Fidelity

Boglehead-style investing at Fidelity

Fidelity Investments is the marketing name for FMR LLC, a giant Boston-based mutual fund company and financial supermarket, and perhaps Vanguard's currently chief competitor. Fidelity is sometimes credited with transforming the mutual fund business from a stodgy conservative world of funds managed by committee to one of active funds managed by stock-picking superstars. As of 2010, the three biggest mutual fund companies are Vanguard, American Funds, and Fidelity.

The building blocks of Boglehead-style investing are low-expense-ratio index mutual funds 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; the Bogleheads forum and Wiki tends to be Vanguard-oriented. But it is easy to have your account elsewhere and still do Boglehead-style investing. Here are some notes on how to do it at Fidelity.

As of Nov. 2010:


 * Fidelity's online brokerage handbook, which has all the nitty-gritty details and fees and commissions and such.


 * The full fee schedule is here.


 * Don't overlook the 25 iShares ETFs for which Fidelity offers free online trades. They form a good toolkit.


 * Don't overlook the eight Fidelity Spartan mutual funds. These are Fidelity's answer to Vanguard, very-low-expense-ratio index funds. There are some holes in that lineup: no total bond market index.


 * The closest thing to Vanguard Total Bond Market Index among Fidelity's own mutual funds is Fidelity's U. S. Bond Index Fund, FBIDX. Its expense ratio, 0.32%, is a little high by Boglehead standards.


 * The transaction fees to buy Vanguard [b]mutual funds[/b] at Fidelity are quite annoyingly high--$75 for the first purchase. But like other stocks and ETFs, Vanguard ETFs can be bought and sold for the usual $7.95--check Fidelity for current fee details which may depend on your account size. If you want actual Vanguard products, using Vanguard ETF's is probably the cheapest way to get them at Fidelity.