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

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
User avatar
Mursili
Posts: 84
Joined: Tue May 15, 2012 8:32 pm

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.
When it comes to havoc, no one wreaks like me! - Dr. Heinz Doofenshmirtz

harikaried
Posts: 1253
Joined: Fri Mar 09, 2012 3:47 pm

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.

User avatar
GoldStar
Posts: 639
Joined: Wed May 23, 2018 10:59 am

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.

GeraniumLover
Posts: 122
Joined: Mon Feb 22, 2016 3:39 pm

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

Mike14
Posts: 77
Joined: Sun Jun 29, 2014 9:43 pm

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?

User avatar
jhfenton
Posts: 3535
Joined: Sat Feb 07, 2015 11:17 am
Location: Ohio

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.

tj
Posts: 2240
Joined: Thu Dec 24, 2009 12:10 am

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.

Mike14
Posts: 77
Joined: Sun Jun 29, 2014 9:43 pm

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?

User avatar
jhfenton
Posts: 3535
Joined: Sat Feb 07, 2015 11:17 am
Location: Ohio

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

User avatar
LadyGeek
Site Admin
Posts: 49280
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

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
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

mptfan
Posts: 4796
Joined: Mon Mar 05, 2007 9:58 am

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.

OnLevel
Posts: 23
Joined: Mon Feb 12, 2018 1:14 pm

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.

Jack FFR1846
Posts: 8105
Joined: Tue Dec 31, 2013 7:05 am

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
Bogle: Smart Beta is stupid

Post Reply