Which Fidelity Intl Fund Do I Choose?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
tomwood
Posts: 791
Joined: Mon Dec 10, 2018 9:34 am

Which Fidelity Intl Fund Do I Choose?

Post by tomwood »

Utilizing the 3 fund portfolio at Fidelity it appears I have two options, at least, for all my funds, as they offer their ZERO funds. Speaking just about the international portion, they offer FTIHX or FZILX. While the ZERO experience ratio sounds great, it appears the FTIHX has better returns, does this mean the 0% ER fund might have wider margins? For someone like me, and I assume most here, who plans to hold a fund like this for many many many years, which fund is the better option for me to buy and hold?
User avatar
JonnyDVM
Posts: 2999
Joined: Wed Feb 12, 2014 6:51 pm
Location: Atlanta, GA

Re: Which Fidelity Intl Fund Do I Choose?

Post by JonnyDVM »

They are very similar so I don’t think it makes a big difference. FTIHX has a shade more emerging if I’m not mistaken. I default to the zero fund (FZILX) and use the other for TLH.
I’d trade it all for a little more | -C Montgomery Burns
jmanter
Posts: 56
Joined: Sat Sep 22, 2018 6:57 pm

Re: Which Fidelity Intl Fund Do I Choose?

Post by jmanter »

FZILX doesn't have small caps. Other than that, the funds are largely similar. I've held both since the Zero funds were created as an academic exercise, and they've performed within 1-2 basis points since then. One outperforms for a while and the other does for a while. The result is mostly a wash. ETA: In the end, these are some of the best funds you can choose for a three-fund portfolio.

If you're holding them in a tax advantaged space, it probably doesn't matter much... You just have to decide if you want a couple percent small caps. If you're holding them in a taxable account, you're better off with similar ETFs for the tax efficiency - IXUS or VXUS are nearly identical to FTIHX (there is no equivalent Zero ETF) and you can buy them without fees at Fidelity.
Topic Author
tomwood
Posts: 791
Joined: Mon Dec 10, 2018 9:34 am

Re: Which Fidelity Intl Fund Do I Choose?

Post by tomwood »

JonnyDVM wrote: Sun May 16, 2021 6:26 am They are very similar so I don’t think it makes a big difference. FTIHX has a shade more emerging if I’m not mistaken. I default to the zero fund (FZILX) and use the other for TLH.
Would you explain that last sentence in more detail please? Is TLH a bond fund? I tried to look it up and found bond information so that last sentence has left me confused.
Topic Author
tomwood
Posts: 791
Joined: Mon Dec 10, 2018 9:34 am

Re: Which Fidelity Intl Fund Do I Choose?

Post by tomwood »

jmanter wrote: Sun May 16, 2021 8:09 am FZILX doesn't have small caps. Other than that, the funds are largely similar. I've held both since the Zero funds were created as an academic exercise, and they've performed within 1-2 basis points since then. One outperforms for a while and the other does for a while. The result is mostly a wash. ETA: In the end, these are some of the best funds you can choose for a three-fund portfolio.

If you're holding them in a tax advantaged space, it probably doesn't matter much... You just have to decide if you want a couple percent small caps. If you're holding them in a taxable account, you're better off with similar ETFs for the tax efficiency - IXUS or VXUS are nearly identical to FTIHX (there is no equivalent Zero ETF) and you can buy them without fees at Fidelity.
I will be holding this in a tax advantage account. Am I saving a small amount of money buy holding the ZERO fund, which makes it the superior choice?

Is the lack of small caps also the difference between the Fidelity US stock fund and the ZERO Fidelity US Stock fund?
User avatar
JonnyDVM
Posts: 2999
Joined: Wed Feb 12, 2014 6:51 pm
Location: Atlanta, GA

Re: Which Fidelity Intl Fund Do I Choose?

Post by JonnyDVM »

tomwood wrote: Sun May 16, 2021 10:37 am
JonnyDVM wrote: Sun May 16, 2021 6:26 am They are very similar so I don’t think it makes a big difference. FTIHX has a shade more emerging if I’m not mistaken. I default to the zero fund (FZILX) and use the other for TLH.
Would you explain that last sentence in more detail please? Is TLH a bond fund? I tried to look it up and found bond information so that last sentence has left me confused.
I’m sorry. I was referring to tax loss harvesting. That doesn’t matter if this is in a retirement account. And I would still defer to FZILX as my first choice as those couple basis points will add up over the long run.
I’d trade it all for a little more | -C Montgomery Burns
RetiredCSProf
Posts: 634
Joined: Tue Feb 28, 2017 4:59 pm

Re: Which Fidelity Intl Fund Do I Choose?

Post by RetiredCSProf »

Are you able to purchase ETFs? I hold a portion of IXUS for international in my Fido tax-advantaged accounts.
User avatar
ruralavalon
Posts: 21419
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: Which Fidelity Intl Fund Do I Choose?

Post by ruralavalon »

tomwood wrote: Sun May 16, 2021 6:05 am Utilizing the 3 fund portfolio at Fidelity it appears I have two options, at least, for all my funds, as they offer their ZERO funds. Speaking just about the international portion, they offer FTIHX or FZILX. While the ZERO experience ratio sounds great, it appears the FTIHX has better returns, does this mean the 0% ER fund might have wider margins? For someone like me, and I assume most here, who plans to hold a fund like this for many many many years, which fund is the better option for me to buy and hold?
tomwood wrote: Sun May 16, 2021 11:30 am . . . . .
I will be holding this in a tax advantage account. Am I saving a small amount of money buy holding the ZERO fund, which makes it the superior choice?

Is the lack of small caps also the difference between the Fidelity US stock fund and the ZERO Fidelity US Stock fund?
Performance of those two international stock funds has been very similar. The history of the ZERO fund is very short, and it uses a unique index. So far the slightly lower expense ratio of the ZERO fund has not produced a benefit. So far the the return of the ZERO fund is a little lower. Portfolio Visualizer, 2019-2021.

The tiny difference in expense ratio for the ZERO fund doesn't make it superior in my opinion.

The ZERO fund does omit stocks of small-cap international companies, but that omission is immaterial in my opinion.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started
Ferdinand2014
Posts: 1973
Joined: Mon Dec 17, 2018 6:49 pm

Re: Which Fidelity Intl Fund Do I Choose?

Post by Ferdinand2014 »

tomwood wrote: Sun May 16, 2021 6:05 am Utilizing the 3 fund portfolio at Fidelity it appears I have two options, at least, for all my funds, as they offer their ZERO funds. Speaking just about the international portion, they offer FTIHX or FZILX. While the ZERO experience ratio sounds great, it appears the FTIHX has better returns, does this mean the 0% ER fund might have wider margins? For someone like me, and I assume most here, who plans to hold a fund like this for many many many years, which fund is the better option for me to buy and hold?
Options:
FSPSX - Large cap developed international, sans Canada (MSCI EAFE). Er 0.035 900 stocks
FSGGX - Large cap developed international, large cap emerging market (MSCI ACWI) Er 0.055 2,500 stocks
FTIHX - Large cap developed international, large cap emerging markets and small cap developed market (MSCI ACWI IMI) Er 0.06 4,500 stocks
FZILX - large cap developed international, large cap emerging markets, stricter criteria with less China then MSCI index at 8.59% vs 11.5% in FSGGX (Fidelity international index) Er 0.00 2,500 stocks

You can’t predict which will have better returns going forward based on past returns. Invest based on if you want emerging markets or not, small cap or only large cap. FZILX can only be held at Fidelity if you change brokerages. The performance difference will likely be very close across the list over the next 30 years.
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett
jmanter
Posts: 56
Joined: Sat Sep 22, 2018 6:57 pm

Re: Which Fidelity Intl Fund Do I Choose?

Post by jmanter »

tomwood wrote: Sun May 16, 2021 11:30 am
jmanter wrote: Sun May 16, 2021 8:09 am FZILX doesn't have small caps. Other than that, the funds are largely similar. I've held both since the Zero funds were created as an academic exercise, and they've performed within 1-2 basis points since then. One outperforms for a while and the other does for a while. The result is mostly a wash. ETA: In the end, these are some of the best funds you can choose for a three-fund portfolio.

If you're holding them in a tax advantaged space, it probably doesn't matter much... You just have to decide if you want a couple percent small caps. If you're holding them in a taxable account, you're better off with similar ETFs for the tax efficiency - IXUS or VXUS are nearly identical to FTIHX (there is no equivalent Zero ETF) and you can buy them without fees at Fidelity.
I will be holding this in a tax advantage account. Am I saving a small amount of money buy holding the ZERO fund, which makes it the superior choice?

Is the lack of small caps also the difference between the Fidelity US stock fund and the ZERO Fidelity US Stock fund?
The US stock funds are largely similar to one another. They have essentially the same balance of large, medium, and small caps as well as value, blend, and growth splits.
The major difference is that FSKAX (.015 expense ratio) is tied to an external index and holds around 3550 stocks. FZROX (zero expense ratio) is a Fidelity internal index and it holds closer to 2610 stocks. There are several threads on the difference between these two - here's one: viewtopic.php?t=344738

I have a portion of my portfolio that I split evenly between the two funds when FZROX came out (about 3 years ago). They currently have about $60,000 between them and are literally within $1.85 of one another. One may perform a bit better over the next 10 years, but we don't know which one it will be.

Bottom line: They are both excellent funds. Some prefer one or the other for one reason or another, but it won't matter all that much, and we don't know which one will be better in 10 years. Full disclosure, I've spent far more time debating which one to hold than I care to admit. It just won't matter all that much...Pick one and you won't be wrong.
Last edited by jmanter on Sun May 16, 2021 7:15 pm, edited 1 time in total.
jmanter
Posts: 56
Joined: Sat Sep 22, 2018 6:57 pm

Re: Which Fidelity Intl Fund Do I Choose?

Post by jmanter »

Ferdinand2014 wrote: Sun May 16, 2021 3:51 pm
tomwood wrote: Sun May 16, 2021 6:05 am Utilizing the 3 fund portfolio at Fidelity it appears I have two options, at least, for all my funds, as they offer their ZERO funds. Speaking just about the international portion, they offer FTIHX or FZILX. While the ZERO experience ratio sounds great, it appears the FTIHX has better returns, does this mean the 0% ER fund might have wider margins? For someone like me, and I assume most here, who plans to hold a fund like this for many many many years, which fund is the better option for me to buy and hold?
Options:
FSPSX - Large cap developed international, sans Canada (MSCI EAFE). Er 0.035 900 stocks
FSGGX - Large cap developed international, large cap emerging market (MSCI ACWI) Er 0.055 2,500 stocks
FTIHX - Large cap developed international, large cap emerging markets and small cap developed market (MSCI ACWI IMI) Er 0.06 4,500 stocks
FZILX - large cap developed international, large cap emerging markets, stricter criteria with less China then MSCI index at 8.59% vs 11.5% in FSGGX (Fidelity international index) Er 0.00 2,500 stocks

You can’t predict which will have better returns going forward based on past returns. Invest based on if you want emerging markets or not, small cap or only large cap. FZILX can only be held at Fidelity if you change brokerages. The performance difference will likely be very close across the list over the next 30 years.
+1

These are all excellent options. Pick one.

I use FSGGX in my employer plan because FTIHX and FZILX are not options there (and I prefer it to FSPSX because it has emerging markets).
I use FTIHX and FZILX in my IRAs because they're both excellent and inexpensive, and I don't care much about the 4% or so difference in small caps.

I know we have a tendency to try to maximize returns by obsessing over these little decisions. I'm very guilty of this. Again, the reality is that one of these will do a few basis points better than the others over 10, 20 or 30 years, but we don't know which one it will be (and it may be different at each time frame you choose). You're doing well toward the larger goal of choosing low-cost, well diversified index funds for your three-fund portfolio. If you have a reason to pick one of these over the other, go for it. If not, flip a coin. You have excellent options.
Post Reply