Fidelity

Fidelity Investments is the marketing name for FMR LLC, a giant Boston-based mutual fund company and financial supermarket, and Vanguard's biggest competitor in recent years. Fidelity is sometimes credited with transforming the mutual fund business from a stodgy conservative world of funds managed by committee into the model of active funds managed by stock-picking superstar managers.

Boglehead-style investing at Fidelity
The building blocks of Boglehead-style investing are low-expense-ratio index mutual funds and/or ETFs. Vanguard fans would suggest that Vanguard has the best and most complete lineup of such funds, and that the most convenient place to hold Vanguard mutual funds is directly at Vanguard. Thus, the Bogleheads forum and Wiki tends to be Vanguard-oriented.

But investing according to the Boglehead philosophy certainly does not require you to invest at Vanguard or use Vanguard products. Here are some notes on how to do it at Fidelity. Writers have striven for accuracy, but investors should verify information before taking action.

Fidelity also provides a comparison of its funds to Vanguard. See: Fidelity Redefines Investing Appendix, Fidelity Investments, August, 2018.

Tools for Boglehead-style investing

 * Fidelity offers no-commission trades on 240 BlackRock iShares ETFs (Fidelity account required to view list) and 25 Fidelity ETFs covering various factor, sector, stock, and bond categories. The iShares ETFs in particular satisfy the criteria of "low-cost index ETFs" that cover most asset classes an ordinary investor would need. As of August 1, 2018, Fidelity no longer lists a charge for short-term sales of these funds; however, all ETF sales are subject to an activity assessment fee (from $0.01 to $0.03 per $1,000 of principal.


 * Fidelity offers 22 Fidelity Index Funds (formerly called Spartan funds). These are Fidelity's counterpart to Vanguard, very-low-expense-ratio index funds. Effective August 1, 2018, Fidelity eliminated the minimum investment requirement on all these funds, and adjusted all funds to match the former Institutional Premium class funds, and announced that the various classes of each fund will be merged in November, 2018. This change results in individual investors having access to funds with extremely low expense ratios, well below what is available to individual investors at Vanguard, even compared to the $10,000-minimum Admiral Class shares.


 * On August 3, 2018, Fidelity began offering two new Fidelity ZERO Index Funds with a 0.00% expense ratio, the Fidelity ZERO Total Market Index Fund and the Fidelity ZERO International Index Fund. These funds track proprietary Fidelity indexes covering the total US stock market and the global ex-US mid-/large-cap markets respectively.


 * Fidelity mutual funds do not share the same structure that allows Vanguard mutual funds to avoid distributing capital gains, which may have tax consequences for investors. Those investing in taxable accounts may wish to consider using the iShares ETFs instead.


 * This table shows the rough correspondence between Vanguard Admiral Class funds and low-cost no transaction fee mutual funds and commission-free ETFs available at Fidelity. In many cases they track different indexes and are not precisely equivalent. See the appropriate asset class article in index returns for historical return comparisons among various indexes. Note that all Fidelity funds are listed with the ticker that will remain active after the asset classes are merged in November 2018. Other tickers can be found in the appendix to the press release announcing the fund changes.


 * When investing in target-date funds, go by the fund's composition (asset allocation), not the date. Also see: Vanguard target retirement funds.


 * The transaction fees to buy Vanguard mutual funds at Fidelity are quite high --$75 for the first purchase, but subsequent purchases can be $5 per purchase if you set up an automatic investment plan. Admiral Class shares are not available for purchase at Fidelity. Vanguard has ETF equivalents for most of its index funds. Like other stocks and ETFs, Vanguard ETFs can be bought and sold at Fidelity for $4.95--but check Fidelity for current fee details. If you want to use actual Vanguard products, using Vanguard ETFs is probably the cheapest way to do so at Fidelity.


 * Fidelity offers individual treasury bonds (both nominal and TIPS) at auction free of commission or any markup or fees if you place your orders online. There is no limit on account size. No separate account is needed. The minimum purchase is $1,000.

Fidelity tips, links, and general orientation
The default account at Fidelity is a full-featured brokerage account. You can buy mutual funds (Fidelity and non-Fidelity funds), ETFs, individual stocks, bonds, brokered CDs, along with options and precious metals, all within the same Fidelity account. As of April 2015:


 * The Fidelity Account® is a top-level overview of the brokerage account services.


 * Trading Commissions and Margin Rates describes fees and commissions.


 * Investment Choices details the investments available through Fidelity.


 * Browse Fidelity Funds is a structured overview of 283 Fidelity funds (as of April 28, 2015).


 * Fund Picks From Fidelity® screens selections for funds Fidelity wants you to know about. The funds meet certain selection criteria, such as no transaction fees (see website for details) or having a high historical risk-adjusted return.