Fidelity investor here. I recall reading through all of the posts after Fidelity announced their Zero ER funds a few weeks ago. It's been about 3 weeks, so I wanted to check in and see if I should jump on the bandwagon and change my portfolio. After 3 weeks of trading here are the results:
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Symbol 3-Aug 22-Aug %Return %Change FSIVX 42.6 42.18 0.9901 -0.99% FZILX 10.03 9.89 0.9860 -1.40% FSTVX 81.89 82.85 1.0117 1.17% FZROX 10.04 10.15 1.0110 1.10%
1) It's interesting that both ZERO funds are providing lower returns than their equivalent premium class index fund.
2) There are definitely important aspects of these funds other than expense ratio that can influence fund returns. Fidelity has announced it created proprietary indexes for their ZERO funds to follow, so the premium class funds are not following the same benchmark. Different index may result in different returns.
3) If this trend continues, the potential higher return of traditional premium class index funds will more than make up for the low fees one pays to be in those funds.
4) It's far too early to draw any conclusions, but I think it would be prudent to continue watching this. I won't be converting my premium index fund shares to the ZERO ER funds any time soon.