funds). These are Fidelity's counterpart to Vanguard, very-low-expense-ratio index funds. Effective August 1, 2018, Fidelity eliminated the minimum investment requirement on all these funds, and adjusted all funds to match the former Institutional Premium class funds. The various classes of each fund were merged in November, 2018. This change results 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.
- On August 3, 2018, Fidelity began offering two new Fidelity ZERO Index Funds with a 0.00% expense ratio, the Fidelity ZERO Total Market Index Fund and the Fidelity ZERO International Index Fund. These funds track proprietary Fidelity indexes covering the total US stock market and the global ex-US mid-/large-cap markets respectively. As of January 2019, Fidelity offers four Zero Index Funds, with the addition of Fidelity Large Cap Zero Index Fund (FNILX) and Fidelity Extended Market Zero Index Fund.
- Fidelity mutual funds do not share the same structure that allows Vanguard mutual funds to avoid distributing capital gains, which may have tax consequences for investors. Those investing in taxable accounts may wish to consider using the Vanguard or iShares ETFs instead.
- This table shows the rough correspondence between Vanguard Admiral Class funds and low-cost no transaction fee mutual funds and commission-free ETFs available at Fidelity. 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. Note that all Fidelity funds are listed with the ticker that will remain active after the asset classes are merged in November 2018. Other tickers can be found in the appendix to the press release announcing the fund changes.
| Fund Class | Fund Name | Ticker | ER | Index Tracked |
|---|---|---|---|---|
| US Stocks | ||||
| Total US Stock Market | Vanguard Total Stock Market Index Fund | VTSAX | 0.04% | CRSP Total Market Index |
| Fidelity Total Market Index Fund | FSKAX | 0.015% | Dow Jones US Total Stock Market Index | |
| Fidelity ZERO Total Market Index Fund | FZROX | 0.00% | Fidelity U.S. Total Investable Market Index | |
| iShares Core S&P Total U.S. Stock Market ETF | ITOT | 0.03% | S&P Total Market Index | |
| S&P 500/Large Cap | Vanguard 500 Index Fund | VFIAX | 0.04% | S&P 500 |
| Fidelity 500 Index Fund | FXAIX | 0.015% | ||
| iShares Core S&P 500 ETF | IVV | 0.04% | ||
| Fidelity ZERO Large Cap Index Fund | FNILX | 0.0% | Fidelity U.S. Large Cap Index | |
| Extended Market | Vanguard Extended Market Index Fund | VEXAX | 0.08% | S&P Completion Index |
| 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 [3] | |
| Mid Cap | Vanguard Mid Cap Index Fund | VIMAX | 0.05% | CRSP US Mid Cap Index |
| Fidelity Mid Cap Index Fund | FSMDX | 0.025% | Russell Mid Cap Index | |
| iShares Core S&P Mid-Cap ETF | IJH | 0.07% | S&P MidCap 400 Index | |
| Small Cap | Vanguard Small Cap Index Fund | VSMAX | 0.05% | CRSP US Small Cap Index Index [4] |
| Fidelity Small Cap Index Fund | FSSNX | 0.025% | Russell 2000 Index | |
| iShares Core S&P Small-Cap ETF | IJR | 0.07% | S&P SmallCap 600 Index | |
| Real Estate | Vanguard Real Estate Index Fund | VGSLX | 0.12% | MSCI US Investable Market Real Estate 25/50 Index |
| Fidelity Real Estate Index Fund | FSRNX | 0.07% | Dow Jones U.S. Select Real Estate Securities 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 | |
| International Stocks | ||||
| Total International Stock Market | Vanguard Total International Stock Index | VTIAX | 0.11% | FTSE Global All Cap ex US Index |
| Fidelity Total International Index Fund | FTIHX | 0.06% | MSCI ACWI ex USA IMI Index | |
| Fidelity ZERO International Index Fund | FZILX | 0.00% | Fidelity Global ex US Index (excludes small caps) | |
| iShares Core MSCI Total International Stock ETF | IXUS | 0.10% | MSCI ACWI ex USA IMI Index | |
| Developed Markets [note 1] | Vanguard Developed Markets Index Fund | VTMGX | 0.07% | FTSE Developed All Cap ex US Index |
| 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 | |
| iShares Core MSCI EAFE | IEFA | 0.08% | MSCI EAFE IMI Index | |
| Emerging Markets | Vanguard Emerging Markets Index Fund | VEMAX | 0.14% | FTSE Emerging Markets All Cap China A Inclusion Index |
| Fidelity Emerging Markets Index Fund | FPADX | 0.08% | MSCI Emerging Markets Index (excludes small caps) | |
| iShares Core MSCI Emerging Markets | IEMG | 0.14% | MSCI Emerging Markets IMI Index | |
| US Bonds | ||||
| Short-Term Treasury | Vanguard Short-Term Treasury Index Fund | VSBSX | 0.07% | Bloomberg Barclays US Treasury 1–3 Year Bond Index |
| Fidelity Short-Term Treasury Bond Index Fund | FUMBX | 0.03% | Bloomberg Barclays 1-5 Year U.S. Treasury Index | |
| iShares 1-3 Year Treasury Bond ETF | SHY | 0.15% | ICE U.S. Treasury 1-3 Year Bond Index | |
| Intermediate-Term Treasury | Vanguard Intermediate-Term Treasury Index Fund | VSIGX | 0.07% | Bloomberg Barclays US Treasury 3–10 Year Bond Index |
| Fidelity Intermediate Treasury Bond Index Fund | FUAMX | 0.03% | Bloomberg Barclays 5-10 Year U.S. Treasury 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 | Vanguard Inflation Protected Securities Fund | VAIPX | 0.10% [note 2] | Not an index fund |
| Fidelity Inflation-Protected Bond Index Fund | FIPDX | 0.05% | Bloomberg Barclays U.S. TIPS Index | |
| iShares TIPS Bond ETF | TIP | 0.20% | Bloomberg Barclays U.S. TIPS Index | |
| Long-Term Treasury | Vanguard Long-Term Treasury Index Fund | VLGSX | 0.07% | Bloomberg Barclays US Long Treasury Bond Index |
| Fidelity Long-Term Treasury Bond Index Fund | FNBGX | 0.03% | 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 | Vanguard Total Bond Market Index Fund | VBTLX | 0.05% | Bloomberg Barclays U.S. Aggregate Float Adjusted Index |
| Fidelity U.S. Bond Index Fund | FXNAX | 0.025% | Bloomberg Barclays U.S. Aggregate Bond Index | |
| iShares Core U.S. Aggregate Bond ETF | AGG | 0.05% | Bloomberg Barclays US Aggregate Bond Index | |
| International Bonds | ||||
| ex-US Aggregate Bond | Vanguard Total International Bond Index Fund | VTABX | 0.11% | Bloomberg Barclays Global Aggregate ex-USD Float-Adjusted Index (Hedged) |
| 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 | |
| Balanced Funds | ||||
| Target-date funds | Vanguard Target Retirement Funds | Various | 0.13% - 0.15% | |
| Fidelity Freedom® Index Funds | Various | 0.12% | ||
| Fixed allocation funds | Vanguard LifeStrategy | VASIX, VSCGX, VSMGX, VASGX | 0.11% - 0.14% | 20/80 to 80/20 allocations |
| Fidelity Four-in-One Index Fund | FFNOX | 0.11% | 85/15 index fund | |
| iShares Core Allocation ETFs | AOK, AOM, AOR, AOA | 0.25% | 30/70 to 80/20 allocations | |
- When investing in target-date funds, go by the fund's composition (asset allocation), not the date. Also see: Vanguard target retirement funds.
- 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. Admiral Class shares are not available for purchase at Fidelity. Vanguard has ETF equivalents for most of its index funds. Like other stocks and ETFs, Vanguard ETFs can be bought and sold at Fidelity commission free. If you want to use actual Vanguard products, using Vanguard ETFs 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:
- The Fidelity Account® is a top-level overview of the brokerage account services.
- Trading Commissions and Margin Rates describes fees and commissions.
- Investment Choices details the investments available through Fidelity.
- Browse Fidelity Funds is a structured overview of 283 Fidelity funds (as of April 28, 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.
- Fidelity: one stop shop summarizes a Bogleheads forum discussion on using Fidelity for banking and investing needs.
Notes
See also
References
- ↑ Vanguard's major competitors in Exchange Traded Funds are Blackrock ishares and State Street.
- ↑ Bogleheads® forum topic: Fidelity Files for two Fidelity ZERO℠ Funds (0.00% ER total stock and total international mutual funds), jhfenton. Aug 01, 2018
- ↑ See, Dow Jones US Total Stock Market Indexes Literature.
- ↑ Vanguard also offers the Vanguard Russell 2000 ETF.
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