Buying VTI or VTSMX for retirement in fidelity brokerage

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Chan
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Joined: Wed Apr 17, 2019 12:43 pm

Buying VTI or VTSMX for retirement in fidelity brokerage

Post by Chan » Wed Apr 17, 2019 1:01 pm

I have several fidelity funds, ETF and individual stocks in my rollover IRA, currently in fidelity brokerage account.
I am planning to consolidate and perhaps go with the 3 fund investment route, and I am inclined to go with VTSAX, VGTSX and VBTLX , which are all mutual funds. Also thinking to use only ETFs, such as VTI.
My questions are:
1. are Mutual funds better that the ETFs
2. are there any hidden fees that fidelity charges when buying VG funds or ETFs
3. My assets are in 7 figures, so the major move I am planning could end up costing more going with VG
4. Are there equivalent fidelity funds for the above planned portfolio
Please advise...

lakpr
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Joined: Fri Mar 18, 2011 9:59 am

Re: Buying VTI or VTSMX for retirement in fidelity brokerage

Post by lakpr » Wed Apr 17, 2019 4:00 pm

FSKAX is Fidelity’s equivalent of VTSAX
FTIHX is Fidelity’s equivalent of VGTSX
FXNAX is Fidelity’s equivalent of VBTLX

Regarding ETFs vs mutual funds, it is subjective.

All I can say is, I don’t see a compelling reason for you to move to Vanguard from Fidelity. Your asset allocation can be accomplished using above equivalent funds. There are no compelling cost differences either

fwellimort
Posts: 117
Joined: Tue Feb 12, 2019 9:41 am

Re: Buying VTI or VTSMX for retirement in fidelity brokerage

Post by fwellimort » Wed Apr 17, 2019 4:51 pm

1. ETF tends to be a hair more tax efficient than mutual funds. The exception however is Vanguard funds which is just as tax efficient as its ETF (due to patent).

2. Fidelity charges $4.95 when purchasing Vanguard ETF and $4.95 when selling Vanguard ETF.
In Fidelity, you purchase Fidelity funds.
In Vanguard, you purchase Vanguard funds.
Don't play dumb.

3. Cost more? Cost more by what?
In a taxable (regular) account, Fidelity funds cost more due to tax inefficiency. In a regular account, you are better off going ITOT/IXUS/FXNAX which is higher in net fees after share lending vs Vanguard ETF equivalents
In an IRA/401(k), yes, Fidelity funds will probably return more due to lower fees. But the fees are sooo overstated here.

Fidelity's equivalent for VTSAX is FSKAX.
VTSAX currently has 0.04% fee while FSKAX has 0.015% fee. Clearly, FSKAX is the better option in fees, right?

Let's compare both from 3/31/2009 to today. Both started $10,000.
FSKAX = $44,124.
VTSAX = $44,314
It seems VTSAX returned "a bit more". It's literally just noise at this point and the deciding factor is more of which index will return more when comparing the two. Both tracks a slightly different index at end of day (differences are negligible so you get the idea).

4.
In tax advantaged account:
VTSAX = FSKAX or a "similar" product: FZROX
VGTSX does not exist anymore. It's now VTIAX. Note its ETF equivalent, VXUS, has lower fee. VXUS = FTIHX
VBTLX = FXNAX

In regular account (to get the most bang for buck in tax efficiency):
VTI = VTSAX : ITOT
VXUS: IXUS
VBTLX : FXNAX
Bonds don't behave like stocks so don't worry much.

-------------------------------------------------------------------------------------------
If you are fee paranoid though:
In a regular account: VTIAX/VTI VXUS FXNAX
In a tax advantaged account: FZROX FZILX FXNAX (Note FZILX is closer to FSGGX, not FTIHX. It misses on small caps)
You know.. for those who think $2 for $10,000 is world ending doomsday or whatever and forget that different funds track different indexes (and that fee can be cancelled with the noise).
Last edited by fwellimort on Wed Apr 17, 2019 4:56 pm, edited 1 time in total.

neilpilot
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Location: Memphis area

Re: Buying VTI or VTSMX for retirement in fidelity brokerage

Post by neilpilot » Wed Apr 17, 2019 4:56 pm

fwellimort wrote:
Wed Apr 17, 2019 4:51 pm

2. Fidelity charges $4.95 when purchasing Vanguard ETF and $4.95 when selling Vanguard ETF.
In Fidelity, you purchase Fidelity funds.
In Vanguard, you purchase Vanguard funds.
Don't play dumb.
So, lets suppose the OP's 7-figure assets were all invested in Vanguard ETFs, using the 3-fund investment route. Horrors; that would cost the OP almost $15 in commission to buy >$1M in ETFs.

fwellimort
Posts: 117
Joined: Tue Feb 12, 2019 9:41 am

Re: Buying VTI or VTSMX for retirement in fidelity brokerage

Post by fwellimort » Wed Apr 17, 2019 4:58 pm

I mean $30 is still $30 ($15 buy, $15 sell).

I rather spend that money and buy myself a nice lunch instead. But up to OP.
Opening a Vanguard account takes a few minutes and there's no real reason why OP should prefer Vanguard funds in Fidelity over Fidelity funds when both do the same job.
Instant $30 return on investment by choosing Fidelity funds in his fidelity brokerage.
(shrugs)

123
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Joined: Fri Oct 12, 2012 3:55 pm

Re: Buying VTI or VTSMX for retirement in fidelity brokerage

Post by 123 » Wed Apr 17, 2019 5:22 pm

The Vanguard mutual fund transaction fee at Fidelity for a purchase is $75.00 so it is likely more economical to use Vanguard ETFs at Fidelity than Vanguard mutual funds at Fidelity. While the Vanguard mutual fund transaction fee is high at Fidelity I have gratefully paid it a couple of times when I was converting accounta to a 100% Vanguard LifeStrategy mutual fund. Depending on how much you are buying and how long you plan to hold it a $75 fee may be inconsequential if you have a preference for holding things at Fidelity.
The closest helping hand is at the end of your own arm.

pward
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Joined: Fri Dec 21, 2018 8:18 pm

Re: Buying VTI or VTSMX for retirement in fidelity brokerage

Post by pward » Wed Apr 17, 2019 5:36 pm

Yeah, I would stick with Fidelity funds and iShares ETF's if you're at Fidelity. There's no real reason to choose Vanguard funds/ETF's over Fidelity/iShares funds/ETF's if you're at Fidelity.

Capricorn51
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Joined: Fri Jan 11, 2019 2:26 pm

Re: Buying VTI or VTSMX for retirement in fidelity brokerage

Post by Capricorn51 » Wed Apr 17, 2019 7:26 pm

123 wrote:
Wed Apr 17, 2019 5:22 pm
The Vanguard mutual fund transaction fee at Fidelity for a purchase is $75.00 so it is likely more economical to use Vanguard ETFs at Fidelity than Vanguard mutual funds at Fidelity. While the Vanguard mutual fund transaction fee is high at Fidelity I have gratefully paid it a couple of times when I was converting accounta to a 100% Vanguard LifeStrategy mutual fund. Depending on how much you are buying and how long you plan to hold it a $75 fee may be inconsequential if you have a preference for holding things at Fidelity.
I am almost totally in Fidelity, and have purchased the Vanguard ETF's (including VTI) in my taxable account. I also have some FSKAX in my Fidelity IRA.

UpperNwGuy
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Joined: Sun Oct 08, 2017 7:16 pm

Re: Buying VTI or VTSMX for retirement in fidelity brokerage

Post by UpperNwGuy » Wed Apr 17, 2019 8:26 pm

I would buy FSKAX instead of VTI or VTSMX.

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