Fidelity Funds to Make Three Fund Portfolio

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Topic Author
JCwinit22
Posts: 3
Joined: Sun Sep 15, 2019 10:01 am

Fidelity Funds to Make Three Fund Portfolio

Post by JCwinit22 » Sun Sep 15, 2019 10:29 am

Good Morning,

Thank you in advance for any help you can provide a new person to your site. I have a mishmash of investments in my 403b at Fidelity, so can you please help me figure out if this would work for a Three Fund Portfolio:

Fund 1: US Stocks
Fidelity Total Market Index Fund (FSKAX) .015% expense ratio.
=====================================================
Fund 2: Bonds

Fidelity U.S. Bond Index Fund (FXNAX) .025% expense ratio.

Instead FXNAX noted above, I could invest in Fidelity Total Bond Fund (FTBFX) but it is .45% expense ratio and is not an index. Or I could invest in some long term treasuries that are indexes. Is the US Bond okay at .025%?
=====================================================================
Fund 3: International Stocks

Fidelity® International Index Fund (FSPSX) .035% expense ratio - This looks like the only broad index fund available to me.

Thanks again and any help you can provide is much appreciate.

Sincerely yours,

John

Ferdinand2014
Posts: 1533
Joined: Mon Dec 17, 2018 6:49 pm

Re: Fidelity Funds to Make Three Fund Portfolio

Post by Ferdinand2014 » Sun Sep 15, 2019 10:53 am

JCwinit22 wrote:
Sun Sep 15, 2019 10:29 am
Good Morning,

Thank you in advance for any help you can provide a new person to your site. I have a mishmash of investments in my 403b at Fidelity, so can you please help me figure out if this would work for a Three Fund Portfolio:

Fund 1: US Stocks
Fidelity Total Market Index Fund (FSKAX) .015% expense ratio.
=====================================================
Fund 2: Bonds

Fidelity U.S. Bond Index Fund (FXNAX) .025% expense ratio.

Instead FXNAX noted above, I could invest in Fidelity Total Bond Fund (FTBFX) but it is .45% expense ratio and is not an index. Or I could invest in some long term treasuries that are indexes. Is the US Bond okay at .025%?
=====================================================================
Fund 3: International Stocks

Fidelity® International Index Fund (FSPSX) .035% expense ratio - This looks like the only broad index fund available to me.

Thanks again and any help you can provide is much appreciate.

Sincerely yours,

John
Perfect. Excellent choices. You don’t get emerging market with FSPSX, but you won’t miss much. If you have say 20% international equity in a 75/25 AA, that’s 15% total international. Of that, 22% would be emerging market if you picked say FZILX zero fee international fund. So 22% of 15% is 3.3%. So again, not missing anything. FXNAX is very low cost, total investment grade and would very much be your best bet with a 3 fund.
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett

ThriftyPhD
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Joined: Mon Jul 31, 2017 10:43 am

Re: Fidelity Funds to Make Three Fund Portfolio

Post by ThriftyPhD » Sun Sep 15, 2019 10:56 am

Looks like you have some nice index fund options.

Do you have investments outside of your 403b? IRA, Roth IRA, old 401k, taxable brokerage, etc? For example, if you had money in a Roth IRA, you might put that money into an index fund you can't get in your 403b.

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whodidntante
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Re: Fidelity Funds to Make Three Fund Portfolio

Post by whodidntante » Sun Sep 15, 2019 11:02 am

You can put emerging markets equities in your Roth IRA if you want to close the gap. I would not buy an expensive fund in the 403b just to get EM. It's actually a pretty good idea to put EM in your Roth since expected returns are high, assuming you aren't the type to get flung out of a roller coaster.

Topic Author
JCwinit22
Posts: 3
Joined: Sun Sep 15, 2019 10:01 am

Re: Fidelity Funds to Make Three Fund Portfolio

Post by JCwinit22 » Sun Sep 15, 2019 11:14 am

Thank you for your feedback on EM Funds. I looked, there are 186 investments to choose, and one of them is:

Fidelity Total International Index Fund (FTIHX) .06% expense ratio. The description says:

Objective
Seeks to provide investment results that correspond to the total return of foreign developed and emerging stock markets.
Strategy
Normally investing at least 80% of assets in securities included in the MSCI ACWI (All Country World Index) ex USA Investable Market Index and in depository receipts representing securities included in the index. The MSCI ACWI (All Country World Index) ex USA Investable Market Index is a market capitalization-weighted index designed to measure the investable equity market

This mentions emerging market, so do you think that may be better than FSPSX? It probably cannot hurt to have a small amount in emerging market.

Many thanks,

John


mervinj7
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Joined: Thu Mar 27, 2014 3:10 pm

Re: Fidelity Funds to Make Three Fund Portfolio

Post by mervinj7 » Sun Sep 15, 2019 11:44 am

Also, check out the Fidelity specific page.
https://www.bogleheads.org/wiki/Fidelity

Ferdinand2014
Posts: 1533
Joined: Mon Dec 17, 2018 6:49 pm

Re: Fidelity Funds to Make Three Fund Portfolio

Post by Ferdinand2014 » Sun Sep 15, 2019 12:36 pm

JCwinit22 wrote:
Sun Sep 15, 2019 11:14 am
Thank you for your feedback on EM Funds. I looked, there are 186 investments to choose, and one of them is:

Fidelity Total International Index Fund (FTIHX) .06% expense ratio. The description says:

Objective
Seeks to provide investment results that correspond to the total return of foreign developed and emerging stock markets.
Strategy
Normally investing at least 80% of assets in securities included in the MSCI ACWI (All Country World Index) ex USA Investable Market Index and in depository receipts representing securities included in the index. The MSCI ACWI (All Country World Index) ex USA Investable Market Index is a market capitalization-weighted index designed to measure the investable equity market

This mentions emerging market, so do you think that may be better than FSPSX? It probably cannot hurt to have a small amount in emerging market.

Many thanks,

John
It would be more comprehensive in that it has developed large cap blend, EM(22%) and small cap developed(11%). FSPSX has large cap blend only. Again the difference with most allocations will be from 1-4% of your total portfolio if you add an EM including fund. It won’t likely move the needle, but yes, FTIHX is more ‘complete’ and still extremely cheap.
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett

Topic Author
JCwinit22
Posts: 3
Joined: Sun Sep 15, 2019 10:01 am

Re: Fidelity Funds to Make Three Fund Portfolio

Post by JCwinit22 » Sun Sep 15, 2019 3:27 pm

Thank you all for your good advice and additional links and resources. I made the adjustments so this will help me very much. These changes will help simplify my investments also. I have a few small accounts from some other jobs, the most significant is a regular IRA. It is not a huge amount of money, but I should probably roll it over to vanguard and just have two accounts. Thanks again.

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