Vanguard vs Fidelity vs ?

[risknothing]

Who is the best company to use when investing in Mutual funds?

I currently have a target retirement 2045 fund at vanguard but there looks to be some real nice funds at fidelity that i would also like to have. Which has the best account features and funds?

[LuxLiving]

You'll get votes for both here. We use Fidelity for Hubster's Rollover IRA and we can AND DO buy some of Vanguard's products thru his 401-K program which is with American Funds.

Ima Saver here uses Vanguard.

[creditcardfree]

We have Vanguard for our rollovers and roths...low fees on the index funds, no loads. Happen to have Fidelity through DH former employer, too.

[hrbatyfan]

I'd say use Vanguard and one of their target retirement funds if you can initially cough up $3,000 or more for the initial funding. Vanguard's Roth IRA is quality all the way around, and the expense ratio is dirt cheap for their target funds (and most everything else).

If you do not have the initial $3,000 you can use Fidelity's Simple Start program which allows you to start a Roth IRA with as little as $200, as long as you continue to have $200 per month automatically added to your account. Fidelity's Roth IRA is a superb product as well, it's just the expense ratio for their target retirement fund is a little bit higher than Vanguard.

[Honkus]

Vanguard, no question. Their low-fee funds and straightforward, honest, principled approach unfortunately make them almost unique in the industry.

[trainedmonkey]

I love Fidelity as a Mutual Fund Clearning House. I don't personally own too many Fidelity Funds in my Fidelity accounts. I have 3 brokerage accounts. In these accounts I only hold Fidelity Funds in my emergency acct
due to their short term trading fees on the Fund Network purchases (most are 6month holding period if you buy through the Fund Network).

Granted they make a fee off the Fund Network Mutual Funds but I don't pay an overall account maintenance fee and as long as I buy NTF (no transaction fee) funds, transactions cost are nonexsistent.

It depends on what your looking for and whether you want to manage your account(s) by buying pure Vanguard Funds or if you're looking at buying multiple funds from different fund companies. I know Vanguard, Fidelity and Schwab all have the ability to buy from different fund companies but in general I really like my Fidelity accts. I like managing my money at a single company rather than having it everywhere.

If you go with Fidelity and you have a small balance, look into using all electronic interfaces (statements, confirms, etc). I think they waive the fees on smaller accounts if you go that route. You'll want to look at the cost of having your portfolio at all the companies and judge, based on your circumstances, which is best for you.

Just my opinion....

[kv968]

I would tell you to check out T Rowe Price if you want to stay in a target retirement fund. They're more aggressive than Vanguard and, although the ER is higher and the same as Fidelity's Freedom Funds (0.79% vs 0.21%), after doing some extensive research I think they're a better pick. I wanted to go with Vanguard originally but couldn't afford the $3000 minimum so decided to go with T Rowe's Automatic Asset Builder and just pay $50/month with the ability to add more as I go along. They're all great products but do yourself a favor and take a look at T Rowe.

[risknothing]

currently i have 3000 plus what i have gained in the Target Retirement 2045 and 3000 plus what i have gained in the International growth fund. My Plan is to invest another 3000 in the REIT Index fund early next year.

What do you think about this plan?

I personally would wait at least until I had the room above the $5000 per fund fee minimum before moving to another fund ($8000) to avoid the additional fund maintenance fee, yes it's small but every dollar counts right?


i.e. when I reach $8000 in the first fund, roll $3000 off to the new one, you will pay the $10 on the new fund but not the original because it's still at $5000. yes that means waiting until the beginning of year three under the current limitations but this isn't a race.


I'd also be just a tad concerned about your allocation there under your scenario but I'll let the more wizened ones speak to that. (although international has served you just fine here lately, that's for sure).


And with REITs (something I know nothing about so I ask in all humility), is there a concern of "buying at the top" right now?

[yellow heel]

If you put:

3000 to Target Retirement 2045
3000 to International
3000 to REIT

then you will have an asset allocation that looks like this:

Domestic Stock 25%
International 38%
Bond 3%
REIT 33%

which in some people's opinion is not very diversified. But then again who am I to judge your investment strategy. This is more of a FYI to give you the big picture.

[kv968]

Rexdart has a very good idea with waiting until you reach the $5000 mark so you don't then have to pay the $10 fee/fund. And with that, maybe you should think about putting that $3000 into the 2045 fund and then the year after that put $3000 into a REIT fund (if you are considering on continually putting in 3K a year that is). That would also bring your allocation to:

50% - 2045 fund
25% - Int'l
25% - REIT

Which may still be too much to hold in a REIT fund but not as bad.

[risknothing]

The vanguard funds are no load funds, so i never have to worry about this $10 fee. Next, how is that allocation not diversified. Explain to me how you could get more diversified then that?

Vanguard charges a $10 annual fee on all retirement account funds with a balance less than $5000 (until your balance with them reaches $50,000 in total).

[risknothing]

They charge that to accounts with less than $2,500. Index funds need to have over $10,00

[vishenda]

I have used them both for many years. I find them both to be excellent. If I HAD to choose one it would be Vanguard, based on their overall lower costs and broad index fund offerings, but if I HAD to use only Fidelity I would not be upset about it. Either way, you really can't go wrong. I suppose the choice for you might come down to whether you prefer index funds or managed funds. If indexed - Vanguard; if manged - Fidelity.

[kv968]

Originally Posted by risknothing

The vanguard funds are no load funds, so i never have to worry about this $10 fee. Next, how is that allocation not diversified. Explain to me how you could get more diversified then that?

The diversification with the funds is fine except you might be a little too heavily weighted in REITS IMO.

[yellow heel]

Sorry, I meant asset allocation was alittle off (not diversification).