Fidelity Files for Four Fidelity ZERO℠ Funds (0.00% ER)

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Mursili
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Re: Fidelity Files for Four Fidelity ZERO℠ Funds (0.00% ER)

Post by Mursili » Thu Oct 11, 2018 10:39 am

SlowMovingInvestor wrote:
Thu Oct 11, 2018 10:17 am
I'm doing a little TLH, and plan to buy a Fido total market index fund.

I'm wondering whether to go with FSTVX (Fidelity® Total Market Index Fund) -- ER 0.015% or FZROX (Fidelity Zero Total Market).

FZROX has $1B in assets, which is pretty good for this short period. The ER difference is miniscule. I would guess it has fewer embedded capital gains, so more tax efficient. Slightly different indexes (it uses a Fido proprietary index, likely to avoid paying fees to Dow Jones).

I'm inclined to go with FZROX. Thoughts ?
No one knows. There is data presented in this thread indicating that the difference is negligible up to this point. Otherwise, the zero-fee fund is too new to compare. Of course, even with a comparison, past results do not predict the future.
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Re: Fidelity Files for Four Fidelity ZERO℠ Funds (0.00% ER)

Post by harikaried » Fri Oct 12, 2018 9:43 am

Tried switching to these ZERO funds in our self-employed 401k, and got:
The mutual fund you’re trying to buy is closed to new investments. Please use the Mutual Fund Evaluator to find an open fund or call 1-800-544-6666 for assistance.
I called them, and the person thought it should be available for SE401k accounts, but turns out within the last week, Fidelity is limiting these new funds to regular brokerage and IRA accounts.

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Re: Fidelity Files for Four Fidelity ZERO℠ Funds (0.00% ER)

Post by GoldStar » Fri Oct 12, 2018 9:51 am

Mursili wrote:
Thu Oct 11, 2018 10:39 am
SlowMovingInvestor wrote:
Thu Oct 11, 2018 10:17 am
I'm doing a little TLH, and plan to buy a Fido total market index fund.

I'm wondering whether to go with FSTVX (Fidelity® Total Market Index Fund) -- ER 0.015% or FZROX (Fidelity Zero Total Market).

FZROX has $1B in assets, which is pretty good for this short period. The ER difference is miniscule. I would guess it has fewer embedded capital gains, so more tax efficient. Slightly different indexes (it uses a Fido proprietary index, likely to avoid paying fees to Dow Jones).

I'm inclined to go with FZROX. Thoughts ?
No one knows. There is data presented in this thread indicating that the difference is negligible up to this point. Otherwise, the zero-fee fund is too new to compare. Of course, even with a comparison, past results do not predict the future.
I'd go with the Zero fund at this point for new money. The one thing that you DO know is that the zero fund has a lower ER.

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Re: Fidelity Files for Four Fidelity ZERO℠ Funds (0.00% ER)

Post by GeraniumLover » Fri Oct 12, 2018 7:11 pm

GoldStar wrote:
Fri Oct 12, 2018 9:51 am

I'd go with the Zero fund at this point for new money. The one thing that you DO know is that the zero fund has a lower ER.
Plus you know it doesn't have substantial unrealized gains that may have to be distributed and be subject to capital gains taxes

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Re: Fidelity Files for Four Fidelity ZERO℠ Funds (0.00% ER)

Post by Mike14 » Wed Nov 21, 2018 2:12 am

Is it possible to exchange Vanguard funds into Fidelity funds on the same day without being out of the markets? I'm assuming that this would need to happen on the Fidelity platform.

Will other Brokerage firms be able to hold Fidelity Zero funds (even if no additional purchases are possible)? That is, what are the criteria for Brokerage firms to be able / not be able to carry certain mutual funds?

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Re: Fidelity Files for Four Fidelity ZERO℠ Funds (0.00% ER)

Post by jhfenton » Wed Nov 21, 2018 7:54 am

Allixi wrote:
Sun Sep 30, 2018 10:15 pm
But is that reflected in the share price of the ETF/MF, or the amount of dividends received?

Is there a difference only when I sell some shares and actually have capital gains?

I don’t have a taxable account yet so a lot of this is theoretical and abstract for me.
The tax-superiority of ETFs shows up in their lack of capital gains distributions. Index mutual funds are usually more efficient than active mutual funds, but they almost all distribute capital gains over time. Unless you're perpetually in a 0% capital gains bracket, these capital gains distributions will cost you money in taxes.
SlowMovingInvestor wrote:
Thu Oct 11, 2018 10:17 am
I'm doing a little TLH, and plan to buy a Fido total market index fund.

I'm wondering whether to go with FSTVX (Fidelity® Total Market Index Fund) -- ER 0.015% or FZROX (Fidelity Zero Total Market).

FZROX has $1B in assets, which is pretty good for this short period. The ER difference is miniscule. I would guess it has fewer embedded capital gains, so more tax efficient. Slightly different indexes (it uses a Fido proprietary index, likely to avoid paying fees to Dow Jones).

I'm inclined to go with FZROX. Thoughts ?
My thoughts are that I would stick to ETFs in a taxable account. I would buy ITOT (or SCHB, SPTM, or VTI if I were at Schwab, TD Ameritrade, or Vanguard). They are all 3 bp (VTI is at 4 bp), and they will all be more tax efficient than any (non-Vanguard) equity mutual fund. And they are entirely portable, whereas the Fidelity mutual funds will have you stuck at Fidelity if you have significant capital gains.

In a tax-advantaged account, I'd go with ZERO Total Market.

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Re: Fidelity Files for Four Fidelity ZERO℠ Funds (0.00% ER)

Post by tj » Wed Nov 21, 2018 10:19 am

Mike14 wrote:
Wed Nov 21, 2018 2:12 am
Is it possible to exchange Vanguard funds into Fidelity funds on the same day without being out of the markets? I'm assuming that this would need to happen on the Fidelity platform.

Will other Brokerage firms be able to hold Fidelity Zero funds (even if no additional purchases are possible)? That is, what are the criteria for Brokerage firms to be able / not be able to carry certain mutual funds?

None. You have to buy Fidelity ZERO funds at Fidelity. You cannot transfer them anywhere else, including Fidelity DAF's.

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Re: Fidelity Files for Four Fidelity ZERO℠ Funds (0.00% ER)

Post by Mike14 » Fri Nov 23, 2018 4:37 am

tj wrote:
Wed Nov 21, 2018 10:19 am
None. You have to buy Fidelity ZERO funds at Fidelity. You cannot transfer them anywhere else, including Fidelity DAF's.
What are DAF's?
Do "regular" (non-ZERO) Fidelity mutual funds transfer to other brokerages?

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Re: Fidelity Files for Four Fidelity ZERO℠ Funds (0.00% ER)

Post by jhfenton » Fri Nov 23, 2018 7:44 am

Mike14 wrote:
Fri Nov 23, 2018 4:37 am
What are DAF's?
Donor-Advised Funds

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Re: Fidelity Files for Four Fidelity ZERO℠ Funds (0.00% ER)

Post by LadyGeek » Fri Nov 23, 2018 9:39 am

The wiki has some background info: Donor advised fund
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Re: Fidelity Files for two Fidelity ZERO℠ Funds (0.00% ER total stock and total international mutual funds)

Post by mptfan » Fri Nov 23, 2018 3:23 pm

AlphaLess wrote:
Wed Aug 01, 2018 8:54 pm
But Fidelity first needs to learn how to track the index well...
What index are you referring to? Fidelity made up their own index, so I assume they will be able to track it well.

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Re: Fidelity Files for Four Fidelity ZERO℠ Funds (0.00% ER)

Post by OnLevel » Fri Nov 23, 2018 5:54 pm

Would selling SWTSX and buying FZROX count as a wash sale? I am looking into TLH for the first time, and want to make sure I don't screw things up.

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Re: Fidelity Files for Four Fidelity ZERO℠ Funds (0.00% ER)

Post by Jack FFR1846 » Fri Nov 23, 2018 6:20 pm

End today, FZROX is now $413 higher than the new ticker FSKAX on $300k each
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Fidelity ZERO funds?

Post by bck63 » Sun Jan 06, 2019 4:24 pm

[Thread merged into here, see below. --admin LadyGeek]

So, I'm a small investor. I have about $215,000 of assets. I wanted to increase my international stock exposure, but didn't want to sell any other part of my portfolio to come up with the $3,000 for a new Vanguard fund. So I started a Fidelity account and invested in FILX Fidelity ZERO International Index Fund. No fees. No minimum investing.

1) I'm very loyal to Vanguard, so it kind of feels wierd.

2) Does anyone have any thoughts on these Fidelity ZERO funds?

Thanks for any input.

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whodidntante
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Re: Fidelity ZERO funds?

Post by whodidntante » Sun Jan 06, 2019 4:25 pm

There was a big ol' thread on the zero funds. I think they're fine.

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Re: Fidelity ZERO funds?

Post by 02nz » Sun Jan 06, 2019 4:34 pm

The Zero funds track proprietary indices, but they're very close to the equivalent Vanguard funds. I did a comparison of some of the Zero funds with Vanguard equivalents on Morningstar. With a few the Vanguard fund came out slightly ahead in the period since the Zero funds' inception, in a few the Fidelity fund was ahead. In all cases it was a tiny, negligible difference. I have no special loyalty to Vanguard but IMHO the Zero funds are a marketing gimmick. Nothing really wrong with the funds themselves, but unless you're already invested with Fidelity, they're not even worth the bother of an extra logon.

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cap'n crunch
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Re: Fidelity ZERO funds?

Post by cap'n crunch » Sun Jan 06, 2019 4:35 pm

i was just reading an article about that 20 mins ago....https://www.financial-planning.com/opin ... efficiency

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Re: Fidelity ZERO funds?

Post by Triple digit golfer » Sun Jan 06, 2019 4:36 pm

The indexes they track may not be the same as other index funds. They may also not be as tax efficient. They may also not track their benchmark as well.

Point being, I don't think it's worth switching companies for a few basis points when in reality, a few basis points is just noise.

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Re: Fidelity ZERO funds?

Post by radiowave » Sun Jan 06, 2019 4:40 pm

and there is very little history for this fund.
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Re: Fidelity ZERO funds?

Post by NoHeat » Sun Jan 06, 2019 4:56 pm

bck63 wrote:
Sun Jan 06, 2019 4:24 pm

1) I'm very loyal to Vanguard, so it kind of feels wierd.
You’ll get over it.

I’ve switched discount brokers many times since the early 1980s. And I’ve moved my home many times. Same kind of feeling, it doesn’t last.

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Re: Fidelity ZERO funds?

Post by Kbg » Sun Jan 06, 2019 5:24 pm

There is enough known about them now to review portfolio contents at morningstar. Based on wanting to get started now vs saving up 3K, I think you will be just fine with negligible difference from a total market fund. If the fund ends up having issues, then when you get 3K move it to a Vanguard funds.

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Re: Fidelity ZERO funds?

Post by vineviz » Sun Jan 06, 2019 5:28 pm

bck63 wrote:
Sun Jan 06, 2019 4:24 pm
So, I'm a small investor. I have about $215,000 of assets. I wanted to increase my international stock exposure, but didn't want to sell any other part of my portfolio to come up with the $3,000 for a new Vanguard fund. So I started a Fidelity account and invested in FILX Fidelity ZERO International Index Fund. No fees. No minimum investing.

1) I'm very loyal to Vanguard, so it kind of feels wierd.

2) Does anyone have any thoughts on these Fidelity ZERO funds?

Thanks for any input.
The Fidelity ZERO funds are great choices.

The only significant drawback, IMHO, is that the can NOT be transferred in-kind to any other brokerages. In an IRA this is no big deal, but in a taxable account you will have to sell the Fidelity fund (and pay taxes on any gains) if you ever want to move your account back to another broker.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

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Re: Fidelity ZERO funds?

Post by Northern Flicker » Sun Jan 06, 2019 5:34 pm

bck63 wrote:
Sun Jan 06, 2019 4:24 pm
So, I'm a small investor. I have about $215,000 of assets. I wanted to increase my international stock exposure, but didn't want to sell any other part of my portfolio to come up with the $3,000 for a new Vanguard fund. So I started a Fidelity account and invested in FILX Fidelity ZERO International Index Fund. No fees. No minimum investing.

1) I'm very loyal to Vanguard, so it kind of feels wierd.

2) Does anyone have any thoughts on these Fidelity ZERO funds?

Thanks for any input.
For a taxable account, the most tax-efficient option for a total int’l index fund is IXUS. For a developed markets index fund only, IEFA, VEA, and IDEV are tax-efficient options.

Fidelity index funds are good choices in tax-qualified accounts, but less tax-efficient in a taxable account.

There is no reason to be loyal to a mutual fund provider. You should seek to maintain the best portfolio you can.
Taking a break from Bogleheads.

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Re: Fidelity ZERO funds?

Post by dogagility » Sun Jan 06, 2019 8:56 pm

bck63 wrote:
Sun Jan 06, 2019 4:24 pm
1) I'm very loyal to Vanguard, so it kind of feels wierd.

2) Does anyone have any thoughts on these Fidelity ZERO funds?

Thanks for any input.
The ZERO funds are perfectly fine investment vehicles.

Pretty soon though, you'll be signing up for the Fidelity CMA and 2% cash back Visa... as your Vanguard loyalty fades into the distance. :twisted:
Taking "risk" since 1995.

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Re: Fidelity ZERO funds?

Post by arcticpineapplecorp. » Sun Jan 06, 2019 9:00 pm

bck63 wrote:
Sun Jan 06, 2019 4:24 pm
1) I'm very loyal to Vanguard, so it kind of feels wierd.
It's funny no one has yet found it interesting that the OP says s/he's "loyal" to Vanguard without being aware that the word "fidelity" actually means "loyalty", "faithfulness", etc.:

https://www.google.com/search?client=fi ... elity+mean
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Re: Fidelity ZERO funds?

Post by JonnyDVM » Sun Jan 06, 2019 9:01 pm

My thoughts are that they’re awesome. Come over to our side. The grass is greener.
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Re: Fidelity ZERO funds?

Post by InvestedEngineer » Sun Jan 06, 2019 9:05 pm

dogagility wrote:
Sun Jan 06, 2019 8:56 pm
bck63 wrote:
Sun Jan 06, 2019 4:24 pm
1) I'm very loyal to Vanguard, so it kind of feels wierd.

2) Does anyone have any thoughts on these Fidelity ZERO funds?

Thanks for any input.
The ZERO funds are perfectly fine investment vehicles.

Pretty soon though, you'll be signing up for the Fidelity CMA and 2% cash back Visa... as your Vanguard loyalty fades into the distance. :twisted:
Loyalty is overrated.

At the same time, the grass is not always greener.

But - when you have a reason like this to open a different account or invest in a new fund, it makes sense. Vanguard is really not that special anymore.

That feels weird to say on this forum...

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Re: Fidelity ZERO funds?

Post by jmanter » Sun Jan 06, 2019 9:15 pm

After the first two days or so, the Fidelity Zero funds have performed nearly exactly the same as any other US or international Index fund. As an experiment, I split my US and International funds when they opened. My first purchase was on August 7th (they opened on the 1st, I believe). The Zero funds have both outpaced the traditional funds (FSKAX and FTIHX) by less than half a percent (including new investments).

In a tax advantaged account, they seem to be very reasonable investments that have performed as well as the traditional funds in a rather volatile 4+ month period.

ETA: I think they have similarly outperformed the Vanguard funds...particularly the international fund. That's perhaps a more important fact, given the added cost for investing in international funds. Although, past performance (especially 4 months) does not predict future returns.

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Re: Fidelity ZERO funds?

Post by Northern Flicker » Sun Jan 06, 2019 9:34 pm

ETA: I think they have similarly outperformed the Vanguard funds.
The total US stock market fund FZROX is lagging VTSAX by about 50+ bp over its roughly 5 month existence. It likely needs a larger balance over which to amortize transaction cost before it will be competitive:

http://quotes.morningstar.com/chart/fun ... 2%3A955%7D
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Re: Fidelity ZERO funds?

Post by jmanter » Sun Jan 06, 2019 9:45 pm

jalbert wrote:
Sun Jan 06, 2019 9:34 pm
ETA: I think they have similarly outperformed the Vanguard funds.
The total US stock market fund FZROX is lagging VTSAX by about 50+ bp over its roughly 5 month existence. It likely needs a larger balance over which to amortize transaction cost before it will be competitive:

http://quotes.morningstar.com/chart/fun ... 2%3A955%7D
As many have pointed out, that chart changes if you move it by about a day or two. There was a lag on the first day or two of the fund.

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Re: Fidelity ZERO funds?

Post by Jack FFR1846 » Sun Jan 06, 2019 9:57 pm

jmanter wrote:
Sun Jan 06, 2019 9:45 pm
jalbert wrote:
Sun Jan 06, 2019 9:34 pm
ETA: I think they have similarly outperformed the Vanguard funds.
The total US stock market fund FZROX is lagging VTSAX by about 50+ bp over its roughly 5 month existence. It likely needs a larger balance over which to amortize transaction cost before it will be competitive:
As many have pointed out, that chart changes if you move it by about a day or two. There was a lag on the first day or two of the fund.
I did a comparison for fun since I have been comparing FSKAX to FZROX since I split my US equity position in half between these 2 funds on August 6th. So the new comparison for Aug 6 till Friday between FZROX and VTSAX shows FXROX slightly ahead. Like Jack Bogle says.....you get what you don't pay for.
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Re: Fidelity ZERO funds?

Post by Andrew321 » Sun Jan 06, 2019 10:13 pm

arcticpineapplecorp. wrote:
Sun Jan 06, 2019 9:00 pm
bck63 wrote:
Sun Jan 06, 2019 4:24 pm
1) I'm very loyal to Vanguard, so it kind of feels wierd.
It's funny no one has yet found it interesting that the OP says s/he's "loyal" to Vanguard without being aware that the word "fidelity" actually means "loyalty", "faithfulness", etc.:

https://www.google.com/search?client=fi ... elity+mean
...because Fidelity is at the vanguard of lowering expense ratios...

I couldn't resist. :D I'm sorry.

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Re: Fidelity ZERO funds?

Post by jmanter » Sun Jan 06, 2019 10:25 pm

Andrew321 wrote:
Sun Jan 06, 2019 10:13 pm
arcticpineapplecorp. wrote:
Sun Jan 06, 2019 9:00 pm
bck63 wrote:
Sun Jan 06, 2019 4:24 pm
1) I'm very loyal to Vanguard, so it kind of feels wierd.
It's funny no one has yet found it interesting that the OP says s/he's "loyal" to Vanguard without being aware that the word "fidelity" actually means "loyalty", "faithfulness", etc.:

https://www.google.com/search?client=fi ... elity+mean
...because Fidelity is at the vanguard of lowering expense ratios...

I couldn't resist. :D I'm sorry.
Dude...

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Re: Fidelity ZERO funds?

Post by bargainhuntingking » Sun Jan 06, 2019 10:44 pm

I just rolled my HSA over to Fildelity and have invested in their Zero funds. They are great options.

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Re: Fidelity ZERO funds?

Post by AlphaLess » Sun Jan 06, 2019 11:43 pm

bck63 wrote:
Sun Jan 06, 2019 4:24 pm
1) I'm very loyal to Vanguard, so it kind of feels wierd.
Two comments:
- what does 'wierd' mean?
- C'mon, it's not like you are cheating on your spouse.
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Re: Fidelity ZERO funds?

Post by jhfenton » Mon Jan 07, 2019 8:48 am

The ZERO funds are great choices in tax-advantaged accounts. Like all non-Vanguard mutual funds, they are not the ideal choice for taxable accounts. The reasons have been discussed at great length in the other threads on the topic.

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Re: Fidelity Files for Four Fidelity ZERO℠ Funds (0.00% ER)

Post by LadyGeek » Mon Jan 07, 2019 4:20 pm

bck63 - I merged your question into the on-going discussion, which is in the Investing - Theory, News & General forum.
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Re: Fidelity ZERO funds?

Post by Whakamole » Mon Jan 07, 2019 4:29 pm

jmanter wrote:
Sun Jan 06, 2019 9:15 pm
After the first two days or so, the Fidelity Zero funds have performed nearly exactly the same as any other US or international Index fund. As an experiment, I split my US and International funds when they opened. My first purchase was on August 7th (they opened on the 1st, I believe). The Zero funds have both outpaced the traditional funds (FSKAX and FTIHX) by less than half a percent (including new investments).

In a tax advantaged account, they seem to be very reasonable investments that have performed as well as the traditional funds in a rather volatile 4+ month period.

ETA: I think they have similarly outperformed the Vanguard funds...particularly the international fund. That's perhaps a more important fact, given the added cost for investing in international funds. Although, past performance (especially 4 months) does not predict future returns.
The international fund (FZILX) excludes small caps, so make sure to compare it to Vanguard's equivalent, VFWAX. Note that it still has a better return.

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Re: Fidelity Files for Four Fidelity ZERO℠ Funds (0.00% ER)

Post by Jack FFR1846 » Mon Jan 07, 2019 5:10 pm

Not VTMGX?

It's what I have (developed international) and am thinking of moving it over to Fidelity.
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Re: Fidelity ZERO funds?

Post by mptfan » Mon Jan 07, 2019 5:15 pm

bck63 wrote:
Sun Jan 06, 2019 4:24 pm
1) I'm very loyal to Vanguard, so it kind of feels wierd.
I understand how you feel because I feel the same way. I've been with Vanguard since the 1990's when I started investing, and, more importantly, I know that if it were not for John Bogle and Vanguard, that neither Fidelity or Schwab or anyone else for that matter would have embraced index funds and reduced their fees and commissions over time to the point now where they are actually beating Vanguard in some cases using loss leaders so it does feel somewhat disloyal to think about leaving Vanguard and go to a potentially lower cost index provider knowing this.

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Re: Fidelity ZERO funds?

Post by arcticpineapplecorp. » Mon Jan 07, 2019 5:36 pm

mptfan wrote:
Mon Jan 07, 2019 5:15 pm
bck63 wrote:
Sun Jan 06, 2019 4:24 pm
1) I'm very loyal to Vanguard, so it kind of feels wierd.
I understand how you feel because I feel the same way. I've been with Vanguard since the 1990's when I started investing, and, more importantly, I know that if it were not for John Bogle and Vanguard, that neither Fidelity or Schwab or anyone else for that matter would have embraced index funds and reduced their fees and commissions over time to the point now where they are actually beating Vanguard in some cases using loss leaders so it does feel somewhat disloyal to think about leaving Vanguard and go to a potentially lower cost index provider knowing this.
what I wrote in another post (viewtopic.php?f=10&t=267841#p4288341):
Fidelity Chairman Edward C. Johnson led the skeptics, assuring the world that Fidelity had no intention of following Vanguard's lead: "I can't believe that the great mass of investors are going to be satisfied with just receiving average returns. The name of the game is to be the best.
That was then, this is now:
Fidelity has been managing index funds for more than 25 years. The company, which is the 2nd largest index mutual fund manager in the industry with more than $216 billion in assets under management,1 now offers 19 Fidelity equity, fixed income and hybrid index mutual funds, 13 Fidelity Freedom® Index Funds, and 12 Fidelity passive ETFs.
https://www.fidelity.com/about-fidelity ... nd-line-up
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Re: Fidelity Files for Four Fidelity ZERO℠ Funds (0.00% ER)

Post by Whakamole » Mon Jan 07, 2019 5:47 pm

Jack FFR1846 wrote:
Mon Jan 07, 2019 5:10 pm
Not VTMGX?
That's a developed markets index; FZILX includes emerging markets.

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Re: Fidelity ZERO funds?

Post by jmanter » Mon Jan 07, 2019 9:09 pm

Whakamole wrote:
Mon Jan 07, 2019 4:29 pm
jmanter wrote:
Sun Jan 06, 2019 9:15 pm
After the first two days or so, the Fidelity Zero funds have performed nearly exactly the same as any other US or international Index fund. As an experiment, I split my US and International funds when they opened. My first purchase was on August 7th (they opened on the 1st, I believe). The Zero funds have both outpaced the traditional funds (FSKAX and FTIHX) by less than half a percent (including new investments).

In a tax advantaged account, they seem to be very reasonable investments that have performed as well as the traditional funds in a rather volatile 4+ month period.

ETA: I think they have similarly outperformed the Vanguard funds...particularly the international fund. That's perhaps a more important fact, given the added cost for investing in international funds. Although, past performance (especially 4 months) does not predict future returns.
The international fund (FZILX) excludes small caps, so make sure to compare it to Vanguard's equivalent, VFWAX. Note that it still has a better return.
Thank you for the clarification. They aren't exactly analogous to the total international funds I referenced; I forget about the omission of small caps.

sabhen
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Re: Fidelity Files for Four Fidelity ZERO℠ Funds (0.00% ER)

Post by sabhen » Mon Jan 07, 2019 10:46 pm

Fidelity index funds are good choices in tax-qualified accounts, but less tax-efficient in a taxable account.
Why?

Because of potential capital gains distribution in a taxable account?

Index funds like these rarely distribute capital gains.

2pedals
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Re: Fidelity Files for Four Fidelity ZERO℠ Funds (0.00% ER)

Post by 2pedals » Tue Jan 08, 2019 12:13 am

sabhen wrote:
Mon Jan 07, 2019 10:46 pm
Fidelity index funds are good choices in tax-qualified accounts, but less tax-efficient in a taxable account.
Why?

Because of potential capital gains distribution in a taxable account?

Index funds like these rarely distribute capital gains.
ETF funds rarely distribute capital gains. Index funds can and do distribute capital gains but typically not as much as active mutual funds. One exception, Vanguard VTSAX has a very good record of not distributing capital gains. Vanguard VTSAX did not distribute capital gains since 2001.
(https://www.bogleheads.org/wiki/Vanguar ... tributions) .

This has to do with the way this mutual fund is structured and patented at Vanguard.
Last edited by 2pedals on Tue Jan 08, 2019 9:52 am, edited 1 time in total.

bck63
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Re: Fidelity Files for Four Fidelity ZERO℠ Funds (0.00% ER)

Post by bck63 » Tue Jan 08, 2019 9:45 am

Thank you to everyone for their responses.

bck63
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Re: Fidelity Files for Four Fidelity ZERO℠ Funds (0.00% ER)

Post by bck63 » Tue Jan 08, 2019 9:52 am

LadyGeek wrote:
Mon Jan 07, 2019 4:20 pm
bck63 - I merged your question into the on-going discussion, which is in the Investing - Theory, News & General forum.
Thank you LadyGeek.

bck63
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Joined: Fri Sep 28, 2018 4:59 pm

Re: Fidelity ZERO funds?

Post by bck63 » Tue Jan 08, 2019 1:10 pm

AlphaLess wrote:
Sun Jan 06, 2019 11:43 pm
bck63 wrote:
Sun Jan 06, 2019 4:24 pm
1) I'm very loyal to Vanguard, so it kind of feels wierd.
Two comments:
- what does 'wierd' mean?
- C'mon, it's not like you are cheating on your spouse.
I just bought three Fidelity funds, two of the Zero funds and the US Bond Index Fund. None of them have minimums. That's a big deal for me right now. So now I'm a loyal Vanguard - and Fidelity - customer.

It was easy. :-)

Northern Flicker
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Re: Fidelity ZERO funds?

Post by Northern Flicker » Tue Jan 08, 2019 11:30 pm

Jack FFR1846 wrote:
Sun Jan 06, 2019 9:57 pm
jmanter wrote:
Sun Jan 06, 2019 9:45 pm
jalbert wrote:
Sun Jan 06, 2019 9:34 pm
ETA: I think they have similarly outperformed the Vanguard funds.
The total US stock market fund FZROX is lagging VTSAX by about 50+ bp over its roughly 5 month existence. It likely needs a larger balance over which to amortize transaction cost before it will be competitive:
As many have pointed out, that chart changes if you move it by about a day or two. There was a lag on the first day or two of the fund.
I did a comparison for fun since I have been comparing FSKAX to FZROX since I split my US equity position in half between these 2 funds on August 6th. So the new comparison for Aug 6 till Friday between FZROX and VTSAX shows FXROX slightly ahead. Like Jack Bogle says.....you get what you don't pay for.
Not what I’m seeing on M*, which has vtsax slightly ahead (by immaterial amounts).
Taking a break from Bogleheads.

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