[Buying S&P 500 Index Fund - Fidelity or Vanguard?]

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6d1v7x3
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[Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by 6d1v7x3 »

[Title edited for clarity by moderator oldcomputerguy]

Hi there I have excess cash sitting around which I would like to put in an S&P 500 index fund. I absolutely will not need this money for 20 years. I'm having trouble deciding between Fidelity and Vanguard. I have no relationship with either but I know I want to go with one of them. If the amount matters, it's about $100k. If anyone has any advice I would greatly appreciate it. Thank you so much.
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Re: Index Fund

Post by RickBoglehead »

Doesn't matter.
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RedDog
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Re: Index Fund

Post by RedDog »

ETFs or mutual funds? It might matter if you’re investing in a taxable account.
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Re: Index Fund

Post by anon_investor »

RedDog wrote: Mon Jul 19, 2021 6:55 pm ETFs or mutual funds? It might matter if you’re investing in a taxable account.
+1. In a taxable account if you want mutual funds pick Vanguard, if ETFs it doesn't matter. In an IRA it doesn't matter.
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Re: Index Fund

Post by Doctor Rhythm »

Earlier his year, you posted that you had a traditional IRA at Fidelity. If you’re satisfied with them, I’d open your taxable account there as well.
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Re: Index Fund

Post by ruralavalon »

6d1v7x3 wrote: Mon Jul 19, 2021 6:50 pm Hi there I have excess cash sitting around which I would like to put in an S&P 500 index fund. I absolutely will not need this money for 20 years. I'm having trouble deciding between Fidelity and Vanguard. I have no relationship with either but I know I want to go with one of them. If the amount matters, it's about $100k. If anyone has any advice I would greatly appreciate it. Thank you so much.
Both are good choices, it's largely a matter of person preference. My personal preference is Vanguard.

Morningstar (1/20/2020) "The Best Fund Companies and Their Ratings", link. Vanguard is one of just five fund companies rated "high".

J.D.Power (4/27/2021), press release "2021 U.S. Self-Directed Investor Satisfaction Study" link. Vanguard is highest rated by investors for customer satisfaction.
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6d1v7x3
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Re: Index Fund

Post by 6d1v7x3 »

RedDog wrote: Mon Jul 19, 2021 6:55 pm ETFs or mutual funds? It might matter if you’re investing in a taxable account.
I know it will be a taxable account but I don't know anything about ETFs vs mutual funds.
Last edited by 6d1v7x3 on Mon Jul 19, 2021 7:38 pm, edited 1 time in total.
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Re: Index Fund

Post by Alto Astral »

I have both and like them equally. I like vanguard total stock market index fund so have all my taxable invested there.
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Re: Index Fund

Post by RedDog »

6d1v7x3 wrote: Mon Jul 19, 2021 7:32 pm
RedDog wrote: Mon Jul 19, 2021 6:55 pm ETFs or mutual funds? It might matter if you’re investing in a taxable account.
I knowo it will be a taxable account but I don't know anything about ETFs vs mutual funds.
The linked wiki page should help you decide.

https://www.bogleheads.org/wiki/ETFs_vs_mutual_funds
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6d1v7x3
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Re: Index Fund

Post by 6d1v7x3 »

RedDog wrote: Mon Jul 19, 2021 7:37 pm
6d1v7x3 wrote: Mon Jul 19, 2021 7:32 pm
RedDog wrote: Mon Jul 19, 2021 6:55 pm ETFs or mutual funds? It might matter if you’re investing in a taxable account.
I knowo it will be a taxable account but I don't know anything about ETFs vs mutual funds.
The linked wiki page should help you decide.

https://www.bogleheads.org/wiki/ETFs_vs_mutual_funds
Based on my particular situation can you please recommend which one I should go with? All this stuff is a bit confusing to me.
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Re: Index Fund

Post by Wiggums »

6d1v7x3 wrote: Mon Jul 19, 2021 6:50 pm Hi there I have excess cash sitting around which I would like to put in an S&P 500 index fund. I absolutely will not need this money for 20 years. I'm having trouble deciding between Fidelity and Vanguard. I have no relationship with either but I know I want to go with one of them. If the amount matters, it's about $100k. If anyone has any advice I would greatly appreciate it. Thank you so much.
We have half our money at Vanguard and half at Fidelity. I buy Vanguard funds at Vanguard and Fidelity funds at Fidelity. Vanguard has more fund choices and Fidelity has the prettier user interface. Your money is safe with either. We have been with both for over 20 years.

I transferred money from T. Rowe Price to Vanguard and T. Rowe Price to Fidelity. Fidelity got it done in 15 days and knew what TRP required. Vanguard used a docusign form which TRP rejected. TRP called me and told me how to resolve the issue.
Last edited by Wiggums on Mon Jul 19, 2021 8:28 pm, edited 2 times in total.
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Re: Index Fund

Post by etfan »

6d1v7x3 wrote: Mon Jul 19, 2021 7:40 pm
RedDog wrote: Mon Jul 19, 2021 7:37 pm
6d1v7x3 wrote: Mon Jul 19, 2021 7:32 pm
RedDog wrote: Mon Jul 19, 2021 6:55 pm ETFs or mutual funds? It might matter if you’re investing in a taxable account.
I knowo it will be a taxable account but I don't know anything about ETFs vs mutual funds.
The linked wiki page should help you decide.

https://www.bogleheads.org/wiki/ETFs_vs_mutual_funds
Based on my particular situation can you please recommend which one I should go with? All this stuff is a bit confusing to me.
ETF is probably better for two reasons:

1- It's a taxable account and ETFs are more tax efficient.
https://www.bogleheads.org/wiki/Exchang ... fund#Taxes

Edit: Looking at both at Vanguard, however, both the ETF and the Mutual Fund seem to have the same tax efficiency.

2- The S&P 500 ETF (VOO) is cheaper than the S&P 500 Mutual Fund (VFIAX). See their expense ratios:
https://investor.vanguard.com/etf/profile/overview/VOO
https://investor.vanguard.com/mutual-fu ... view/VFIAX
Last edited by etfan on Mon Jul 19, 2021 8:32 pm, edited 1 time in total.
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Re: Index Fund

Post by ChinchillaWhiplash »

If you are lump summing it into one fund and not adding along the way (other than dividend reinvesting) you should go with the ETF version. Should be a little bit more tax efficient. Go with the fund that has the lower turn over level.
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Re: Index Fund

Post by Wiggums »

6d1v7x3 wrote: Mon Jul 19, 2021 7:32 pm
RedDog wrote: Mon Jul 19, 2021 6:55 pm ETFs or mutual funds? It might matter if you’re investing in a taxable account.
I know it will be a taxable account but I don't know anything about ETFs vs mutual funds.
I like mutual funds because I schedule my purchases and it’s easier for my DW.

ETFs are more portable between brokers.
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Re: Index Fund

Post by arcticpineapplecorp. »

etfan wrote: Mon Jul 19, 2021 8:27 pm ETF is probably better for two reasons:

1- It's a taxable account and ETFs are more tax efficient.
https://www.bogleheads.org/wiki/Exchang ... fund#Taxes

Edit: Looking at both at Vanguard, however, both the ETF and the Mutual Fund seem to have the same tax efficiency.
thanks for editing. I was going to mention in that link:
A potential tax disadvantage to the creation-redemption process is that ETFs may redeem stocks which have paid a dividend before meeting the 61-day holding requirement for qualified dividends; as a result, some ETFs have fewer qualified dividends than similar mutual funds.[16]

Most Vanguard ETFs have no tax advantage over the corresponding Vanguard index funds, because in most cases the ETF is a share class of the index fund and thus the mutual fund shares the tax benefits of the ETF

https://www.bogleheads.org/wiki/Exchang ... fund#Taxes
as for the lower cost in etf form, i don't think it's going to make that much of a difference in the long term unless you're talking millions invested.
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Re: Index Fund

Post by greenway23 »

If you’re on the fence between MFs/ETFs and Vanguard/Fidelity, you could start with a MF at Vanguard. If you decide you don’t like MFs, you could convert your shares to the ETF share class (without tax consequences). If you decide you don’t like VG, you could transfer those ETF shares to Fidelity.

I’d suggest investing in a total US market fund rather than S&P 500. The former is more diversified and the returns will be almost identical . There are countless posters on this board who invested in an S&P 500 fund years ago and now want to transition to Bogleheads 3 fund portfolio but are “stuck” with the S&P 500 fund in taxable, and have to add an extended market fund to approximate the total US market.
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Re: Index Fund

Post by pkcrafter »

6d1v7x3 wrote: Mon Jul 19, 2021 7:32 pm
RedDog wrote: Mon Jul 19, 2021 6:55 pm ETFs or mutual funds? It might matter if you’re investing in a taxable account.
I know it will be a taxable account but I don't know anything about ETFs vs mutual funds.
Here is an explanation of the difference between mutual funds and ETFs from Fidelity.

https://www.fidelity.com/learning-cente ... ht-for-you

Here is another option - Fidelity ZERO Total Market Index

https://fundresearch.fidelity.com/mutua ... =sq-NavBar

The zero means there is zero expense ratio.

You should plan out your total portfolio before opting for a single fund.


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Re: Index Fund

Post by wetgear »

6d1v7x3 wrote: Mon Jul 19, 2021 6:50 pm Hi there I have excess cash sitting around which I would like to put in an S&P 500 index fund. I absolutely will not need this money for 20 years. I'm having trouble deciding between Fidelity and Vanguard. I have no relationship with either but I know I want to go with one of them. If the amount matters, it's about $100k. If anyone has any advice I would greatly appreciate it. Thank you so much.
FIdelity because you have an IRA there.
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by lazynovice »

It doesn’t really matter because both are fine.

I personally prefer ETFs but if you are new to this, I’d start with mutual funds. They are less confusing for a newbie. If you decide to go with ETFs, use Fidelity so you can access fractional share purchasing. You can buy Vanguard ETFs for free at Fidelity.

Fidelity’s mutual funds are generally cheaper than Vanguard’s. They used to be less tax efficient because they threw off capital gains but that was not true for 2020 and looking like it won’t be for 2021 either.

https://www.bogleheads.org/wiki/Mutual_ ... Bogleheads

https://www.bogleheads.org/wiki/ETFs_for_Bogleheads
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by bigfry »

It really doesn't matter. Fidelity undercuts vanguard by a few basis points on their index funds. I recently transferred everything to fidelity so I can see my entire investment portfolio in one place. They are both great companies.
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by nisiprius »

One of the characteristics of (broad market) index funds and ETFs is that they are "commodities" in the wide sense of the term. Like gasoline, it really doesn't matter what brand you get.

I would mildly suggest that you consider total stock market index funds in place of S&P 500 funds, not that it matters much, but I would say the total market should be the default unless you have some particular reason why you want to own the stocks in the S&P 500 stocks specifically.

Having had accounts at both Vanguard and Fidelity I would say that I was happy at both, and see little to choose between them... and little to choose between Vanguard index funds and their Fidelity counterparts. When I decided to consolidate to a single firm, I chose Vanguard but it was really very close to a coin-flip. My reasons were fan appreciation, the feeling that Vanguard is "the big name" in index funds, and a vague general feeling of liking Vanguard's style.

Wetgear's suggestion "FIdelity because you have an IRA there" makes a lot of sense. I would say that if you personally want to keep things simple and avoid a bunch of small nuisance chores and issues involved with accounts at more than one firm, keep everything at Fidelity. On the other hand, if you want to have accounts at more than one firm on principle, then, of course, you could choose Vanguard for that reason.
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by ruralavalon »

6d1v7x3 wrote: Mon Jul 19, 2021 6:50 pm [Title edited for clarity by moderator oldcomputerguy]

Hi there I have excess cash sitting around which I would like to put in an S&P 500 index fund. I absolutely will not need this money for 20 years. I'm having trouble deciding between Fidelity and Vanguard. I have no relationship with either but I know I want to go with one of them. If the amount matters, it's about $100k. If anyone has any advice I would greatly appreciate it. Thank you so much.
6d1v7x3 wrote: Mon Jul 19, 2021 7:32 pm
RedDog wrote: Mon Jul 19, 2021 6:55 pm ETFs or mutual funds? It might matter if you’re investing in a taxable account.
I know it will be a taxable account but I don't know anything about ETFs vs mutual funds.
6d1v7x3 wrote: Mon Jul 19, 2021 7:40 pm
RedDog wrote: Mon Jul 19, 2021 7:37 pm
6d1v7x3 wrote: Mon Jul 19, 2021 7:32 pm
RedDog wrote: Mon Jul 19, 2021 6:55 pm ETFs or mutual funds? It might matter if you’re investing in a taxable account.
I knowo it will be a taxable account but I don't know anything about ETFs vs mutual funds.
The linked wiki page should help you decide.

https://www.bogleheads.org/wiki/ETFs_vs_mutual_funds
Based on my particular situation can you please recommend which one I should go with? All this stuff is a bit confusing to me.
As I said before either Vanguard or Fidelity is a good choice. My personal preference is Vanguard.

I suggest a total market index fund rather than a S&P 500 index fund, for a little better diversification.

If you choose an account at Fidelity then I suggest that you use exchange traded funds (ETFs) because more tax-efficient. Fidelity does not offer a total stock market ETF. At Fidelity you can use either Vanguard Total Stock Market ETF (VTI) or iShares Core S&P Total US Stock Market ETF (ITOT). Both trade commission free at Fidelity.

At Vanguard you can use either a regular mutual fund or an ETF, either Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) or Vanguard Total Stock Market ETF (VTI). Both are very tax-efficient, the ETF is just another share class of the mutual fund. It's largely a matter of personal preference, my personal preference is for the regular mutual fund because of the convenience of automatic investing.

At Vanguard you can convert the Vanguard mutual fund to the Vanguard ETF without creating any income tax liability, but not the other way. So the regular mutual fund is more flexible in that way.
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by ruralavalon »

I don't have any accounts at Fidelity, so have no personal knowledge of their rules on using exchange traded funds (ETFs). Here is an article which describes practices at Fidelity for buying fractional shares of ETFs. TFB blog post (2/18/2020), "Fidelity Accepts ETF Orders in Dollars with Fractional Shares", link. I don't know if you can set up automatic investing or automatic reinvestment of distributions.
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by 6d1v7x3 »

If I were to go with Fidelity, would getting a mutual fund or ETF be the most tax-efficient for my situation? If the answer is ETF then would that entail a lot more work than a mutual fund? What would I need to do on my part?
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Re: Index Fund

Post by bertilak »

pkcrafter wrote: Tue Jul 20, 2021 9:08 am Here is another option - Fidelity ZERO Total Market Index

https://fundresearch.fidelity.com/mutua ... =sq-NavBar

The zero means there is zero expense ratio.
I believe it also means you cannot do a transfer-in-kind if you ever want to move to a different broker.

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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by wetgear »

6d1v7x3 wrote: Tue Jul 20, 2021 3:40 pm If I were to go with Fidelity, would getting a mutual fund or ETF be the most tax-efficient for my situation? If the answer is ETF then would that entail a lot more work than a mutual fund? What would I need to do on my part?
In taxable accounts ETFs are slightly more tax efficient. It might be slightly more work when dealing with dividends and not having fractional shares to use up every last dollar in the account but it's nothing to worry about.
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Re: Index Fund

Post by ruralavalon »

bertilak wrote: Tue Jul 20, 2021 3:46 pm
pkcrafter wrote: Tue Jul 20, 2021 9:08 am Here is another option - Fidelity ZERO Total Market Index

https://fundresearch.fidelity.com/mutua ... =sq-NavBar

The zero means there is zero expense ratio.
I believe it also means you cannot do a transfer-in-kind if you ever want to move to a different broker.
The ZERO funds are new with little performance history, and use unique indexes created just for Fidelity. The ZERO total market fund has not so far produced a benefit for the investor (either in better returns or lower volatility). Portfolio Visualizer, 2019-2021. It doesn't appear that the tiny difference in expense ratios has made a positive difference so far.
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Re: Index Fund

Post by jmch1990 »

6d1v7x3 wrote: Mon Jul 19, 2021 7:40 pm
RedDog wrote: Mon Jul 19, 2021 7:37 pm
6d1v7x3 wrote: Mon Jul 19, 2021 7:32 pm
RedDog wrote: Mon Jul 19, 2021 6:55 pm ETFs or mutual funds? It might matter if you’re investing in a taxable account.
I knowo it will be a taxable account but I don't know anything about ETFs vs mutual funds.
The linked wiki page should help you decide.

https://www.bogleheads.org/wiki/ETFs_vs_mutual_funds
Based on my particular situation can you please recommend which one I should go with? All this stuff is a bit confusing to me.
For your situation I would recommend you go with Fidelity. Or, go with Vanguard.

What I would not recommend is the third option that you are unintentionally choosing, which is keeping your money out of the market entirely because you are struggling to decide between two excellent options.

I have a retirement account at Fidelity and a personal/Roth IRA at Vanguard. Both do the job just fine. Fidelity has a bit cleaner interface and is slightly easier to navigate. Vanguard has the history of best-in-class funds. People also like Vanguard's ownership structure. There are tax efficiencies, as this thread has discussed.

But IMO the difference between the two brokerages for you, given what your needs are at this moment, is vastly outweighed by the difference between just choosing one and the analysis paralysis that leads to $100K sitting idly.

So pick one and don't look back. Flip a coin if you want. That is my personal recommendation.
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by lakpr »

Vanguard has a patent for its S&P 500 Index and Total Stock Market Index funds, that uses the ETF class shares to eliminate the capital gains distributions from its mutual funds. Google the term "Vanguard Patent".

Did that for you: https://www.bloomberg.com/graphics/2019 ... tax-dodge/

So, if the choice is not ETF, you will be *slightly* better off choosing Vanguard fund over Fidelity fund. Especially with the S&P 500 fund. Capital gains distributions come into play only if the holding fund sells some of its stock portfolio ... which, in an index fund, means it happens only when a particular company is booted out of the index. Or acquired. Examples: GE, Bayer acquiring Monsanto, etc.
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by lazynovice »

lakpr wrote: Tue Jul 20, 2021 6:05 pm Vanguard has a patent for its S&P 500 Index and Total Stock Market Index funds, that uses the ETF class shares to eliminate the capital gains distributions from its mutual funds. Google the term "Vanguard Patent".

Did that for you: https://www.bloomberg.com/graphics/2019 ... tax-dodge/

So, if the choice is not ETF, you will be *slightly* better off choosing Vanguard fund over Fidelity fund. Especially with the S&P 500 fund. Capital gains distributions come into play only if the holding fund sells some of its stock portfolio ... which, in an index fund, means it happens only when a particular company is booted out of the index. Or acquired. Examples: GE, Bayer acquiring Monsanto, etc.
Fidelity’s S&P 500 fund hasn’t distributed capital gains since April of 2019. They have somehow figured out how to switch stocks out in second half of 2019 and all of 2020 without distributing gains. I’d love to know how but they have. Same with Total Market index fund.
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by lakpr »

lazynovice wrote: Tue Jul 20, 2021 6:28 pm Fidelity’s S&P 500 fund hasn’t distributed capital gains since April of 2019. They have somehow figured out how to switch stocks out in second half of 2019 and all of 2020 without distributing gains. I’d love to know how but they have. Same with Total Market index fund.
Didn't know that, but good to know! I guess that eliminates the slight advantage of Vanguard funds over Fidelity funds, and it truly is a toss up or the choice should be based on other preferences than expense ratios / tax efficiency.
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by Fudgie »

I initially had my 401K at Fidelity, and my Roth IRA and taxable accounts at Vanguard. I merged it all into Fidelity for the superior online interface, and ease of management of all my accounts.

At Fidelity, you would be best served by using ETFs in taxable. Fidelity no longer restricts you to the purchase of whole shares of ETFs. You can now purchase fractional ETF shares, so you just specify the dollar amount you want to buy and every penny will be invested. No stray nickels need be left in the default money market fund.

I would go with Fidelity (and I have!)

Good luck!
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by Triple digit golfer »

Vanguard mutual fund, VFIAX. I hold it in my taxable account and it is my largest holding in any account.
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by greenway23 »

lakpr wrote: Tue Jul 20, 2021 6:57 pm
lazynovice wrote: Tue Jul 20, 2021 6:28 pm Fidelity’s S&P 500 fund hasn’t distributed capital gains since April of 2019. They have somehow figured out how to switch stocks out in second half of 2019 and all of 2020 without distributing gains. I’d love to know how but they have. Same with Total Market index fund.
Didn't know that, but good to know! I guess that eliminates the slight advantage of Vanguard funds over Fidelity funds, and it truly is a toss up or the choice should be based on other preferences than expense ratios / tax efficiency.
I don’t think the fact that capital gains haven’t been distributed for a couple years means that it won’t happen ever again. I think Lazynovice was just making an observation about two particular years. I personally would prefer to use Fidelity mutual funds but use Vanguard instead because I don’t want to deal with the uncertainty each year. If Fidelity develops a dual class structure after Vanguard’s patent expires, I will probably invest in those funds moving forward.
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by 6d1v7x3 »

As far as tax efficiency goes, does everyone agree that if I went with Vanguard I could use a mutual fund whereas if I went with Fidelity it would have to be an ETF?
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by ruralavalon »

6d1v7x3 wrote: Wed Jul 21, 2021 8:26 am As far as tax efficiency goes, does everyone agree that if I went with Vanguard I could use a mutual fund whereas if I went with Fidelity it would have to be an ETF?
Yes, at Vanguard it could be either and at Fidelity and ETF is preferred for tax-efficiency.
Last edited by ruralavalon on Wed Jul 21, 2021 8:52 am, edited 1 time in total.
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by UpperNwGuy »

6d1v7x3 wrote: Wed Jul 21, 2021 8:26 am As far as tax efficiency goes, does everyone agree that if I went with Vanguard I could use a mutual fund whereas if I went with Fidelity it would have to be an ETF?
Yes. This is the best solution, but only by a hair.

In the interest of full disclosure, I own Fidelity's S&P 500 index fund FXAIX in a taxable account, and it has tracked very closely to Vanguard's S&P 500 index fund VFIAX which I also hold in a taxable account. The tax efficiency of FXAIX is almost as good as VFIAX.
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6d1v7x3
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by 6d1v7x3 »

I'm very sorry if I'm being redundant but I still don't understand what I would have to do with the ETF option. Does this mean that I have to do some sort of manual thing on a regular basis? If so, what specifically would I have to do?
02nz
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by 02nz »

6d1v7x3 wrote: Wed Jul 21, 2021 2:02 pm I'm very sorry if I'm being redundant but I still don't understand what I would have to do with the ETF option. Does this mean that I have to do some sort of manual thing on a regular basis? If so, what specifically would I have to do?
You'd have to place a trade manually for the ETF. Not hard, we're talking less than a minute of work, you just can't set up an automatic investment plan as you could with a mutual fund.
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6d1v7x3
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by 6d1v7x3 »

02nz wrote: Wed Jul 21, 2021 2:05 pm
6d1v7x3 wrote: Wed Jul 21, 2021 2:02 pm I'm very sorry if I'm being redundant but I still don't understand what I would have to do with the ETF option. Does this mean that I have to do some sort of manual thing on a regular basis? If so, what specifically would I have to do?
You'd have to place a trade manually for the ETF. Not hard, we're talking less than a minute of work, you just can't set up an automatic investment plan as you could with a mutual fund.
Thanks for your reply. How often would I have to do that?
02nz
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by 02nz »

6d1v7x3 wrote: Wed Jul 21, 2021 4:27 pm
02nz wrote: Wed Jul 21, 2021 2:05 pm
6d1v7x3 wrote: Wed Jul 21, 2021 2:02 pm I'm very sorry if I'm being redundant but I still don't understand what I would have to do with the ETF option. Does this mean that I have to do some sort of manual thing on a regular basis? If so, what specifically would I have to do?
You'd have to place a trade manually for the ETF. Not hard, we're talking less than a minute of work, you just can't set up an automatic investment plan as you could with a mutual fund.
Thanks for your reply. How often would I have to do that?
However often you needed to make a purchase. If it's just the $100K, once. If you had excess cash flow that you wanted to invest, as many do after maxing tax-advantaged accounts, once or twice a month.
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by Vanguard User »

I have both. Fidelity has better service tho.
Invictus002
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by Invictus002 »

For investing in S&P500, the gold standard is ETF called SPY. It's the oldest and largest ETF in the world. It's also the most liquid ETF in the world.

You can hold SPY with any brokerage and even transfer it in between.
tomsense76
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Re: Index Fund

Post by tomsense76 »

anon_investor wrote: Mon Jul 19, 2021 7:03 pm
RedDog wrote: Mon Jul 19, 2021 6:55 pm ETFs or mutual funds? It might matter if you’re investing in a taxable account.
+1. In a taxable account if you want mutual funds pick Vanguard, if ETFs it doesn't matter. In an IRA it doesn't matter.
+1
"Anyone who claims to understand quantum theory is either lying or crazy" -- Richard Feynman
tomsense76
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Re: Index Fund

Post by tomsense76 »

etfan wrote: Mon Jul 19, 2021 8:27 pm
6d1v7x3 wrote: Mon Jul 19, 2021 7:40 pm
RedDog wrote: Mon Jul 19, 2021 7:37 pm
6d1v7x3 wrote: Mon Jul 19, 2021 7:32 pm
RedDog wrote: Mon Jul 19, 2021 6:55 pm ETFs or mutual funds? It might matter if you’re investing in a taxable account.
I knowo it will be a taxable account but I don't know anything about ETFs vs mutual funds.
The linked wiki page should help you decide.

https://www.bogleheads.org/wiki/ETFs_vs_mutual_funds
Based on my particular situation can you please recommend which one I should go with? All this stuff is a bit confusing to me.
ETF is probably better for two reasons:

1- It's a taxable account and ETFs are more tax efficient.
https://www.bogleheads.org/wiki/Exchang ... fund#Taxes

Edit: Looking at both at Vanguard, however, both the ETF and the Mutual Fund seem to have the same tax efficiency.

2- The S&P 500 ETF (VOO) is cheaper than the S&P 500 Mutual Fund (VFIAX). See their expense ratios:
https://investor.vanguard.com/etf/profile/overview/VOO
https://investor.vanguard.com/mutual-fu ... view/VFIAX
Also (and potentially of interest to you OP) ETFs are easier to move between brokerage firms. So if you decide later that you want to move, having ETFs will make that simpler for you.
"Anyone who claims to understand quantum theory is either lying or crazy" -- Richard Feynman
sycamore
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by sycamore »

6d1v7x3 wrote: Wed Jul 21, 2021 4:27 pm
02nz wrote: Wed Jul 21, 2021 2:05 pm
6d1v7x3 wrote: Wed Jul 21, 2021 2:02 pm I'm very sorry if I'm being redundant but I still don't understand what I would have to do with the ETF option. Does this mean that I have to do some sort of manual thing on a regular basis? If so, what specifically would I have to do?
You'd have to place a trade manually for the ETF. Not hard, we're talking less than a minute of work, you just can't set up an automatic investment plan as you could with a mutual fund.
Thanks for your reply. How often would I have to do that?
This question is a good sign you need to read and come up with your own Investment policy statement. I suggest you (as an investor) should be able to explain to yourself and family:
- what your investing goals are (retirement, college, etc.)
- why you're investing in each asset class (stocks, bonds, etc.)
- how much and when you're investing in stocks and/or bonds ($X per paycheck).

Having clear answers means you have a good plan to help reach your goals.
Lionel Hutz
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by Lionel Hutz »

Mutual fund vs ETF:
ETF: in general the ETF is likely more tax efficient by a hair.
Mutual fund: far far simpler - you can can sell dollars where ETF is only whole shares, you can do automatic investing where ETF must be manual purchases, and so on.

So if you value simplicity more than a slight edge in performance (re: ETF tax efficiency), go with the mutual fund.

Vanguard vs Fidelity, it really doesn’t matter. Fidelity has the zero fee fund I believe but Vanguard’s is so ridiculously cheap (0.04%) that the difference is negligible. So choose which firm you’d rather work with.
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MahoningValley
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by MahoningValley »

If I had $100k in a taxable account that I can forget about for 20 years, I would buy shares of a MuniBond CEF then set it up so the tax-free dividends go to purchase more shares. (NEA,AFB,VKI). 👌
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by ruralavalon »

Invictus002 wrote: Fri Jul 23, 2021 12:50 am For investing in S&P500, the gold standard is ETF called SPY. It's the oldest and largest ETF in the world. It's also the most liquid ETF in the world.

You can hold SPY with any brokerage and even transfer it in between.
That is not the "gold standard", SPDR® S&P 500® ETF Trust (SPY) has an expense ratio of 0.095%. You can do better (0.03%) with a S&P 500 index ETF from Vanguard (VOO), or BlackRock iShares (IVV).
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started
nalor511
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Re: [Buying S&P 500 Index Fund - Fidelity or Vanguard?]

Post by nalor511 »

As a 17 year vg customer, I recommend you look at both Fidelity and Schwab, and go with whichever one speaks to you. You'll get a bonus match at Schwab (find the biggest bonus a competitor offers, and ask Schwab to match), and you will not at Fidelity.

There is nothing wrong with Vanguard, but their customer service is at best slow, hard to contact, and untrained. CS at the other brokers may be untrained (or may not be), but they are fast and easy to contact.
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