Fidelity zero-fee index fund questions

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new2bogle2
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Fidelity zero-fee index fund questions

Post by new2bogle2 » Fri Apr 12, 2019 2:29 pm

I have a Fidelity account and at the moment I am using a version of the 3 fund portfolio with Fidelity as suggested by many on this forum. I was recently pointed to an article explaining Fidelity offers some index funds with zero fees. This sounds a little too good to be true, is it? Their fees are very low as it is, but for them to be even lower and reach zero might not technically be true. Is there a catch? Are these different form mutual funds in some way (ie ETFs of some sort)?
Would someone be able to help me form a 3 fund portfolio closely resembling the Boglehead's 3 Fund portfolio using zero-fee index funds at Fidelity please?

I have only found 3 Fidelity Zero-Fee index funds.
FNILX - Fidelity Zero Large Cap Index
FZROX - Fidelity Zero Total Market Index
FZILX - Fidelity Zero International Index

Does anyone know of a Bond index fund with Zero-Fees? Otherwise, can someone smarter than me let me know if the FZROX & FZILX are comparable funds to the Total Market Index and International Index, as is suggested for the Boglehead 3 Fund Portfolio please?

Thank you to anyone who can help.

mega317
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Re: Fidelity zero-fee index fund questions

Post by mega317 » Fri Apr 12, 2019 3:04 pm

It's a loss leader for them, try to get you in the door and hopefully get your money in some other way. I wouldn't say it's a catch, but the one thing is they are using their own index, which may or may not perform the same as other index funds. It will probably be too close to matter at all.
There is no zero bond fund.

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F150HD
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Re: Fidelity zero-fee index fund questions

Post by F150HD » Fri Apr 12, 2019 4:01 pm

new2bogle2 wrote:
Fri Apr 12, 2019 2:29 pm
I have a Fidelity account and at the moment...
Scroll down page at this URL

https://www.bogleheads.org/wiki/Fidelit ... t_Fidelity

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ruralavalon
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Re: Fidelity zero-fee index fund questions

Post by ruralavalon » Fri Apr 12, 2019 5:04 pm

new2bogle2 wrote:
Fri Apr 12, 2019 2:29 pm
I have a Fidelity account and at the moment I am using a version of the 3 fund portfolio with Fidelity as suggested by many on this forum. I was recently pointed to an article explaining Fidelity offers some index funds with zero fees. This sounds a little too good to be true, is it? Their fees are very low as it is, but for them to be even lower and reach zero might not technically be true. Is there a catch? Are these different form mutual funds in some way (ie ETFs of some sort)?
I think it's too early to tell whether or not the new Fidelity ZERO funds are an improvement over the older Fidelity stock index funds.

These are mutual funds not ETFs, they use proprietary indexes created just for Fidelity.

new2bogle2 wrote:
Fri Apr 12, 2019 2:29 pm
Would someone be able to help me form a 3 fund portfolio closely resembling the Boglehead's 3 Fund portfolio using zero-fee index funds at Fidelity please?

I have only found 3 Fidelity Zero-Fee index funds.
FNILX - Fidelity Zero Large Cap Index
FZROX - Fidelity Zero Total Market Index
FZILX - Fidelity Zero International Index

Does anyone know of a Bond index fund with Zero-Fees?
There is no zero fee bond fund.

To create "something closely resembling" the three-fund portfolio you could use:
FZROX - Fidelity Zero Total Market Index Fund;
FZILX - Fidelity Zero International Index Fund; and
FXNAX - Fidelity U.S. Bond Index Fund.

new2bogle2 wrote:
Fri Apr 12, 2019 2:29 pm
Otherwise, can someone smarter than me let me know if the FZROX & FZILX are comparable funds to the Total Market Index and International Index, as is suggested for the Boglehead 3 Fund Portfolio please?

Thank you to anyone who can help.
Fidelity ZERO International Index Fund (FZILX) does not include stocks of small-cap international companies.

Otherwise the funds seem similar to the older Fidelity stock index funds previously suggested for the three-fund portfolio. I think its too early to tell if their actual performance will be better than, or worse than, or the same as the older Fidelity stock index funds. My guess is that performance will be about the same.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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new2bogle2
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Re: Fidelity zero-fee index fund questions

Post by new2bogle2 » Sat Apr 13, 2019 12:57 pm

ruralavalon wrote:
Fri Apr 12, 2019 5:04 pm

Fidelity ZERO International Index Fund (FZILX) does not include stocks of small-cap international companies.

Otherwise the funds seem similar to the older Fidelity stock index funds previously suggested for the three-fund portfolio.
Thank you for a great and detailed reply.
Am I correct in saying it’s your opinion the ZERO total stock market fund most closely resembles the past fidelity funds used in the 3-fund portfolio? And, while the international is slightly different, it’s unclear if that’s going to be better or worse?

Does the vanguard international fund include small caps?

Thank you for helping

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new2bogle2
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Re: Fidelity zero-fee index fund questions

Post by new2bogle2 » Sat Apr 13, 2019 2:42 pm

F150HD wrote:
Fri Apr 12, 2019 4:01 pm
new2bogle2 wrote:
Fri Apr 12, 2019 2:29 pm
I have a Fidelity account and at the moment...
Scroll down page at this URL

https://www.bogleheads.org/wiki/Fidelit ... t_Fidelity
Thank you

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ruralavalon
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Location: Illinois

Re: Fidelity zero-fee index fund questions

Post by ruralavalon » Sat Apr 13, 2019 3:07 pm

new2bogle2 wrote:
Sat Apr 13, 2019 12:57 pm
ruralavalon wrote:
Fri Apr 12, 2019 5:04 pm

Fidelity ZERO International Index Fund (FZILX) does not include stocks of small-cap international companies.

Otherwise the funds seem similar to the older Fidelity stock index funds previously suggested for the three-fund portfolio.
Thank you for a great and detailed reply.
Am I correct in saying it’s your opinion the ZERO total stock market fund most closely resembles the past fidelity funds used in the 3-fund portfolio?

Yes.

new2bogle2 wrote:
Sat Apr 13, 2019 12:57 pm
And, while the international is slightly different, it’s unclear if that’s going to be better or worse?
The new Fidelity ZERO International Index Fund is less diversified than total international funds previously available.

In the past funds without stocks of international small-cap companies have done a little beffer than funds which included stocks of international small-cap companies. Morningstar, FTHIX vs FSGGX and VFWAX vs VTIAX. We can't know if the new Fidelity ZERO International fund's performance will be better or worse in the future until the future happens.



new2bogle2 wrote:
Sat Apr 13, 2019 12:57 pm
Does the vanguard international fund include small caps?
Both Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) and Fidelity® Total International Index (FTIHX) include stocks of international small-cap companies.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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new2bogle2
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Re: Fidelity zero-fee index fund questions

Post by new2bogle2 » Sun Apr 14, 2019 1:10 pm

ruralavalon wrote:
Sat Apr 13, 2019 3:07 pm
Stock Index Fund Admiral Shares (VTIAX) and Fidelity® Total International Index (FTIHX) include stocks of international small-cap companies.
You information was helpful. Thanks

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