After doing some research and planning the past few months I have decided that I would ultimately like to move my money to index funds (currently I am using Vanguard ETFs through TD Ameritrade). In my opinion it seems index funds are simpler and I don't have to worry about things like the bid ask spread in terms of cost.
I am not against using Vanguard, but I am leaning towards Fidelity for a few reasons:
1) I would like to have all my money in one place and I like their banking, calculators, and web site much better.
2) I have regularly had problems with Vanguard's website to the point where it makes it hard to view my investments. I am working with them on a solution but it seems to be a recurring problem which makes me wary of using them for investing. I don't want to constantly be dealing with website issues.
It would seem that Fidelity's Spartan funds are comparable to Vanguard's funds in terms of expense and performance. However, I am slightly scared away by this article:
Fidelity vs. Vanguard: Which is best? - MarketWatch
Merriman's cites the following:
For the 10 years ended Dec. 31, 2012, my moderate (60% equity) portfolio at Fidelity returned 7.8%; in that same period my moderate Vanguard portfolio returned 9.1%. The difference might not seem very important. But it is.
I realize Spartan funds are relatively new so there may not be a reliable period to compare Vanguard to Fidelity, but this just struck me. Later in the article Merriman cites the cost of Fidelity's funds as the difference between performance......to me with Spartan funds, that seems irrelevant. Am I missing something?
Ultimately I just want a few funds for my portfolio:
Total Stock Market index
US Small Cap
Total Bond Market
Is there any reason that I couldn't rely on Spartan funds to construct a comparable portfolio to Vanguard funds? I would hate to give up the extra return at the risk of costs. I realize that the Spartan funds track slightly different indexes than Vanguard, and I am okay with that....I am mostly concerned that there is something I am missing from Merriman's article.
So really it comes down to this:
Am I missing something, or reading way too much into Merriman's comment? To me it looks like Spartan funds (at least for now) are comparable to Vanguard.