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ultranaut@lemmy.world 2 weeks agoIf you have an account with Fidelity, FZROX should be a better choice than VTI. Unless you enjoy investing or want to really get into it, either do a target date fund for the easiest and lowest risk, or a total market fund like VTI, or an S&P500 fund like VOO. You really don’t need to overcomplicate beyond that, except to potentially start buying bonds when you are nearing retirement if you didn’t choose a target date fund.
partial_accumen@lemmy.world 2 weeks ago
I recommend FSKAX over FZROX. There are few minor differences. Yes FZROX has a lower expense ratio, but it BARELY lower when compared to FSKAX. My understanding is the biggest downside to FZROX is that you can’t hold that in any other brokerage. So if one day you decide you don’t like Fidelity you have to sell all your FZROX and then buy something else offered at the other brokerage. In a retirement fund this isn’t so much a big deal, but could mean you miss out on gains between the sale and the purchase of whatever else you replace it with.
If you’re investing in a non-retirement account this is a BIG deal, as any gains would be taxed at the time of sale. This can mean you pay 15%-20% on the gains just to switch brokerages. FSKAX doesn’t have that limitation, and you’d be able to simply do an “in kind” transfer of the securities to your new brokerage without any tax events/consequences. To me, that portability is worth the tiny different in expense ratio.
ultranaut@lemmy.world 2 weeks ago
That is the downside, FZROX is only available to Fidelity customers. There’s also a potential risk it won’t track total market performance as well as predicted because one of the ways they keep the expense ratio at zero is by only purchasing what is supposed to be an equivalent subset of the total market to keep their transaction costs down. I don’t remember the specifics but I think they leave out lots of tiny companies and its not a significant risk because they couldn’t actually move the needle one way or the other.