Fidelity Zero Expense Ratio vs. VG Admiral funds

[explanade]

OK, I'm invested in admiral shares, like VTSAX, VWIUX, VWIAX, VFWAX, etc.

Been very happy with this setup, been living off dividends and distributions from those and other investments, without having to sell shares.


My parents have been with Fidelity managed accounts for 6-7 years. Performance has been poor. They tried to say they're optimizing to minimize taxes.

These are trust accounts. My father passed away 2 years ago and I'm the trustee. The Fidelity holdings are over $2 million. My mother isn't spending this money so most of it will come to me and my siblings.

So I ended the managed accounts and they've liquidated.

I could move the funds to VG.

Last year, I took my mother's IRA from their management group as well and invested in the Fidelity funds, FZROX, FZILX, FUAMX, FXNAX, with 60/40 AA.

They've done all right in the past year. Not sure how the VG Admiral equivalents would have done.

Morningstar doesn't have enough data about the Zero ER funds yet but the YTD and 1-year returns for FZROX compared on par with VTSAX for instance.


Anyone else have holdings of the Fidelity funds?

Main advantage of Fidelity might be that for my sisters, they could go into branches at some point and establish accounts there and make for easier transfers of their inheritances.

One thing I noticed is that it's a lot easier to track dividends and distributions on VG site than it is on Fidelity, unless I'm missing something.

 

[Brat]

Obviously you and the account manager had different goals. I suggest you make an appointment with their local manager and talk about previous performance and investment goals. Personally I choose a basic set and forget: Fidelity Balanced and invest cash in CDs (they have a great tool where you can see terms and returns). During my last meeting with our manager she observed that we didn't have much international and recommended that we look at developed country global funds showing how much, statistically, it would improve our total return. I found one I liked (no transaction fee) and fixed that. The manager can show you where to find dividends and distributions; it hasn't been a problem for me and, in fact, I can print out a summary YTD.

I managed my Mother's trust account at Fidelity through the end of her life. I found that Fidelity was very easy to work with. I gave Vanguard a try for several years. While Wellesly and Wellington can't be beat Vanguard's website and policies are not estate friendly, IMHO.

LOL, been there, done that.

 

[audreyh1]

Sounds like you are in the right funds at Fidelity. They are very inexpensive. Just leave them there. I'm sure they did very very close to Vanguard as they are using almost identical indexes. Not enough difference to move things. If you are happy with Fidelity service and see future convenience then why bother moving anything?

Don't forget to rebalance your mother's IRA if that is your investment plan!!

 

[savory]

I am in the process of managing my entire portfolio. I have been working on the same questions as you have been asking. I will qualify my comments as I am also learning as a high percentage of my portfolio was being managed and not in funds.

As I looked at the Fidelity Zero Expense Funds, I found little difference in the selection of the stocks that are included vs similar Vanguard funds. I expect Fidelity research department was a person with a copy machine of Vanguard funds.

I will be using mutual funds and ETFs. Where I use mutual funds, I am planning to move to the Fidelity funds. For ETFs, I plan to use Vanguard or similar fund choice based upon their market approach since Fidelity does not have zero expense ETF.

Since I am in the process of making these decisions, I will be following this post.

 

[audreyh1]

Fidelity has no commission fees on stocks any more. I suppose that means you can now trade Vanguard ETFs with no commission? That certainly removes a barrier!

 

[OldShooter]

All the equity funds you list and their VG equivalents are passive index funds, although there are some differences in which indices they are tracking they should be behaving almost identically. That's one nice thing about index funds; you know exactly what you are going to get. For details of what each fund is tracking, read the individual prospectuses or the summaries from the fund manager. Fees on this type of fund are so low these days that I don't even worry about them but YMMV.

We buy one fund/the whole world: VTWAX, but a pair of total US market and total international market funds suits many who want some home country bias. (More here: https://famafrench.dimensional.com/videos/home-bias.aspx ) AFIK Fido has no equivalent to VTWAX but both houses can sell you the pair of funds if you want to custom tailor your bias.

The two bond funds you list are govvie funds. IMO there is no reason to pay a manager to buy governments. There is no risk so there is no need for diversification or skill in selection. All he is doing is buying a one-size-fits-all selection of bills, notes, and bonds. You can buy these directly from the Fido bond desk or through the bond desk to the Treasury auction. Buying direct is absolutely painless, saves you the manager fees, and lets you have exactly the maturities you want. I am told there is a very nice bond ladder tutorial on the Fido web site. You might want to look for it.

 

[swakyaby]

On the Fidelity website, there is a "View your YTD tax activity" link. How you get to it:

Hover your cursor over the green tab "Accounts & Trade"
On the drop-down menu, click on "Tax forms & Information"
You'll see the link half-way down in purple letters

Hope this helps

 

[Another Reader]

On the Fidelity website, there is a "View your YTD tax activity" link. How you get to it:

Hover your cursor over the green tab "Accounts & Trade"
On the drop-down menu, click on "Tax forms & Information"
You'll see the link half-way down in purple letters

Hope this helps

I never knew about that. Thanks!

 

[audreyh1]

All the equity funds you list and their VG equivalents are passive index funds, although there are some differences in which indices they are tracking they should be behaving almost identically. That's one nice thing about index funds; you know exactly what you are going to get. For details of what each fund is tracking, read the individual prospectuses or the summaries from the fund manager. Fees on this type of fund are so low these days that I don't even worry about them but YMMV.

We buy one fund/the whole world: VTWAX, but a pair of total US market and total international market funds suits many who want some home country bias. (More here: https://famafrench.dimensional.com/videos/home-bias.aspx ) AFIK Fido has no equivalent to VTWAX but both houses can sell you the pair of funds if you want to custom tailor your bias.

The two bond funds you list are govvie funds. IMO there is no reason to pay a manager to buy governments. There is no risk so there is no need for diversification or skill in selection. All he is doing is buying a one-size-fits-all selection of bills, notes, and bonds. You can buy these directly from the Fido bond desk or through the bond desk to the Treasury auction. Buying direct is absolutely painless, saves you the manager fees, and lets you have exactly the maturities you want. I am told there is a very nice bond ladder tutorial on the Fido web site. You might want to look for it.

FXNAX is not a pure govvie fund. It is a more broadly diversified bond index fund tracking the AGG. FUAMX is an intermediate treasury bond index fund.

And they are paying very very little - like 0.03%ER on those bond index funds. And he doesn't have to do a thing to manage his mother's bonds except perhaps occasionally rebalance between funds.

Personally I'm not interested in managing individual bonds when ER is so low, and certainly wouldn't be willing to manage a parent's investments to that degree.

 

[explanade]

One incentive to keep assets with Fidelity may no longer exist.

The account manager said that Fidelity hasn't decided if it will offer Turbo Tax for free to "high net worth clients."

Says they won't know until early 2020.

 

[GoBears]

It was very easy for my 90-year old father to go into our local Fidelity office and meet with his advisor to arrange for a distribution of shares from his late brother’s POD brokerage account (all in index funds) into his account, my brother’s account and my account. There is something to be said for the convenience of having a local office.

 

[DrRoy]

I have most of my investments at Fido as well. I like Vanguard too, but you have no real reason to switch.

 

[vgopalas]

I have most of my investments at Fido as well. I like Vanguard too, but you have no real reason to switch.

+1

 

[VanWinkle]

I appreciate this post, as there is no bashing of Fido or Vanguard, just real discussion on the advantages of each one. I am currently with Vanguard 100%, but have been thinking of opening an account at Fido due to all of the good reports.

 

[pb4uski]

I have most of my investments at Fido as well. I like Vanguard too, but you have no real reason to switch.

The inverse here... most at Vanguard some at Fidelity and no real reason to switch.

I went with Fido because they were offering HSA brokerage accounts and Vanguard didn't.

Then I had some CDs maturing from PenFed so I moved that chunk of money to Fido since they have an office near our winter condo and many on this forum raved about their online tools compared to Vanguard.... I've dedicated that account to my preferred stock fixed income portfolio.

I'm not unhappy with Fido, but their website has been underwhelming considering the accolades it has received on thie forum over the years.

 

[stlguy57]

We moved all of our assets from Vanguard to Fidelity for the sake of simplicity. Fidelity has a decent cash management account, ITOT which is comparable to VTSAX and HSA accounts for both of us. It's much better having everything and managing from one firm. Very satisfied.

 

[bingybear]

We moved all of our assets from Vanguard to Fidelity for the sake of simplicity. Fidelity has a decent cash management account, ITOT which is comparable to VTSAX and HSA accounts for both of us. It's much better having everything and managing from one firm. Very satisfied.

I moved the portion at Vanguard about 5 years ago IIRC. I now use Schwab and Fido. At both of these you can buy the ETF versions Vanguard funds where they exist (such as VTI) for 0 transaction fees.