Fidelity ZERO funds now available via BrokerageLink

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HEDGEFUNDIE
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Fidelity ZERO funds now available via BrokerageLink

Post by HEDGEFUNDIE » Wed Jul 31, 2019 12:25 am

I was able to not only buy the new Fidelity ZERO Extended Market Index Fund but also set Automatic Purchases for new contributions.

A great option for folks who don’t have low fee funds in their standard Fidelity 401k lineup.

am
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Re: Fidelity ZERO funds now available via BrokerageLink

Post by am » Wed Jul 31, 2019 8:06 am

The fees for the other fidelity index funds are almost negligible. I am a bit concerned about the indexes these zero funds follow and possible tracking error in the future. Plus fidelity is a profit motivated firm and I wonder what future surprises these funds will hold?

mervinj7
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Re: Fidelity ZERO funds now available via BrokerageLink

Post by mervinj7 » Wed Jul 31, 2019 10:33 am

am wrote:
Wed Jul 31, 2019 8:06 am
The fees for the other fidelity index funds are almost negligible. I am a bit concerned about the indexes these zero funds follow and possible tracking error in the future. Plus fidelity is a profit motivated firm and I wonder what future surprises these funds will hold?
Furthermore, it seems most of the constituent companies in these index funds are also profit motivated firms. Should we be wary? :twisted:

sergio
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Re: Fidelity ZERO funds now available via BrokerageLink

Post by sergio » Wed Jul 31, 2019 10:55 am

am wrote:
Wed Jul 31, 2019 8:06 am
The fees for the other fidelity index funds are almost negligible. I am a bit concerned about the indexes these zero funds follow and possible tracking error in the future. Plus fidelity is a profit motivated firm and I wonder what future surprises these funds will hold?
The tracking error could be in your favor ...

BogleMelon
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Re: Fidelity ZERO funds now available via BrokerageLink

Post by BogleMelon » Wed Jul 31, 2019 10:57 am

sergio wrote:
Wed Jul 31, 2019 10:55 am
am wrote:
Wed Jul 31, 2019 8:06 am
The fees for the other fidelity index funds are almost negligible. I am a bit concerned about the indexes these zero funds follow and possible tracking error in the future. Plus fidelity is a profit motivated firm and I wonder what future surprises these funds will hold?
The tracking error could be in your favor ...
I would call it then "uncompensated risk"
I personally chose to stick with their traditional index funds for the same reason
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

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vineviz
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Re: Fidelity ZERO funds now available via BrokerageLink

Post by vineviz » Wed Jul 31, 2019 11:43 am

BogleMelon wrote:
Wed Jul 31, 2019 10:57 am
sergio wrote:
Wed Jul 31, 2019 10:55 am
am wrote:
Wed Jul 31, 2019 8:06 am
The fees for the other fidelity index funds are almost negligible. I am a bit concerned about the indexes these zero funds follow and possible tracking error in the future. Plus fidelity is a profit motivated firm and I wonder what future surprises these funds will hold?
The tracking error could be in your favor ...
I would call it then "uncompensated risk"
I personally chose to stick with their traditional index funds for the same reason
The compensation is the lack of management fee. The compensation may be small, but then again so is the risk.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

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ruralavalon
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Re: Fidelity ZERO funds now available via BrokerageLink

Post by ruralavalon » Wed Jul 31, 2019 12:01 pm

HEDGEFUNDIE wrote:
Wed Jul 31, 2019 12:25 am
I was able to not only buy the new Fidelity ZERO Extended Market Index Fund but also set Automatic Purchases for new contributions.

A great option for folks who don’t have low fee funds in their standard Fidelity 401k lineup.
Is this true for any 401k plan which includes the BrokerageLink, or does it vary depending on the particular employer's plan?
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

decapod10
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Re: Fidelity ZERO funds now available via BrokerageLink

Post by decapod10 » Wed Jul 31, 2019 12:38 pm

I thought it was always an option? I remember considering buying them once and thought they were there, but I could be mistaken. I assumed that everything normally available in a brokerage account is available in brokerage link.

Edit: looking at some random BrokerageLink brochures, looks like the funds available may "depend on the guidelines set by your employer", so I suppose there is still some control by the employer.

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whodidntante
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Re: Fidelity ZERO funds now available via BrokerageLink

Post by whodidntante » Wed Jul 31, 2019 12:48 pm

am wrote:
Wed Jul 31, 2019 8:06 am
The fees for the other fidelity index funds are almost negligible. I am a bit concerned about the indexes these zero funds follow and possible tracking error in the future. Plus fidelity is a profit motivated firm and I wonder what future surprises these funds will hold?
Do you think that other index providers like S&P, MSCI, FTSE, and CRSP are beholden to you or to their fund companies who give them money?

am
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Re: Fidelity ZERO funds now available via BrokerageLink

Post by am » Wed Jul 31, 2019 1:08 pm

whodidntante wrote:
Wed Jul 31, 2019 12:48 pm
am wrote:
Wed Jul 31, 2019 8:06 am
The fees for the other fidelity index funds are almost negligible. I am a bit concerned about the indexes these zero funds follow and possible tracking error in the future. Plus fidelity is a profit motivated firm and I wonder what future surprises these funds will hold?
Do you think that other index providers like S&P, MSCI, FTSE, and CRSP are beholden to you or to their fund companies who give them money?
I just don’t trust the zero funds and their short record. Seems gimmicky. I’ll wait on these. My 401l is something like .01, .02 and .06 er. This is not a big deal.

Jack FFR1846
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Re: Fidelity ZERO funds now available via BrokerageLink

Post by Jack FFR1846 » Wed Jul 31, 2019 1:20 pm

Zeros are coming up on a year. As some have noted, I split my equity position on Aug 6 of last year between FSKAX and FZROX. A few weeks ago, having watched Zero consistently beat KAX, I sold out my KAX position and am now 100% Zero. I could care less if it has tracking error. It makes me more money. Don't fear the reaper.
Bogle: Smart Beta is stupid

UpperNwGuy
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Re: Fidelity ZERO funds now available via BrokerageLink

Post by UpperNwGuy » Wed Jul 31, 2019 1:24 pm

am wrote:
Wed Jul 31, 2019 1:08 pm
whodidntante wrote:
Wed Jul 31, 2019 12:48 pm
am wrote:
Wed Jul 31, 2019 8:06 am
The fees for the other fidelity index funds are almost negligible. I am a bit concerned about the indexes these zero funds follow and possible tracking error in the future. Plus fidelity is a profit motivated firm and I wonder what future surprises these funds will hold?
Do you think that other index providers like S&P, MSCI, FTSE, and CRSP are beholden to you or to their fund companies who give them money?
I just don’t trust the zero funds and their short record. Seems gimmicky. I’ll wait on these. My 401l is something like .01, .02 and .06 er. This is not a big deal.
Why don't you trust the zero funds? Is it because of the profit motive? If so, there are one heckuva lot of other aspects of investing that you ought not be trusting, because most of it has a profit motive. And, of course it is gimmicky. It's a loss leader. Our modern economy is full of loss leaders. I take advantage of loss leaders whenever I can.

123
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Re: Fidelity ZERO funds now available via BrokerageLink

Post by 123 » Wed Jul 31, 2019 2:26 pm

I think Fidelity ZERO funds were an excellent move by Fidelity to keep their customers. The funds prospectus indicates that they are only available through Fidelity so you can't get them elsewhere. So if you want to move a taxable account with a position in a Fidelity ZERO fund you would have to sell your position and potentially have taxes due on the sale. While there is no similar tax issue in the IRA worlds the ZERO funds serve as an excellent anchor for a customer to maintain a relationship with Fidelity. If an individual has an IRA or other retirement account with a position in ZERO funds they are more likely to stay with Fidelity for additional accounts if they value the availability of ZERO funds.
The closest helping hand is at the end of your own arm.

riverguy
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Re: Fidelity ZERO funds now available via BrokerageLink

Post by riverguy » Wed Jul 31, 2019 7:45 pm

They’ve been available on brokeragelink for awhile now...

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abuss368
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Re: Fidelity ZERO funds now available via BrokerageLink

Post by abuss368 » Wed Jul 31, 2019 7:46 pm

Thanks for the update.
John C. Bogle: "Simplicity is the master key to financial success."

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Ice-9
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Re: Fidelity ZERO funds now available via BrokerageLink

Post by Ice-9 » Thu Aug 01, 2019 10:32 am

When Zero funds first came out with a big buzz a year ago, I immediately called Fidelity and asked about their availability in BrokerageLink. I was told in no uncertain terms that the Zero funds would not be made available there.

Then in February, I saw someone on the Friends of Vanguard Facebook Group posting about buying the Zero funds in his BrokerageLink. Surely he must be mistaken, I thought. Then I logged into Fidelity's website and successfully purchased the Zero funds in my BrokerageLink. I think it wasn't Fidelity's original plan to allow BrokerageLink purchases of the Zero funds, but they eventually realized it might be a good thing.

By March, I'd reorganized my entire portfolio to take advantage of the Zero funds. Since the International Zero fund is only large cap, I added Small Cap International Index to my Roth at Vanguard to make up for it. New overall portfolio weighted expense ratio is three basis points. :sharebeer

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ruralavalon
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Re: Fidelity ZERO funds now available via BrokerageLink

Post by ruralavalon » Thu Aug 01, 2019 10:49 am

riverguy wrote:
Wed Jul 31, 2019 7:45 pm
They’ve been available on brokeragelink for awhile now...
Does anyone know if this is true for any 401k plan which includes the BrokerageLink, or does it vary depending on the particular employer's plan?
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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Ice-9
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Re: Fidelity ZERO funds now available via BrokerageLink

Post by Ice-9 » Thu Aug 01, 2019 10:57 am

ruralavalon wrote:
Thu Aug 01, 2019 10:49 am
riverguy wrote:
Wed Jul 31, 2019 7:45 pm
They’ve been available on brokeragelink for awhile now...
Does anyone know if this is true for any 401k plan which includes the BrokerageLink, or does it vary depending on the particular employer's plan?
Just called Fidelity. Yes, any 401(k) plan with BrokerageLink (or in my case 401(a) and 457(b)) can purchase the Zero funds. This apparently has been true since the start of 2019.

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ruralavalon
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Re: Fidelity ZERO funds now available via BrokerageLink

Post by ruralavalon » Thu Aug 01, 2019 11:16 am

Ice-9 wrote:
Thu Aug 01, 2019 10:57 am
ruralavalon wrote:
Thu Aug 01, 2019 10:49 am
riverguy wrote:
Wed Jul 31, 2019 7:45 pm
They’ve been available on brokeragelink for awhile now...
Does anyone know if this is true for any 401k plan which includes the BrokerageLink, or does it vary depending on the particular employer's plan?
Just called Fidelity. Yes, any 401(k) plan with BrokerageLink (or in my case 401(a) and 457(b)) can purchase the Zero funds. This apparently has been true since the start of 2019.
Thanks for the current information :) .

I am a little surprised that the ZERO funds are available in all cases.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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nedsaid
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Re: Fidelity ZERO funds now available via BrokerageLink

Post by nedsaid » Thu Aug 01, 2019 11:38 am

Pretty astonishing that the ordinary investor can invest at Institutional rates. The ZERO funds are even more astonishing.
A fool and his money are good for business.

soccerfreak
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Re: Fidelity ZERO funds now available via BrokerageLink

Post by soccerfreak » Fri Aug 02, 2019 2:47 am

UpperNwGuy wrote:
Wed Jul 31, 2019 1:24 pm
Why don't you trust the zero funds? Is it because of the profit motive? If so, there are one heckuva lot of other aspects of investing that you ought not be trusting, because most of it has a profit motive. And, of course it is gimmicky. It's a loss leader. Our modern economy is full of loss leaders. I take advantage of loss leaders whenever I can.
:thumbsup

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