Fidelity Expands Their Index Fund Lineup

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
User avatar
corn18
Posts: 1604
Joined: Fri May 22, 2015 6:24 am

Re: Fidelity Expands Their Index Fund Lineup

Post by corn18 » Wed Jul 17, 2019 5:24 pm

Just bought $10k in my taxable account. I have FTABX in there now with capital gains, so I guess this will be my new taxable bond fund.
Don't do something, just stand there!

Jags4186
Posts: 4438
Joined: Wed Jun 18, 2014 7:12 pm

Re: Fidelity Expands Their Index Fund Lineup

Post by Jags4186 » Wed Jul 17, 2019 5:39 pm

Call_Me_Op wrote:
Tue Jul 16, 2019 8:23 am
mervinj7 wrote:
Tue Jul 09, 2019 1:31 pm


Hurray! Small Cap Value Index (FISVX) looks promising from the name. It could be a good alternative to IJS for those who tilt but don't want to use ETFs in their accounts.
Why are some people afraid to use ETFs?
I’m not afraid of ETFs I just prefer the simplicity of mutual funds. Vanguard sucks $2000/mo from my checking account into VTSAX. If I were using VTI I’d have to either switch to a company that provides automated ETF investing or place the order manually every month.

bck63
Posts: 989
Joined: Fri Sep 28, 2018 4:59 pm

Re: Fidelity Expands Their Index Fund Lineup

Post by bck63 » Wed Jul 17, 2019 6:46 pm

nedsaid wrote:
Wed Jul 17, 2019 5:07 pm
bck63 wrote:
Fri Jul 12, 2019 4:41 pm

I saw them when you first posted the link. Now, the new funds are gone. No fair! :confused
As other posters have noted, these funds are now live. I have checked this for myself.
Really?? Great news! Where did you find them?

EDIT Found them. Thank you nedsaid.

UpperNwGuy
Posts: 3339
Joined: Sun Oct 08, 2017 7:16 pm

Re: Fidelity Expands Their Index Fund Lineup

Post by UpperNwGuy » Wed Jul 17, 2019 6:52 pm

mervinj7 wrote:
Wed Jul 17, 2019 5:03 pm
UpperNwGuy wrote:
Tue Jul 16, 2019 8:57 am
Fidelity Municipal Bond Index Fund FMBIX .07% is the one that interests me.
Ok, I'll bite. Why would one choose it over MUB which is also 0.07% ER? I went ahead and placed a $1k order just to get my feet wet.
Because I prefer mutual funds to ETFs. I'm also interested in seeing how the composition of FMBIX differs from MUB and VTEAX/VTEB.

bck63
Posts: 989
Joined: Fri Sep 28, 2018 4:59 pm

Re: Fidelity Expands Their Index Fund Lineup

Post by bck63 » Wed Jul 17, 2019 6:56 pm

jbranx wrote:
Wed Jul 17, 2019 1:39 am
Fidelity has launched these funds. I just put in an order for FMBIX, the Fido Municipal Bond Index Fund tonight. I saw a news report on Bloomberg that they were launched. I didn't check the other funds, but I presume like the muni fund that about all the info currently available is a link to the prospectus. It's cost is the promised .07 bp; A. Johnson was quoted in the news piece saying the other offerings were cheaper than the funds from you know who.
Any way to find out the SEC yield on FMBIX?

Cash
Posts: 1509
Joined: Wed Mar 10, 2010 10:52 am

Re: Fidelity Expands Their Index Fund Lineup

Post by Cash » Wed Jul 17, 2019 8:06 pm

mervinj7 wrote:
Wed Jul 17, 2019 5:03 pm
UpperNwGuy wrote:
Tue Jul 16, 2019 8:57 am
Fidelity Municipal Bond Index Fund FMBIX .07% is the one that interests me.
Ok, I'll bite. Why would one choose it over MUB which is also 0.07% ER? I went ahead and placed a $1k order just to get my feet wet.
Easier to put all of my extra cash in a mutual fund. Just buy a dollar amount rather than shares.

gjlynch17
Posts: 120
Joined: Wed Apr 15, 2015 12:32 pm

Re: Fidelity Expands Their Index Fund Lineup

Post by gjlynch17 » Wed Jul 17, 2019 8:13 pm

Cash wrote:
Wed Jul 17, 2019 8:06 pm
mervinj7 wrote:
Wed Jul 17, 2019 5:03 pm
UpperNwGuy wrote:
Tue Jul 16, 2019 8:57 am
Fidelity Municipal Bond Index Fund FMBIX .07% is the one that interests me.
Ok, I'll bite. Why would one choose it over MUB which is also 0.07% ER? I went ahead and placed a $1k order just to get my feet wet.
Easier to put all of my extra cash in a mutual fund. Just buy a dollar amount rather than shares.
Plus, it appears that the Fidelity Fund includes AMT bonds whereas MUB does not. Hence, an investor who is subject to the AMT would likely prefer MUB whereas an investor who is not subject to the AMT would likely prefer FMBIX due to a likely higher yield. There may be other differences as well (e.g. duration, credit quality) that can be analyzed once Fidelity publishes information on holdings for FMBIX.

Cash
Posts: 1509
Joined: Wed Mar 10, 2010 10:52 am

Re: Fidelity Expands Their Index Fund Lineup

Post by Cash » Wed Jul 17, 2019 8:23 pm

gjlynch17 wrote:
Wed Jul 17, 2019 8:13 pm
Cash wrote:
Wed Jul 17, 2019 8:06 pm
mervinj7 wrote:
Wed Jul 17, 2019 5:03 pm
UpperNwGuy wrote:
Tue Jul 16, 2019 8:57 am
Fidelity Municipal Bond Index Fund FMBIX .07% is the one that interests me.
Ok, I'll bite. Why would one choose it over MUB which is also 0.07% ER? I went ahead and placed a $1k order just to get my feet wet.
Easier to put all of my extra cash in a mutual fund. Just buy a dollar amount rather than shares.
Plus, it appears that the Fidelity Fund includes AMT bonds whereas MUB does not. Hence, an investor who is subject to the AMT would likely prefer MUB whereas an investor who is not subject to the AMT would likely prefer FMBIX due to a likely higher yield. There may be other differences as well (e.g. duration, credit quality) that can be analyzed once Fidelity publishes information on holdings for FMBIX.
Where do you see that it includes AMT bonds? I just read that it *may* include them.

gjlynch17
Posts: 120
Joined: Wed Apr 15, 2015 12:32 pm

Re: Fidelity Expands Their Index Fund Lineup

Post by gjlynch17 » Wed Jul 17, 2019 9:11 pm

Cash wrote:
Wed Jul 17, 2019 8:23 pm

Where do you see that it includes AMT bonds? I just read that it *may* include them.
You are correct that the prospectus says that it may include AMT bonds not that it will. However, as FMBIX is an index fund that seeks to track the Bloomberg Barclays Municipal Bond Index (which I believe includes AMT bonds), I anticipate that FMBIX will contain AMT bonds. Neither the iShares (MUB) nor Vanguard (VTEAX/VTEB) contain AMT bonds so for high tax bracket investors who are not subject to the AMT the new Fidelity fund could offer a higher yield.

I am eager to see the initial portfolio and the first year performance of FMBIX.

jbranx
Posts: 1544
Joined: Thu Feb 09, 2017 6:57 pm

Re: Fidelity Expands Their Index Fund Lineup

Post by jbranx » Wed Jul 17, 2019 9:17 pm

bck63 wrote:
Wed Jul 17, 2019 6:56 pm
jbranx wrote:
Wed Jul 17, 2019 1:39 am
Fidelity has launched these funds. I just put in an order for FMBIX, the Fido Municipal Bond Index Fund tonight. I saw a news report on Bloomberg that they were launched. I didn't check the other funds, but I presume like the muni fund that about all the info currently available is a link to the prospectus. It's cost is the promised .07 bp; A. Johnson was quoted in the news piece saying the other offerings were cheaper than the funds from you know who.
Any way to find out the SEC yield on FMBIX?
It's probably going to be very close to the current SEC yield of VTEB: 1.92%. Duration seems to match with the S&P Muni Index Vanguard and Ishares MUB use. If they allow in the AMT bonds, they might pick up a little more yield. They are also doing sampling, so maybe they could find a little more yield somewhere. But I'm guessing it will be close to those two and close to FTABX, which is still charging .25 bp. I haven't mined the Fido prospectus, but the S&P index precludes investing in Puerto Rico and territories I recall.

JD13
Posts: 73
Joined: Thu Nov 01, 2018 8:12 pm

Re: Fidelity Expands Their Index Fund Lineup

Post by JD13 » Wed Jul 17, 2019 10:18 pm

Do you guys think it is ok to invest a large chunk 200k+ in FMBIX or should I wait and see how it performs?

jbranx
Posts: 1544
Joined: Thu Feb 09, 2017 6:57 pm

Re: Fidelity Expands Their Index Fund Lineup

Post by jbranx » Wed Jul 17, 2019 10:44 pm

JD13 wrote:
Wed Jul 17, 2019 10:18 pm
Do you guys think it is ok to invest a large chunk 200k+ in FMBIX or should I wait and see how it performs?
Since it's an index they are matching, I don't see any reason to think they will not be able to do it well. Fidelity's expertise in both indexing and bond investing is state of the art as far as I can tell. I'm not as familiar with the Bloomberg/Barclay's muni index as I am the Barclay's Agg, but it should be just as robust as one from a ratings agency. Given how fast Fido has gathered assets for the zero index funds, i would think they will get enough money in the fund early on to do well.

User avatar
Hiwatter
Posts: 105
Joined: Tue Aug 16, 2016 3:43 pm

Re: Fidelity Expands Their Index Fund Lineup

Post by Hiwatter » Tue Jul 23, 2019 4:10 pm

I live in Washington State.

How do I find/calculate what the "State" taxes would be on money invested in 'FMBIX - Fidelity® Municipal Bond Index Fund' (held in a Taxable account)?

Or, does it not apply at all since Washington State has no State Income Tax?

Thanks

ribonucleic
Posts: 99
Joined: Mon Feb 13, 2017 6:07 pm

Re: Fidelity Expands Their Index Fund Lineup

Post by ribonucleic » Thu Jul 25, 2019 5:51 pm

I can find no indication of how many different bonds are held by FMBIX.

I was hoping it would rival the 8,621 held by Vanguard Intermediate-Term Tax-Exempt (VWIUX).

tj
Posts: 2795
Joined: Thu Dec 24, 2009 12:10 am

Re: Fidelity Expands Their Index Fund Lineup

Post by tj » Thu Jul 25, 2019 6:43 pm

ribonucleic wrote:
Thu Jul 25, 2019 5:51 pm
I can find no indication of how many different bonds are held by FMBIX.

I was hoping it would rival the 8,621 held by Vanguard Intermediate-Term Tax-Exempt (VWIUX).

They need investors to contribute $$$ in order to purchase bonds.

JD13
Posts: 73
Joined: Thu Nov 01, 2018 8:12 pm

Re: Fidelity Expands Their Index Fund Lineup

Post by JD13 » Thu Jul 25, 2019 6:46 pm

jbranx wrote:
Wed Jul 17, 2019 10:44 pm
JD13 wrote:
Wed Jul 17, 2019 10:18 pm
Do you guys think it is ok to invest a large chunk 200k+ in FMBIX or should I wait and see how it performs?
Since it's an index they are matching, I don't see any reason to think they will not be able to do it well. Fidelity's expertise in both indexing and bond investing is state of the art as far as I can tell. I'm not as familiar with the Bloomberg/Barclay's muni index as I am the Barclay's Agg, but it should be just as robust as one from a ratings agency. Given how fast Fido has gathered assets for the zero index funds, i would think they will get enough money in the fund early on to do well.
I was trying to preview an order with this fund. It seems there a limit of max 100k I can use to buy this fund. Seems very strange

fennewaldaj
Posts: 907
Joined: Sun Oct 22, 2017 11:30 pm

Re: Fidelity Expands Their Index Fund Lineup

Post by fennewaldaj » Thu Jul 25, 2019 10:04 pm

JD13 wrote:
Thu Jul 25, 2019 6:46 pm
jbranx wrote:
Wed Jul 17, 2019 10:44 pm
JD13 wrote:
Wed Jul 17, 2019 10:18 pm
Do you guys think it is ok to invest a large chunk 200k+ in FMBIX or should I wait and see how it performs?
Since it's an index they are matching, I don't see any reason to think they will not be able to do it well. Fidelity's expertise in both indexing and bond investing is state of the art as far as I can tell. I'm not as familiar with the Bloomberg/Barclay's muni index as I am the Barclay's Agg, but it should be just as robust as one from a ratings agency. Given how fast Fido has gathered assets for the zero index funds, i would think they will get enough money in the fund early on to do well.
I was trying to preview an order with this fund. It seems there a limit of max 100k I can use to buy this fund. Seems very strange
Perhaps they are trying to avoid getting too much money all at once so they don't move the underlying markets or have cash drag?

mervinj7
Posts: 1327
Joined: Thu Mar 27, 2014 3:10 pm

Re: Fidelity Expands Their Index Fund Lineup

Post by mervinj7 » Thu Jul 25, 2019 10:31 pm

JD13 wrote:
Thu Jul 25, 2019 6:46 pm
jbranx wrote:
Wed Jul 17, 2019 10:44 pm
JD13 wrote:
Wed Jul 17, 2019 10:18 pm
Do you guys think it is ok to invest a large chunk 200k+ in FMBIX or should I wait and see how it performs?
Since it's an index they are matching, I don't see any reason to think they will not be able to do it well. Fidelity's expertise in both indexing and bond investing is state of the art as far as I can tell. I'm not as familiar with the Bloomberg/Barclay's muni index as I am the Barclay's Agg, but it should be just as robust as one from a ratings agency. Given how fast Fido has gathered assets for the zero index funds, i would think they will get enough money in the fund early on to do well.
I was trying to preview an order with this fund. It seems there a limit of max 100k I can use to buy this fund. Seems very strange
Did you try doing multiple orders of $100k each?

JD13
Posts: 73
Joined: Thu Nov 01, 2018 8:12 pm

Re: Fidelity Expands Their Index Fund Lineup

Post by JD13 » Thu Jul 25, 2019 11:35 pm

That should work, but the customer care was unable to provide any reasoning as to why that is

MisterBill
Posts: 564
Joined: Thu Dec 24, 2015 3:21 pm

Re: Fidelity Expands Their Index Fund Lineup

Post by MisterBill » Sun Jul 28, 2019 10:50 pm

mervinj7 wrote:
Thu Jul 25, 2019 10:31 pm
JD13 wrote:
Thu Jul 25, 2019 6:46 pm
I was trying to preview an order with this fund. It seems there a limit of max 100k I can use to buy this fund. Seems very strange
Did you try doing multiple orders of $100k each?
I ran into that with one fund when I was first moving my money into Fidelity index funds. As you suggested, I was able to place a second order to buy the rest. Does anyone know why they do this?

drk
Posts: 1667
Joined: Mon Jul 24, 2017 10:33 pm
Location: Seattle

Re: Fidelity Expands Their Index Fund Lineup

Post by drk » Sun Jul 28, 2019 11:15 pm

Hiwatter wrote:
Tue Jul 23, 2019 4:10 pm
How do I find/calculate what the "State" taxes would be on money invested in 'FMBIX - Fidelity® Municipal Bond Index Fund' (held in a Taxable account)?

Or, does it not apply at all since Washington State has no State Income Tax?
Correct. Washington State residents have no state tax considerations. Muni funds are tax-free for us as long as they are federal tax-exempt. Of course, this also makes such funds less attractive relative to taxable funds.

Post Reply