Fidelity to Vanguard?
Recently found out that Vanguard ETFs are more tax-efficient than Fidelity. I have FSKAX, FXAIX, FTIHX in 401k, roth ira and taxable accounts, not that much money in them. (@Fidelity broker) Should I restart with VTI and VXUS, I plan 80% VTI and 20% in VXUS in taxable account. (start buying Vanguard etfs - not selling fidelity etfs and rebuying) Thanks π Tc 250 #personalfinance #investments
I am now focused on my taxable account, cant do much about tax advanced accounts
Ya wtf does that even mean tax efficient? Expense ratio is what matters. Frzox is way to go
I read that fidelity etfs have capital gains distributions. Not sure, I'm new to this π You can't transfer Frzox π
More "tax efficient" just means there's less selling and rebalancing that you'll have to report on your tax returns at the end of the year. The sales create the capital gains distributions you're talking about.
Vanguard's patent on mutual fund heartbeats expires in 2023. I'm sure Fidelity will adopt the same method to avoid realizing capital gains in mutual funds. Just hold dude. It's an astonishingly small amount of money and not worth selling and rebuying for. Also, this only applies to taxable brokerage accounts. You don't owe taxes for holdings in your 401k/roth so it doesn't apply.
You can buy vanguard ETFs on Fidelity in the mean time. ETFs don't require you to pay capital gains on underlying asset transactions like mutual funds do.
Yes. I am focusing on taxable acct now. I didn't mean to sell and rebuy, but stop investing in fidelity funds and start buying vanguard ETFs instead. How does it sound?
In the scenario you described, the issue is not that Vanguard is more tax-efficient than Fidelity. You're comparing mutual funds (FSKAX, FXAIX, FTIHX) against ETFs (VTI and VXUS). ETFs are more tax efficient than mutual funds. A more fair comparison would be Fidelity's mutual funds (FSKAX, FXAIX, FTIHX) against Vanguard's mutual funds (VTSAX, VFIAX, VGTSX). Or Blackrock's iShares ETFs (Fidelity partners with Blackrock for the type of index funds you want - ITOT and IXUS) vs Vanguard's ETFs (VTI and VXUS). Fidelity doesn't charge any fees to buy any ETFs. So you can have Vanguard ETFs under your Fidelity account without any penalty.
Oh I see, thanks for the info. I know that Fidelity charges $75 if I wanna buy VTSAX and other mutual funds, so i didn't bother those. I will go ahead to ahead with Vanguard etfs under my Fidelity acct. Quick question: is it better to have total stock market or sp500 under taxable account?
The difference is pretty much negligible in the long-term, IMO. I've asked the same question, and it seems there are times that the S&P 500 outperforms the Total Market, and vice versa. S&P 500 is mainly large-cap companies (i.e. big-name companies), while the Total Market has those plus mid and small-cap companies (think mid-sized companies and startups). You'd think the growth of the smaller companies would gain you a bit more, but I think the amount of diversification in total market makes those theoretical extra gains almost unnoticeable.
Mutual fund has different way of cost basis calculation compared to etf or stocks. It doesnβt mean one is better than the other but something to keep in mind. If you have mutual fund, you can not transfer it to another brokerage.
I see. So i have to sell it before moving to another brokerage? Wow, i thought only in-house funds aren't portable. Thanks
What do you mean more tax efficient
Iβd like to know as well
I read that fidelity etfs have capital gains distributions. Not sure, I'm new to this π