Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Selecting Bond Fund/ETF in Fidelity Account
Old 07-19-2016, 11:11 PM   #1
Recycles dryer sheets
Join Date: Jan 2008
Posts: 68
Selecting Bond Fund/ETF in Fidelity Account

I have an Solo 401K account with Fidelity in which the funds in a money market fund.

I'm inclined to move some of the money into a medium term bond fund. Two options I've looked at so far include Fidelity's FSITX and the Vanguard ETF BIV. If I'm to buy a Vanguard fund, it seems best to buy an ETF due to there being a lower transaction cost than with a Vanguard mutual fund.

I'm interested in getting input from the board as to which of the above (or any other bond fund) is preferable. Opinions as to the timing of a move into bonds are also welcome.

lawman3966 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 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 07-20-2016, 12:31 AM   #2
Recycles dryer sheets
Join Date: Nov 2014
Posts: 133
I also had some bond fund choices to make in my Fido 401k when I was "jailbreaking" it from the default fund choices. Went with FSITX (Fido US Bond Idx) since it was a Fido account, it didn't look like I'd qualify for the Vanguard Admiralty perks of fund discounted expense ratios. The Vang ETF you mention has an 0.09 ER vs the 0.05 on FSITX. Double check the expense ratios your account lists, but on fees solely the Fido fund is close to half as inexpensive. I'm a Vanguard fan but in the case of my 401k's core bond holding I went with the lower costs.

There is also the matter that BIV is 1) an ETF and 2) a dedicated intermediate bond fund vs FSITX 1) a mutual fund and 2) a cross-duration total US bond fund which happens to average out to intermediate duration. So they're not 100% apples-to-apples. I have heard recently of flash/micro crash intraday volatility concerns with ETFs, though am not versed on that to comment further. The different bond durations held between the two funds also result in a different sensitivity to interest rate increases. This may be a small delta due to their overall similar average duration.

For me, unless there was a reason I wanted the slightly more expensive bond ETF, I'd go with the lower cost total bond fund.

The kids used to call me Captain Slow; now they also use Captain Cheap. I tell them, "Talk to the portfolio!"
growerVon is offline   Reply With Quote
Old 07-20-2016, 03:19 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jun 2005
Posts: 7,662
FSITX is a total US bond index fund. I used to own it, but own similar funds now (AGG, BND, VBMFX, VBTLX are all similar). It is an intermediate-term bond fund with duration to match that term.

BIV is an intermediate-term bond index fund. It is not total and lacks mortgage-backed securities. Some folks do not like MBS, so this fund is for them. (FSITX will have some MBS).

My rule of thumb is that whenever there are two choices like this that are both fine to own, that whichever one I buy has a worse performance in the the future than the one I didn't buy.

Either one is fine. You can even buy both. You will pay a commission for BIV. If you simply want an ETF bond fund over a mutual fund, then you could probably get AGG commission-free at Fidelity (I'm not sure).
LOL! is offline   Reply With Quote
Old 07-20-2016, 07:12 AM   #4
Thinks s/he gets paid by the post
Join Date: Nov 2009
Posts: 3,128
When I did a Fidelity Rollover IRA from my old 401k, I wanted to find a bond fund which was roughly similar to the Stable Value fund in the 401k. I ended up choosing Fidelity's Intermediate-term Bond Fund (FTHRX). I have had AAs in my IRA ranging from 55/45 (in favor of stocks) to 50/50.
Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.

"I want my money working for me instead of me working for my money!"
scrabbler1 is offline   Reply With Quote
Old 07-20-2016, 09:14 AM   #5
Recycles dryer sheets
misanman's Avatar
Join Date: Apr 2008
Posts: 391
Hoping I can piggy back on this discussion to see if there are any recommendations for a short term bond fund or etf.

misanman is offline   Reply With Quote
Old 07-20-2016, 10:04 AM   #6
Full time employment: Posting here.
Join Date: Jun 2004
Location: E. Wash
Posts: 908
My favorite short term bond bond is Vanguard's ST Corp ETF (mirrors their mutual fund). To avoid the Fido commission on Vanguard I use the ETF, VCSH. Morningstar gives it 5 star

nwsteve is offline   Reply With Quote

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
when are treasury bond etf's not treasury bond etf's ? mathjak107 FIRE and Money 1 07-20-2015 08:26 AM
Selecting Indexed Mutual Fund vs. ETF ksr FIRE and Money 3 08-20-2009 07:34 PM
Selecting a Money Market Account Intuit FIRE and Money 8 01-31-2006 04:07 PM
Mutual Fund/ETF dist. in Taxable Account maddythebeagle Young Dreamers 1 07-05-2005 10:11 AM
Need help with selecting a fund. LRAO FIRE and Money 4 10-11-2004 11:55 AM


All times are GMT -6. The time now is 03:38 AM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2016, vBulletin Solutions, Inc.