Fidelity Fund Comparable to VFIIX Vanguard GNMA Fund

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sco
Posts: 533
Joined: Thu Sep 24, 2015 2:28 pm

Fidelity Fund Comparable to VFIIX Vanguard GNMA Fund

Post by sco » Mon Mar 20, 2017 8:49 pm

I am looking for a Fidelity Fund Comparable to VFIIX Vanguard GNMA Fund, and am only finding a fund with too high of an expense ratio, for such a fund.

Vanguard Fund
VFIIX Vanguard GNMA Fund Expense ratio 0.21% (3k min)
Vanguard GNMA Fund Admiral Shares Expense 0.11% (50k min)


I'd be happy with something compatible to .2% expenses.

All I have found from Fidelity is Fidelity® GNMA Fund FGMNX Exp Ratio (Net) 0.45% ($2,500 min)


Am I missing one of their offerings, or do they just not have a competitive product?

lack_ey
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Joined: Wed Nov 19, 2014 11:55 pm

Re: Fidelity Fund Comparable to VFIIX Vanguard GNMA Fund

Post by lack_ey » Mon Mar 20, 2017 8:54 pm

Vanguard is frequently the only one with a cheap mutual fund in a category like this.

At Fidelity you could also look at iShares GNMA Bond ETF (GNMA) with an ER of 0.15%, which is on the commission-free list, but the spread is usually around 0.2% so beware.

tibbitts
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Re: Fidelity Fund Comparable to VFIIX Vanguard GNMA Fund

Post by tibbitts » Mon Mar 20, 2017 11:50 pm

I don't think the difference, particularly under $50k, is worth worrying about. Fidelity probably manages their fund a little more aggressively, partly in an attempt to make up for the higher expenses, but it has pretty consistently performed very similarly to the Vanguard fund. I'd prefer lower expenses too, but if you really want a GNMA fund (why?), then the Fidelity fund seems like a reasonable, if not necessarily optimal, choice.

sco
Posts: 533
Joined: Thu Sep 24, 2015 2:28 pm

Re: Fidelity Fund Comparable to VFIIX Vanguard GNMA Fund

Post by sco » Mon Mar 20, 2017 11:53 pm

tibbitts wrote:I don't think the difference, particularly under $50k, is worth worrying about. Fidelity probably manages their fund a little more aggressively, partly in an attempt to make up for the higher expenses, but it has pretty consistently performed as well or better than the Vanguard fund. I'd prefer lower expenses too, but if you really want a GNMA fund (why?), then the Fidelity fund seems like a reasonable, if not necessarily optimal, choice.



Just looking for a place to park another tier of E-Fund..... Perhaps should just TBM it and be done...

tibbitts
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Joined: Tue Feb 27, 2007 6:50 pm

Re: Fidelity Fund Comparable to VFIIX Vanguard GNMA Fund

Post by tibbitts » Tue Mar 21, 2017 12:35 am

sco wrote:
tibbitts wrote:I don't think the difference, particularly under $50k, is worth worrying about. Fidelity probably manages their fund a little more aggressively, partly in an attempt to make up for the higher expenses, but it has pretty consistently performed as well or better than the Vanguard fund. I'd prefer lower expenses too, but if you really want a GNMA fund (why?), then the Fidelity fund seems like a reasonable, if not necessarily optimal, choice.



Just looking for a place to park another tier of E-Fund..... Perhaps should just TBM it and be done...

I would think something more like ST Investment Grade (or maybe a muni fund depending on income.)

sco
Posts: 533
Joined: Thu Sep 24, 2015 2:28 pm

Re: Fidelity Fund Comparable to VFIIX Vanguard GNMA Fund

Post by sco » Tue Mar 21, 2017 11:51 am

tibbitts wrote:
sco wrote:
tibbitts wrote:I don't think the difference, particularly under $50k, is worth worrying about. Fidelity probably manages their fund a little more aggressively, partly in an attempt to make up for the higher expenses, but it has pretty consistently performed as well or better than the Vanguard fund. I'd prefer lower expenses too, but if you really want a GNMA fund (why?), then the Fidelity fund seems like a reasonable, if not necessarily optimal, choice.



Just looking for a place to park another tier of E-Fund..... Perhaps should just TBM it and be done...

I would think something more like ST Investment Grade (or maybe a muni fund depending on income.)



Muni not needed, but I can't find a ST Investment Grade at fidelity under 45 basis points either..

Valuethinker
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Re: Fidelity Fund Comparable to VFIIX Vanguard GNMA Fund

Post by Valuethinker » Tue Mar 21, 2017 12:23 pm

sco wrote:
tibbitts wrote:I don't think the difference, particularly under $50k, is worth worrying about. Fidelity probably manages their fund a little more aggressively, partly in an attempt to make up for the higher expenses, but it has pretty consistently performed as well or better than the Vanguard fund. I'd prefer lower expenses too, but if you really want a GNMA fund (why?), then the Fidelity fund seems like a reasonable, if not necessarily optimal, choice.



Just looking for a place to park another tier of E-Fund..... Perhaps should just TBM it and be done...


I would suggest you do that. There's c. 25% mortgage backed securities (Federal) in that fund, and in the long run the risk-return should not be so very different.

Best to minimize costs and maximize simplicity.

lack_ey
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Joined: Wed Nov 19, 2014 11:55 pm

Re: Fidelity Fund Comparable to VFIIX Vanguard GNMA Fund

Post by lack_ey » Tue Mar 21, 2017 12:30 pm

At a lot of places the sweep/cash accounts rates and short-term bond choices are lacking. This is for a reason.

Just use total bond and dilute with Fidelity Short-Term Treasury Bond Index Fund (FSBAX) for lower vol if desired, if you don't want to just trade the T-notes yourself. That's assuming you don't have a ~1% savings account somewhere, which would be similar/better at least for now. If you want credit risk, check the ETFs like iShares Core 1-5 Year USD Bond ETF (ISTB).

sco
Posts: 533
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Re: Fidelity Fund Comparable to VFIIX Vanguard GNMA Fund

Post by sco » Tue Mar 21, 2017 12:56 pm

lack_ey wrote:At a lot of places the sweep/cash accounts rates and short-term bond choices are lacking. This is for a reason.

Just use total bond and dilute with Fidelity Short-Term Treasury Bond Index Fund (FSBAX) for lower vol if desired, if you don't want to just trade the T-notes yourself. That's assuming you don't have a ~1% savings account somewhere, which would be similar/better at least for now. If you want credit risk, check the ETFs like iShares Core 1-5 Year USD Bond ETF (ISTB).



I already have the following for Emergency funds, I'm looking for something between 1% savings and other Taxable investments (mainly TSM), which would be at least 6months + or major disaster which I would be willing to have some fluctuation.

I understand that at this point in time the bond fund may not beat the 1% savings account, that is fine. I am just trying to identify what I could use at Fidelity. I could use Vanguard, but am attempting to streamline my accounts and am required to use Fidelity for employer accounts.

Some Cash (0%)
Local Bank account (<.1%)
Internet Bank (1%)
The BOND fund we are discussing now..
HELOC (If Available)
Other Taxable Investments.
Roth Contributions (Likely last resort)

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