Fidelity comparable fund for Vanguard total bond index fund?
Fidelity comparable fund for Vanguard total bond index fund?
I want to stay at fidelity. Any suggestions for Fidelity comparable fund for Vanguard total bond index fund?
-
- Posts: 3665
- Joined: Thu Oct 18, 2007 11:42 am
Re: Fidelity comparable fund for Vanguard total bond index f
May I suggest, though, that rather than using that Fidelity mutual fund, you simply buy BND within your Fidelity account. That is the Vanguard TBM index ETF, ER 0.14.faltuk1 wrote:I want to stay at fidelity. Any suggestions for Fidelity comparable fund for Vanguard total bond index fund?
I think the Spartan Treasury funds are good offerings, but the TBM fund, not so much.
Re: Fidelity comparable fund for Vanguard total bond index f
BND seems to be good idea. I have never bought an ETF before. Are returns and risks on BND going to be exactly similar to Vangurad Total Bond? Also, I guess I should invest lump sum in BND instead of $500 - $1000/month?Tramper Al wrote:May I suggest, though, that rather than using that Fidelity mutual fund, you simply buy BND within your Fidelity account. That is the Vanguard TBM index ETF, ER 0.14.faltuk1 wrote:I want to stay at fidelity. Any suggestions for Fidelity comparable fund for Vanguard total bond index fund?
I think the Spartan Treasury funds are good offerings, but the TBM fund, not so much.
Is there an ETF for Vanguard Total International Index Fund?
This is what I don't like about FBIDX
These holdings which represent 69%. If I wanted govt. bonds, I would buy something else.
=====================
Top 5 Issuers as of 09/30/2009
FNMA GTD MTG PASS THRU CTF
UNITED STATES TREASURY
FREDDIE MAC
GNMA GUARANTEED PASS THRU CERT
FANNIE MAE
69.05% of the portfolio
==============================
Also this statement from the Strategy:
Engaging in transactions that have a leveraging effect on the fund.
===============================
=====================
Top 5 Issuers as of 09/30/2009
FNMA GTD MTG PASS THRU CTF
UNITED STATES TREASURY
FREDDIE MAC
GNMA GUARANTEED PASS THRU CERT
FANNIE MAE
69.05% of the portfolio
==============================
Also this statement from the Strategy:
Engaging in transactions that have a leveraging effect on the fund.
===============================
Re: Fidelity comparable fund for Vanguard total bond index f
Here is a list of all the Vanguard ETFs sorted by asset class:faltuk1 wrote:Is there an ETF for Vanguard Total International Index Fund?
https://personal.vanguard.com/us/funds/etf/bytype
Good luck with your research and Happy New Year!
-
- Posts: 3665
- Joined: Thu Oct 18, 2007 11:42 am
Re: Fidelity comparable fund for Vanguard total bond index f
You can see the various Vanguard ETFs on the Vanguard web site.faltuk1 wrote:BND seems to be good idea. I have never bought an ETF before. Are returns and risks on BND going to be exactly similar to Vangurad Total Bond? Also, I guess I should invest lump sum in BND instead of $500 - $1000/month?Tramper Al wrote:May I suggest, though, that rather than using that Fidelity mutual fund, you simply buy BND within your Fidelity account. That is the Vanguard TBM index ETF, ER 0.14.faltuk1 wrote:I want to stay at fidelity. Any suggestions for Fidelity comparable fund for Vanguard total bond index fund?
I think the Spartan Treasury funds are good offerings, but the TBM fund, not so much.
Is there an ETF for Vanguard Total International Index Fund?
https://personal.vanguard.com/us/funds/etf/byname
The ETFs are simply share classes of the open end funds, so yes I'd have to say that risk and return would be in line. It is in the expenses, including transaction costs, where they will differ.
The Fidelity Spartan Int'l Equity fund is quite good, so going the ETF route on this may not be quite the advantage that it is for TBM. Unless you are aiming for Int'l+EM, as EM you cannot get from a Spartan fund at this point.
In general, when paying a commission for ETFs you should try to keep the number of transactions to a minimum. You should calculate your breakeven points, based on the ER difference, commission, spread and what not.
If I were intent on making small investments throughout the year, though, probably what I would do is use the more expensive open end fund at first, then lump sum from there to the ETF each time the balance reached a point it made sense to do so. If my annual investment were $16.5K, for example, that might mean twice a year.
- nisiprius
- Advisory Board
- Posts: 52105
- Joined: Thu Jul 26, 2007 9:33 am
- Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry
FBIDX is close enough for practical purposes. Fidelity had an small but infuriating screwup in 2007 that is beautifully matched by a small but infuriating screwup that Vanguard had in 2002.
I completely fail to understand the fad for ETFs. For reasons that are utterly incomprehensible to me, the market does not always value ETFs at their net asset value. I'd have thought Mr. Market could do the math just as well as a fund company, but, no. I believe there were some postings here that during the recent craziness, there were moments when bond ETFs were far enough out of whack with their NAV to matter.
Disclosure 1: I hold VBMFX at Vanguard. Disclosure 2: I switched from FBIDX at Fidelity to VBMFX at Vanguard in early 2008 because I was all huffy and ticked off at Fidelity and wanted to Teach Them A Lesson. I'm sure I ruined Ned Johnson's 3rd's whole day. Not. Despite all this, if I didn't have a Vanguard account, I'd use FBIDX because to me the discomfort, inconvenience, and fees of an ETF--not being in the free-trades category--outweigh any differences between FBIDX and VBMFX.
Fidelity U. S. Bond Index Fund: FBIDX
Vanguard Total Bond Market Fund: VBMFX
I completely fail to understand the fad for ETFs. For reasons that are utterly incomprehensible to me, the market does not always value ETFs at their net asset value. I'd have thought Mr. Market could do the math just as well as a fund company, but, no. I believe there were some postings here that during the recent craziness, there were moments when bond ETFs were far enough out of whack with their NAV to matter.
Disclosure 1: I hold VBMFX at Vanguard. Disclosure 2: I switched from FBIDX at Fidelity to VBMFX at Vanguard in early 2008 because I was all huffy and ticked off at Fidelity and wanted to Teach Them A Lesson. I'm sure I ruined Ned Johnson's 3rd's whole day. Not. Despite all this, if I didn't have a Vanguard account, I'd use FBIDX because to me the discomfort, inconvenience, and fees of an ETF--not being in the free-trades category--outweigh any differences between FBIDX and VBMFX.
Fidelity U. S. Bond Index Fund: FBIDX
Vanguard Total Bond Market Fund: VBMFX
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
Just that it's actively managed. I think it's a fine substitute, the only issue is the expense ratio is a little higher than Vanguards.faltuk1 wrote:I just checked, it looks the expense ratio for FBIDX is reduced to .32. Why do you say it is not really an index fund?
In my accounts, the higher expense ratio evens out because my Spartan funds are lower than the comparable funds at Vanguard.
I was of the opinion that "index" in the name meant a passively managed index fund. Is this incorrect? If so, how would a person know?zeusrock1 wrote:Just that it's actively managed.faltuk1 wrote:Why do you say it is not really an index fund?
Link to Asking Portfolio Questions
Admiral Fund and ETF expense ratios at Vanguard
There's really no need to invest in the Vanguard ETFs and you can get automatic reinvestment of dividends if you happen to need to invest over $100,000 because the expense ratio of the admiral funds is the same as the ETF.
Vanguard Admiral Total Stock Market Index fund expense ratio: .09%
Vanguard Total Stock Market ETF expense ratio: .09%
Vanguard Total Bond Index fund expense ratio: .14%
Vanguard Total Bond ETF expense ratio: .14%
Vanguard Admiral Total Stock Market Index fund expense ratio: .09%
Vanguard Total Stock Market ETF expense ratio: .09%
Vanguard Total Bond Index fund expense ratio: .14%
Vanguard Total Bond ETF expense ratio: .14%
Art
Doesn't everyone who invests in a mutual fund read the prospectus before they invest?retiredjg wrote:I was of the opinion that "index" in the name meant a passively managed index fund. Is this incorrect? If so, how would a person know?zeusrock1 wrote:Just that it's actively managed.faltuk1 wrote:Why do you say it is not really an index fund?
Cute.livesoft wrote:Doesn't everyone who invests in a mutual fund read the prospectus before they invest?retiredjg wrote:I was of the opinion that "index" in the name meant a passively managed index fund. Is this incorrect? If so, how would a person know?zeusrock1 wrote:Just that it's actively managed.faltuk1 wrote:Why do you say it is not really an index fund?
Point well taken, but not really the answer to the questions I asked. Anybody else know anything?
Link to Asking Portfolio Questions
I can't buy ETFs through my Fido 401(k), so I'm using the Spartan short-term treasury index fund. ER 0.2%, I think.
I'm working under the assumption that the difference between treasuries and total bond market, when all is said and done, will be...not much, in my case ( I like the lower volatility b/c of my small value "tilt").
I'm working under the assumption that the difference between treasuries and total bond market, when all is said and done, will be...not much, in my case ( I like the lower volatility b/c of my small value "tilt").
"By singing in harmony from the same page of the same investing hymnal, the Diehards drown out market noise." |
|
--Jason Zweig, quoted in The Bogleheads' Guide to Investing
I know nothing, but it's categorized on Fidelity's website as an index fund. On the other hand:retiredjg wrote:Cute.livesoft wrote:Doesn't everyone who invests in a mutual fund read the prospectus before they invest?retiredjg wrote:I was of the opinion that "index" in the name meant a passively managed index fund. Is this incorrect? If so, how would a person know?zeusrock1 wrote:Just that it's actively managed.faltuk1 wrote:Why do you say it is not really an index fund?
Point well taken, but not really the answer to the questions I asked. Anybody else know anything?
Normally investing at least 80% of the fund's assets in bonds included in the Barclays Capital U.S. Aggregate Index. Engaging in transactions that have a leveraging effect on the fund.
And it has a turnover rate of 231%. What kind of index fund has a turnover so high?
From the prospectus (Yes I do read them.)Falstaff wrote:
I know nothing, but it's categorized on Fidelity's website as an index fund. On the other hand:
Normally investing at least 80% of the fund's assets in bonds included in the Barclays Capital U.S. Aggregate Index. Engaging in transactions that have a leveraging effect on the fund.
And it has a turnover rate of 231%. What kind of index fund has a turnover so high?
http://content.members.fidelity.com/epr ... Investment Details
Investment Objective
U.S. Bond Index Fund seeks to provide investment results that correspond to the total return of the bonds in the Barclays Capital U.S. Aggregate Bond Index.
[/quote]
It seeks to provide returns that "correspond" to the index. That makes it an index. It uses sampling techniques which most index funds do when the index has a lot of different securities. That does not negate the "index fund" character. Like many bond funds it uses derivatives to characterize the risk and return of some issues. This is a cost and liquidity issue generally. Because these derivatives are very short term it drives up the turnover.
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.
- nisiprius
- Advisory Board
- Posts: 52105
- Joined: Thu Jul 26, 2007 9:33 am
- Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry
Bond funds in general have high turnover rates.Falstaff wrote:And it has a turnover rate of 231%. What kind of index fund has a turnover so high?
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
Like I said, I don't know a lot about any of this stuff. But the VG prospectus for the TBM fund reads:nisiprius wrote:Bond funds in general have high turnover rates.Falstaff wrote:And it has a turnover rate of 231%. What kind of index fund has a turnover so high?
"The average turnover rate for bond funds was approximately
125%; for indexed bond funds, the average turnover rate was approximately 96%, both as reported by Morningstar, Inc., on December 31, 2008."
And the turnover rate for the VG TBM has been around 60% for the past five years.