Comparing Vanguard Index Funds with Fidelity Index Funds

[mikedm]

I have the vast majority of my and my wife's IRAs with Vanguard, but I also have a smaller IRA and brokerage account with Fidelity. I've decided, for reasons similar to other posts here, to consolidate these IRAs with Fidelity. The representative at Fidelity says I can transfer the IRAs to fidelity and keep the same Vangard funds within the IRA, however any future transactions into those funds will include transaction fees. Thus, I will want to replace these Vanguard funds with something as equivalent as possible with Fidelity Funds.

My Vanguard Traditional IRA is 7 figures and is invested in 3 funds, and I have identified what appear to be the closest equivalent Fidelity funds as follows:

40% VTSAX (Total Stock Market Index Fund) convert to FZROX (Zero Total Stock Market Index Fund)
20% VTIAX (Total International Stock Index Fund) convert to FZILX (Zero International Index Fund)
40% VBTLX (Total Bond Market Index Fund) convert to FXNAX (US Bond Index Fund)

My Roth IRA and my wife's traditional IRA are relatively small, and for simplicity reasons I have them both in VSMGX (Vanguard Lifestrategy Moderate Growth Fund). However, I cannot find an equivalent Fidelity fund to replace this fund with. I see that Fidelity has some asset allocation funds such as FSANX (Fidelity Asset Manager 60%) that has a similar allocation to the Vanguard fund, but this is a managed fund. I prefer to stay with index funds wherever possible.

First of all, are the index funds that I've matched up properly matched? And second, for my Roth and wife's smaller IRA's is there an equivalent option for the Vanguard Lifestrategy fund that I'm missing, or will I just need to break these out into a three-fund portfolio like I'm doing with my traditional IRA?

[Wiggums]

The ER for FSANX is .68%

Fidelity Freedom INDEX fund is worth consideration

[Duckie]

The representative at Fidelity says I can transfer the IRAs to fidelity and keep the same Vangard funds within the IRA, however any future transactions into those funds will include transaction fees. Thus, I will want to replace these Vanguard funds with something as equivalent as possible with Fidelity Funds.

If you are willing to use ETFs you could convert your three Vanguard funds (VTSAX, VTIAX, and VBTLX) into their equivalent ETFs (VTI, VXUS, and BND) while at Vanguard and then transfer them "in kind" to Fidelity. Purchasing new ETF shares would not incur transaction fees.

My Vanguard Traditional IRA is 7 figures and is invested in 3 funds, and I have identified what appear to be the closest equivalent Fidelity funds as follows:

40% VTSAX (Total Stock Market Index Fund) convert to FZROX (Zero Total Stock Market Index Fund)
20% VTIAX (Total International Stock Index Fund) convert to FZILX (Zero International Index Fund)
40% VBTLX (Total Bond Market Index Fund) convert to FXNAX (US Bond Index Fund)

These will do because this is an IRA. FZROX and FZILX would not be suitable in a taxable account.

My Roth IRA and my wife's traditional IRA are relatively small, and for simplicity reasons I have them both in VSMGX (Vanguard Lifestrategy Moderate Growth Fund). However, I cannot find an equivalent Fidelity fund to replace this fund with.

VSMGX is 36% US, 24% international, and 40% bonds. Fidelity does not have static funds but does have shifting target-date funds. Currently FXIFX Fidelity Freedom Index 2030 Fund Investor Class (0.12%) has 36% US, 24% international, and 40% bonds. It will gradually increase its bond allocation but you can always switch to the 2025 fund when it does.

[nisiprius]

See Three-fund portfolio: Other than Vanguard, Bogleheads style.

With Fidelity, for example, you could construct a three-fund portfolio using:

• Fidelity ZERO Total Market Index Fund (FZROX)⁵ or Fidelity Total Market Index Fund (FSKAX)
• Fidelity ZERO International Index Fund (FZILX)^{5 6} or Fidelity Total International Index Fund (FTIHX)
• Fidelity U.S. Bond Index Fund (FXNAX)

⁵Fidelity ZERO funds are not recommended for use in taxable accounts due to their lack of portability. When transferring to a different brokerage, the fund will have to be liquidated, thereby creating a taxable event
⁶The Fidelity ZERO International Index Fund (FZILX) does not include international small-cap stocks.

I haven't been in this position, but if I were, my personal preference would be to use the "regular" Fidelity index funds FSKAX and FTIHX, rather than the ZERO funds. The reason is that although I believe the ZERO funds are brilliant marketing, they are more or less of a gimmick, and I don't like the facts they can only be held at Fidelity, use unusual indexes, and sample rather than replicate the index. I wouldn't use ETFs because I dislike ETFs and prefer mutual funds. I reality this is hairsplitting and it doesn't matter, it's like trying to decide between Coke Zero and Diet Coke.

[the_wiki]

I have the vast majority of my and my wife's IRAs with Vanguard, but I also have a smaller IRA and brokerage account with Fidelity. I've decided, for reasons similar to other posts here, to consolidate these IRAs with Fidelity. The representative at Fidelity says I can transfer the IRAs to fidelity and keep the same Vangard funds within the IRA, however any future transactions into those funds will include transaction fees. Thus, I will want to replace these Vanguard funds with something as equivalent as possible with Fidelity Funds.

My Vanguard Traditional IRA is 7 figures and is invested in 3 funds, and I have identified what appear to be the closest equivalent Fidelity funds as follows:

40% VTSAX (Total Stock Market Index Fund) convert to FZROX (Zero Total Stock Market Index Fund)
20% VTIAX (Total International Stock Index Fund) convert to FZILX (Zero International Index Fund)
40% VBTLX (Total Bond Market Index Fund) convert to FXNAX (US Bond Index Fund)

My Roth IRA and my wife's traditional IRA are relatively small, and for simplicity reasons I have them both in VSMGX (Vanguard Lifestrategy Moderate Growth Fund). However, I cannot find an equivalent Fidelity fund to replace this fund with.

I would just put your smaller IRAs in 100% US stock market and increase your Bond and international holdings in your large IRA account to compensate. That way your overall portfolio can still be at the allocation you like, but the two smaller accounts are simple to manage. I recently did something similar to make my smaller investment accounts easier to manage.

I also would not worry about using the ZERO funds because these are IRA and you can just swap to a different fund if portability is a problem. But also the regular index funds are like 0.02% so there's not much benefit in going with the ZERO either.

[my2p]

Why not leave them alone at Vanguard? I personally prefer Vanguard because every time I call Fidelity for something, they try to sell me something. Fidelity's owners, the Johnson family, is now worth $48 billion. Who knows what wrinkle they can throw when their net worth goes down? The only reason I use Fidelity is because my employer 401(K) is with them.

[retiredjg]

I'm with Nisiprius. I would use the ordinary Fidelity index funds (listed in Nisi's post) instead of the zero funds myself. Just a philosophical preference on my part. Many people here are happy with the zero funds, but they just would not feel right to me.

Whatever you decide, the whole point is to find broad low cost index funds that you will be happy with.

I don't think Fido has any mutual fund substitutes for LifeStrategy, but I do think they sell Blackrock ETFs that would substitute well. Check out AOR.

[zie]

Your mappings are reasonable, but you can see some other options available in the wiki here: https://www.bogleheads.org/wiki/Fidelity

I don't think Fido has any mutual fund substitutes for LifeStrategy, but I do think they sell Blackrock ETFs that would substitute well. Check out AOR.

The closest Fidelity has is FFNOX @ 85/15 and FIKFX at 20/80. They do allow you to own the AOK -> AOA fixed allocation series, like AOR. I hold AOA(80/20) @ Fidelity without issue.

[retiredjg]

I suppose it would be possible to combine FFNOX (85/15) and FFKFX( 20/80) to achieve 60:40 pretty easily and it would be pretty stable (not migrating).

The other possibility is to hold the Fidelidy Freedom Index target fund that is at 60:40 and exchange it into the next younger fund every 5 years or so as it migrates toward more bonds.

[Bimmer]

I love Diet Coke, hate Coke Zero.

[welderwannabe]

I haven't been in this position, but if I were, my personal preference would be to use the "regular" Fidelity index funds FSKAX and FTIHX, rather than the ZERO funds. The reason is that although I believe the ZERO funds are brilliant marketing, they are more or less of a gimmick, and I don't like the facts they can only be held at Fidelity, use unusual indexes, and sample rather than replicate the index. I wouldn't use ETFs because I dislike ETFs and prefer mutual funds. I reality this is hairsplitting and it doesn't matter, it's like trying to decide between Coke Zero and Diet Coke.

100%. FSKAX has such a low ER already (.015%) that there is no reason to go with the zero fund. I stay away from them as well.

On $10M invested (which, btw I do not have), you're talking about $1,500 a year in fee difference between FSKAX and the ZERO fund. Its literally a rounding error.

[Chv396]

I believe the Fidelity Zero Funds are their “loss leaders”, designed to bring clients into the Fidelity ecosystem. Once you are in, they will upsell you on additional profit generating services and products. Just an opinion of mine.

[Clarky]

Why not leave them alone at Vanguard? I personally prefer Vanguard because every time I call Fidelity for something, they try to sell me something. Fidelity's owners, the Johnson family, is now worth $48 billion. Who knows what wrinkle they can throw when their net worth goes down? The only reason I use Fidelity is because my employer 401(K) is with them.

Couldn’t agree more. My 401k is with Fidelity as well, always recurring issues. The tide will turn.

[dcdowden]

We use the three Zero funds you mentioned at Fidelity in our IRA's. No complaints. Performance comparable to Vanguard ETF's mentioned as well.