Target Date Funds - Vanguard vs Fidelity

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Topic Author
Supernoob
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Joined: Sun Oct 17, 2021 7:46 pm

Target Date Funds - Vanguard vs Fidelity

Post by Supernoob »

I couldn’t find this question. Sorry if has been asked before

For a Rollover IRA

I been looking at the returns for Vanguard and Fidelity Target Date index fund 2060. It looks like Vanguard’s return is about 1% more since inception

When looking at a target date fund (ex 2025) lifetime returns is almost 1% more with fidelity

Fidelity appears to hold less bonds but more cash by target date

Is it worth it to switch to Vanguard since the returns early on appear to be better with vanguard, so better return on compounding interests?

The reason I have fidelity is because of my previous job used fidelity and was just easy to roll the money there
Last edited by Supernoob on Tue Oct 19, 2021 6:53 am, edited 9 times in total.
mhalley
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Re: Target Date Funds - Vanguard vs Fidelity

Post by mhalley »

You can’t look at since inception since fidelity index came out in 2014. Since then fidelity has a car of 10.3%, and vanguard 10.12%.
https://www.portfoliovisualizer.com/bac ... sisResults
000
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Re: Target Date Funds - Vanguard vs Fidelity

Post by 000 »

No idea which will be better in the future but the differences will likely be minor and I would stay the course.
stan1
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Re: Target Date Funds - Vanguard vs Fidelity

Post by stan1 »

The asset allocations are slightly different between Fidelity and Vanguard for the same year.

Look under the hood at the asset allocations and pick the asset allocation you want. The asset location you want may be a different year than you plan to retire. The year is just a guideline.
brad.clarkston
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Re: Target Date Funds - Vanguard vs Fidelity

Post by brad.clarkston »

There close enough it doesn't matter. It doesn't make sense to change companies based on name and .0x%
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drk
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Re: Target Date Funds - Vanguard vs Fidelity

Post by drk »

Looking at past returns tends to confuse people into thinking that the future will look a certain way. Instead, look at the makeup of each of these funds, and you'll see that they're nearly identical aside from the fact that Vanguard allocates 2.4% to ex-US bonds while Fidelity omits them. Assuming that foreign bonds don't dramatically over/under-perform US bonds in the next couple decades, it's reasonable to expect these two funds to deliver basically identical returns.

Also, welcome to the forum! Make sure you read the Getting Started guide, and consider making a portfolio review post as detailed in the "Asking questions" section.
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Bama12
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Re: Target Date Funds - Vanguard vs Fidelity

Post by Bama12 »

I don't have any target date funds but I do like Schwab's they have Small and Reti in them.
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ruralavalon
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Re: Target Date Funds - Vanguard vs Fidelity

Post by ruralavalon »

Welcome to the forum :) .

Supernoob wrote: Sun Oct 17, 2021 7:54 pm I couldn’t find this question. Sorry if has been asked before

For a Rollover IRA

I been looking at the returns for Vanguard and Fidelity Target Date index fund 2060. It looks like Vanguard’s return is about 1% more since inception

When looking at a target date fund (ex 2025) lifetime returns is almost 1% more with fidelity

Fidelity appears to hold less bonds but more cash by target date

Is it worth it to switch to Vanguard since the returns early on appear to be better with vanguard, so better return on compounding interests?

The reason I have fidelity is because of my previous job used fidelity and was just easy to roll the money there
You need to compare over the same time period.The funds have different inception dates.

It looks like the returns on the 2060 funds have been almost identical. Portfolio Visualizer, 2015-2021 .

What fund firm or brokerage is the rollover IRA with?

If the rollover IRA is at Fidelity then there will be a purchase fee buy the Vanguard fund.

If the rollover IRA is at Fidelity then I suggest you use a Fidelity fund, the lower cost Fidelity Freedom® Index 2060 Fund - Investor Class (FDKLX) ER 0.12%. They have a higher cost Fidelity Freedom® 2060 Fund (FDKVX) ER 0.75%.

If the rollover IRA is at Vanguard then I suggest using the Vanguard fund, Vanguard Target Retirement 2060 Fund (VTTSX) ER 0.13%.

Both of those funds are good choices. Both Fidelity and Vanguard are a good choice for a fund firm to use.
Last edited by ruralavalon on Mon Oct 18, 2021 7:32 am, edited 1 time in total.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
Topic Author
Supernoob
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Joined: Sun Oct 17, 2021 7:46 pm

Re: Target Date Funds - Vanguard vs Fidelity

Post by Supernoob »

Thank you everyone for the comments

I honestly have the target date fund on that one for simplicity

I’m already trying to keep a 75/25 ratio (not very good may I add) for all my accounts but I do have too many

I have Roth and new brokerage with Vanguard (I was using fidelity with ETFs but I prefer automation than go every other week and buy one, then feeling like I should see if I can get the best price). All stocks (right now mostly US stocks (VTSAX)) I’m waiting on saving the $3000 to buy VTIAX on the brokerage)

I have in fidelity the target date in one Rollover and in another rollover FDPGX (hard to sell because I doubled my money in it, by luck of course)

And then I have Schwab which is what my new employer uses and I have a Target date 2060 and then the equivalent to VTSAX and VTIAX on the other (two accounts). Both are pre-tax and add money monthly

Only reason I use target date is to simplify since I have to be balancing multiple accounts at the same time
-ROTH, brokerage and Schwab

The other option is go VTWAX (“and chill”) instead of target date funds and adjust allocation by buying more VTSAX but probably end up being more work too
Topic Author
Supernoob
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Joined: Sun Oct 17, 2021 7:46 pm

Re: Target Date Funds - Vanguard vs Fidelity

Post by Supernoob »

ruralavalon wrote: Mon Oct 18, 2021 7:27 am Welcome to the forum :) .

Supernoob wrote: Sun Oct 17, 2021 7:54 pm I couldn’t find this question. Sorry if has been asked before

For a Rollover IRA

I been looking at the returns for Vanguard and Fidelity Target Date index fund 2060. It looks like Vanguard’s return is about 1% more since inception

When looking at a target date fund (ex 2025) lifetime returns is almost 1% more with fidelity

Fidelity appears to hold less bonds but more cash by target date

Is it worth it to switch to Vanguard since the returns early on appear to be better with vanguard, so better return on compounding interests?

The reason I have fidelity is because of my previous job used fidelity and was just easy to roll the money there
You need to compare over the same time period.The funds have different inception dates.

It looks like the returns on the 2060 funds have been almost identical. Portfolio Visualizer, 2015-2021 .

What fund firm or brokerage is the rollover IRA with?

If the rollover IRA is at Fidelity then there will be a purchase fee buy the Vanguard fund.

If the rollover IRA is at Fidelity then I suggest you use a Fidelity fund, the lower cost Fidelity Freedom® Index 2060 Fund - Investor Class (FDKLX) ER 0.12%. They have a higher cost Fidelity Freedom® 2060 Fund (FDKVX) ER 0.75%.

If the rollover IRA is at Vanguard then I suggest using the Vanguard fund, Vanguard Target Retirement 2060 Fund (VTTSX) ER 0.13%.

Both of those funds are good choices. Both Fidelity and Vanguard are a good choice for a fund firm to use.
Yes it is with fidelity and I use the Target “index” one. The plan was to move rollover to vanguard if I wanted to buy their target date fund
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ruralavalon
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Location: Illinois

Re: Target Date Funds - Vanguard vs Fidelity

Post by ruralavalon »

Supernoob wrote: Mon Oct 18, 2021 7:32 am Thank you everyone for the comments

I honestly have the target date fund on that one for simplicity

I’m already trying to keep a 75/25 ratio (not very good may I add) for all my accounts but I do have too many

I have Roth and new brokerage with Vanguard (I was using fidelity with ETFs but I prefer automation than go every other week and buy one, then feeling like I should see if I can get the best price). All stocks (right now mostly US stocks (VTSAX)) I’m waiting on saving the $3000 to buy VTIAX on the brokerage)

I have in fidelity the target date in one Rollover and in another rollover FDPGX (hard to sell because I doubled my money in it, by luck of course)

And then I have Schwab which is what my new employer uses and I have a Target date 2060 and then the equivalent to VTSAX and VTIAX on the other (two accounts). Both are pre-tax and add money monthly

Only reason I use target date is to simplify since I have to be balancing multiple accounts at the same time
-ROTH, brokerage and Schwab

The other option is go VTWAX (“and chill”) instead of target date funds and adjust allocation by buying more VTSAX but probably end up being more work too
This is a little confusing.
Roth IRA at Vanguard?
Taxable brokerage account at Vanguard?
rollover IRA at Fidelity (or two rollover IRAs at Fidelity)?
employer plan with Schwab (401k, 403b, 457b, something else?)

Please restate in this format: Asking Portfolio Questions.

Please simply add that to your original post using the edit button (the pencil icon near the upper right corner of your post), it helps a lot if all of your information is in one place.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
Topic Author
Supernoob
Posts: 11
Joined: Sun Oct 17, 2021 7:46 pm

Re: Target Date Funds - Vanguard vs Fidelity

Post by Supernoob »

ruralavalon wrote: Mon Oct 18, 2021 7:41 am
Supernoob wrote: Mon Oct 18, 2021 7:32 am Thank you everyone for the comments

I honestly have the target date fund on that one for simplicity

I’m already trying to keep a 75/25 ratio (not very good may I add) for all my accounts but I do have too many

I have Roth and new brokerage with Vanguard (I was using fidelity with ETFs but I prefer automation than go every other week and buy one, then feeling like I should see if I can get the best price). All stocks (right now mostly US stocks (VTSAX)) I’m waiting on saving the $3000 to buy VTIAX on the brokerage)

I have in fidelity the target date in one Rollover and in another rollover FDPGX (hard to sell because I doubled my money in it, by luck of course)

And then I have Schwab which is what my new employer uses and I have a Target date 2060 and then the equivalent to VTSAX and VTIAX on the other (two accounts). Both are pre-tax and add money monthly

Only reason I use target date is to simplify since I have to be balancing multiple accounts at the same time
-ROTH, brokerage and Schwab

The other option is go VTWAX (“and chill”) instead of target date funds and adjust allocation by buying more VTSAX but probably end up being more work too
This is a little confusing.
Roth IRA at Vanguard?
Taxable brokerage account at Vanguard?
rollover IRA at Fidelity (or two rollover IRAs at Fidelity)?
employer plan with Schwab (401k, 403b, 457b, something else?)

Please restate in this format: Asking Portfolio Questions.

Please simply add that to your original post using the edit button (the pencil icon near the upper right corner of your post), it helps a lot if all of your information is in one place.
Thank you. I will when I get home. There is quite a mess that I made trying to find “the easy way”
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