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. [1] 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.

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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.

Tools for Boglehead-style investing

The expense ratios are comparable. Go by the fund’s composition (asset allocation ), not the date. Also see: Vanguard target retirement funds.

• Fidelity Four-In-One Index Fund is an interesting possibility for a beginner’s fund, with a low 0.23% expense ratio. It is a fund-of-funds, all index funds, with about 60% total domestic stock market (in two funds), 25% international, and 15% bonds.

• For bonds, the closest thing to Vanguard Total Bond Market Index among Fidelity’s own mutual funds is Fidelity’s Spartan U. S. Bond Index Fund Advantage Class, FSITX with an expense ratio capped at 0.10%. iShares Barclays Aggregate Bond ETF (ticker AGG), which trades free of commissions, is another alternative.

• The closest thing to Vanguard Total International Stock Market Index among Fidelity’s own mutual funds is Fidelity’s Spartan Global Ex-US Index Fund Advantage Class, FSGDX. This fund, however, only includes large-caps.

• 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. In addition, 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 around $7.95—but check Fidelity for current fee details which may vary depending on your account size. If you want to use actual Vanguard products, using Vanguard ETF’s 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

• Fidelity’s online brokerage handbook has all the nitty-gritty details and fees and commissions and how Fidelity does business online.

• Fidelity’s full fee schedule is here .

• Browse Fidelity Funds is a structured overview of all 175 Fidelity funds. Using the Four and Five Star Fidelity Funds screening selection is a shorter overview of sorts, listing the recent good performers Fidelity wants you to know about. Fidelity’s mutual fund search screen seems to be the best way to find specific Fidelity funds.

See also

References

↑ Vanguard’s major competitors in Exchange Traded Funds are Blackrock ishares and State Street. ↑ See, Dow Jones US Total Stock Market Indexes Literature . ↑ Vanguard also offers the Vanguard Russell 2000 ETF. ↑ The fund is also available as the Vanguard FTSE Developed Markets ETF