Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
FIDO dropping costs again
Old 10-11-2018, 11:27 AM   #1
Moderator
braumeister's Avatar
 
Join Date: Feb 2010
Location: Northern Kentucky
Posts: 11,666
FIDO dropping costs again

Got an email from Fidelity that as of next month they are converting all their funds to just one class (currently "Investor" and "Premium") and all will have the lowest ER.

Gotta give them credit for competing hard against Vanguard.
__________________

__________________
I thought growing old would take longer.
braumeister is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 10-11-2018, 12:07 PM   #2
Moderator
samclem's Avatar
 
Join Date: May 2004
Posts: 12,955
Quote:
Originally Posted by braumeister View Post
Gotta give them credit for competing hard against Vanguard.
This will be good news for a lot of customers.
My guess is that Fidelity will have a hard time competing with Vanguard to be the lowest-cost provider of mutual funds. Vanguard's customer-owned corporate structure and their lower overhead costs (no B&M stores, etc) give them a big advantage. But for those who want what Fido has (better hand-holding, wider array of in-house managed funds, slicker web site, etc), the low costs could be the icing on the cake.


It may turn into a Walmart (low cost, bare bones, well run) vs Target (slightly more expensive, more polished, well run) competition, and that's good for everybody. Fido is doing a good job of not becoming Sears (fat, irrelevant).


Full disclosure: I've got funds at both Fido and Vgd.
__________________

samclem is online now   Reply With Quote
Old 10-11-2018, 12:31 PM   #3
Moderator
braumeister's Avatar
 
Join Date: Feb 2010
Location: Northern Kentucky
Posts: 11,666
Actually, I think Fido has quite a few (dozens) of index funds with lower costs than Vanguard. Probably not that competitive if you look at their whole fund universe, but they're obviously trying. Abigail still probably has a bigger yacht than her average customer though.

And I'm at both too.
__________________
I thought growing old would take longer.
braumeister is offline   Reply With Quote
Old 10-11-2018, 12:46 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 20,126
Quote:
Originally Posted by braumeister View Post
Got an email from Fidelity that as of next month they are converting all their funds to just one class (currently "Investor" and "Premium") and all will have the lowest ER.

Gotta give them credit for competing hard against Vanguard.
They had already made the lowest ER change when they announced the new zero funds. So we've been enjoying the lowest ERs for a while.

Now they are in the process of merging the four index funds classes for each type, and I believe they will be using the Institutional Premium version ticker.

The Fidelity Index funds have ALL been lower ER than the Vanguard Admiral Index funds for a while now. They also require no minimum investment.
Quote:
Originally Posted by samclem View Post
This will be good news for a lot of customers.
My guess is that Fidelity will have a hard time competing with Vanguard to be the lowest-cost provider of mutual funds.
https://www.fidelity.com/mutual-fund...B&gclsrc=aw.ds
__________________
Retired since summer 1999.
audreyh1 is offline   Reply With Quote
Old 10-11-2018, 12:47 PM   #5
Thinks s/he gets paid by the post
OldShooter's Avatar
 
Join Date: Mar 2017
Location: City
Posts: 2,272
I would like to see Vanguard collapse Admiral and Investor shares because I can't get Admiral shares at Schwab. But, really, when we are down to looking at 1 or two bps differences, it really doesn't matter as much any more. Not that I wouldn't like to pick up the odd $100 bill if it was lying there.
OldShooter is offline   Reply With Quote
Old 10-11-2018, 12:50 PM   #6
Moderator
samclem's Avatar
 
Join Date: May 2004
Posts: 12,955
Quote:
Originally Posted by braumeister View Post
Actually, I think Fido has quite a few (dozens) of index funds with lower costs than Vanguard. Probably not that competitive if you look at their whole fund universe, but they're obviously trying.
Oh, yes. My dough at Fido is in those funds (formerly the Spartan series). It's a bit like an item on sale at Target, it can be cheaper than the regular Walmart price.


It will be interesting to see Vanguard's response. I'm betting on a "Super Admiral" class with a negative ER (they pay you). And a black & white web site reachable only by dial-up modem. And, they come to your house and kick your dog.
samclem is online now   Reply With Quote
Old 10-11-2018, 02:08 PM   #7
Thinks s/he gets paid by the post
Red Badger's Avatar
 
Join Date: Jan 2017
Location: Piedmont Region
Posts: 1,331
Quote:
Originally Posted by samclem View Post
Oh, yes. My dough at Fido is in those funds (formerly the Spartan series). It's a bit like an item on sale at Target, it can be cheaper than the regular Walmart price.


It will be interesting to see Vanguard's response. I'm betting on a "Super Admiral" class with a negative ER (they pay you). And a black & white web site reachable only by dial-up modem. And, they come to your house and kick your dog.
When they kick my dog, I'm gonna share my metals portfolio with them.
Lead.
12 gauge.
__________________
Never let yesterday use up too much of today.
W. Rogers
Red Badger is offline   Reply With Quote
Old 10-11-2018, 02:48 PM   #8
Recycles dryer sheets
Beldar's Avatar
 
Join Date: Oct 2014
Posts: 431
Quote:
Originally Posted by samclem View Post
And a black & white web site reachable only by dial-up modem.
Make it 300 baud and text-only and I'm in! (Dying to use all that old gear gathering dust in the garage).

_B
Beldar is offline   Reply With Quote
Old 10-11-2018, 11:21 PM   #9
Full time employment: Posting here.
 
Join Date: Aug 2007
Posts: 994
Does anybody know how well the Fidelity funds perform when compared to Vanguard?

Ok, I checked for one of the funds: US Total Market.

fund1-yr3-yr5-yr10-yr 
VTSAX17.62%17.07%13.44%12.08% 
FSTVX17.57%17.05%13.42%12.01% 

Looks like Vanguard is a winner.
__________________
Eat, Drink and Be Merry.
tulak is offline   Reply With Quote
Old 10-12-2018, 12:10 AM   #10
Thinks s/he gets paid by the post
RobbieB's Avatar
 
Join Date: Mar 2016
Location: Central CA
Posts: 3,656
Whatever.
__________________
Retired at 59 in 2014. Should have done it sooner but I worried too much.
RobbieB is offline   Reply With Quote
Old 10-12-2018, 06:06 AM   #11
Recycles dryer sheets
 
Join Date: Feb 2015
Posts: 208
Quote:
Originally Posted by braumeister View Post
Got an email from Fidelity that as of next month they are converting all their funds to just one class (currently "Investor" and "Premium") and all will have the lowest ER.

Gotta give them credit for competing hard against Vanguard.
Fidelity has to compete. As hard as they can. July 2018 stats show Vanguard with $ 5.1T AUM and Fidelity with $ 2.45T AUM. HAlf as much.


Also, Fidelity claims on their website they actually have $6.9T but this is misleading as this includes "Assets under Administration" and not strictly AUM ( Assets under Mgmt.). This is why you have seen recently the zero fee funds from Fidelity and Schwab claiming they beat Vanguard's index fund fees by 1 basis point!


Gee Fido. Gee Schwab. Where you guys been the past 30 years??
MrLoco is offline   Reply With Quote
Old 10-12-2018, 07:01 AM   #12
Full time employment: Posting here.
 
Join Date: Aug 2007
Posts: 994
Quote:
Originally Posted by RobbieB View Post
Whatever.


No doubt. I wanted to point out that you need to consider more than the fund’s ER. But at these %s it doesn’t matter. Just do whatever’s easiest.
__________________
Eat, Drink and Be Merry.
tulak is offline   Reply With Quote
Old 10-12-2018, 07:23 AM   #13
Thinks s/he gets paid by the post
 
Join Date: Jun 2016
Posts: 2,375
Quote:
Originally Posted by tulak View Post
No doubt. I wanted to point out that you need to consider more than the fund’s ER. But at these %s it doesn’t matter. Just do whatever’s easiest.


Exactly. Best of both worlds is VG funds or ETF’s within a Fido account. All the perks of Fido’s superior service with the lower costs/marginally better performance of VG products.
Scuba is offline   Reply With Quote
Old 10-12-2018, 10:13 AM   #14
Thinks s/he gets paid by the post
OldShooter's Avatar
 
Join Date: Mar 2017
Location: City
Posts: 2,272
Quote:
Originally Posted by tulak View Post
... Looks like Vanguard is a winner.
Really? Looks to me like any actual difference is statistically and economically insignificant.

IMO this story is not over. All this price cutting and consolidation (primarily of stock pickers) has to play itself out before we will really know what we will be paying for various funds and services. The good news is that it will be less, probably much less, but this won't be the first price war where the warriors overshoot and have to raise prices somewhere in order to generate stockholder return or just to stay in business. As has been mentioned, VG is unique in not looking for stockholder return but if their actual costs are enough higher than, say, Fido's then Fido might end up the price winner. I'm expecting this opera to run for another couple of years before we see the denouement.
OldShooter is offline   Reply With Quote
Old 10-12-2018, 10:30 AM   #15
Thinks s/he gets paid by the post
Cobra9777's Avatar
 
Join Date: Jul 2012
Location: Texas
Posts: 1,543
Quote:
Originally Posted by Scuba View Post
...Best of both worlds is VG funds or ETF’s within a Fido account. All the perks of Fido’s superior service with the lower costs/marginally better performance of VG products.
+1

I've been saying this for years, although Fidelity's recent ER cutting might change things at some point. Our portfolio is all ETFs, about half Vanguard and half iShares, all housed at Fidelity. One note: VG mutual funds at Fidelity is probably not advisable because IIRC there is a commission of $49.95 per trade on non-Fidelity mutual funds. Most iShares ETFs trade free. I pay $4.95 to trade VG ETFs, but I only make 2-3 trades per year on average, so it's of no real consequence.
__________________
Retired at 52 in July 2013. On to better things...
AA: 55% stock, 15% real estate, 27% bonds, 3% cash
WR: 2.0% SI: 2 pensions, some rental income, SS later
Cobra9777 is offline   Reply With Quote
Old 10-16-2018, 11:56 PM   #16
Thinks s/he gets paid by the post
 
Join Date: Jun 2016
Posts: 2,375
Quote:
Originally Posted by Cobra9777 View Post
+1



I've been saying this for years, although Fidelity's recent ER cutting might change things at some point. Our portfolio is all ETFs, about half Vanguard and half iShares, all housed at Fidelity. One note: VG mutual funds at Fidelity is probably not advisable because IIRC there is a commission of $49.95 per trade on non-Fidelity mutual funds. Most iShares ETFs trade free. I pay $4.95 to trade VG ETFs, but I only make 2-3 trades per year on average, so it's of no real consequence.


Agreed. I don’t do any VG mutual funds, only ETF’s.
Scuba is offline   Reply With Quote
Old 10-17-2018, 08:09 AM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 20,126
Quote:
Originally Posted by Scuba View Post
Exactly. Best of both worlds is VG funds or ETF’s within a Fido account. All the perks of Fido’s superior service with the lower costs/marginally better performance of VG products.
High transaction fees messes that up.
__________________
Retired since summer 1999.
audreyh1 is offline   Reply With Quote
Old 10-17-2018, 07:29 PM   #18
Thinks s/he gets paid by the post
 
Join Date: Jun 2016
Posts: 2,375
Quote:
Originally Posted by audreyh1 View Post
High transaction fees messes that up.


Huh? What transaction fees? I pay either nothing or $4.95/trade depending on what I’m trading. Transaction costs are a very small rounding error.
Scuba is offline   Reply With Quote
Old 10-17-2018, 07:35 PM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 20,126
Quote:
Originally Posted by Scuba View Post
Huh? What transaction fees? I pay either nothing or $4.95/trade depending on what I’m trading. Transaction costs are a very small rounding error.
Vanguard funds have high transaction fees at Fido.
__________________
Retired since summer 1999.
audreyh1 is offline   Reply With Quote
Old 10-17-2018, 08:36 PM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Apr 2013
Posts: 7,199
Quote:
Originally Posted by audreyh1 View Post
Vanguard funds have high transaction fees at Fido.
+1

It's a ripoff. There was valid a reason for it in 1993. Those physical packages were replaced with reusable bits long ago.
__________________

MRG is online now   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Fido bill pay and the newer Fido CC bingybear FIRE and Money 6 03-02-2017 08:44 AM
How I Stopped My Assets from dropping... blanston FIRE and Money 71 01-08-2009 05:49 PM
Cancer deaths are dropping Rich_by_the_Bay Health and Early Retirement 8 01-17-2007 06:20 PM
7-Eleven dropping Venezuela-backed Citgo REWahoo Other topics 10 09-28-2006 12:28 PM

» Quick Links

 
All times are GMT -6. The time now is 11:57 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2018, vBulletin Solutions, Inc.