Author Topic: Vanguard vs. Fidelity i-shares  (Read 4671 times)

aspiretoretire

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Vanguard vs. Fidelity i-shares
« on: May 14, 2015, 08:20:10 AM »
Hi all,
I was advised recently by a much more fluent financial friend that Fidelity ishares are just as decent as vanguard as far as fees etc. Thoughts?
Thanks

wtjbatman

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Re: Vanguard vs. Fidelity i-shares
« Reply #1 on: May 14, 2015, 08:46:06 AM »
They're not wrong. If you're looking for low cost and diversified index funds, Vanguard isn't the only option.

The question is usually what funds do you have access to? Are you investing in a 401k where the investment options are limited? Or in an IRA where you can invest in anything?

aspiretoretire

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Re: Vanguard vs. Fidelity i-shares
« Reply #2 on: May 14, 2015, 09:11:09 AM »
In this case an IRA

forummm

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Re: Vanguard vs. Fidelity i-shares
« Reply #3 on: May 14, 2015, 10:41:59 AM »
The Fidelity Spartan funds are almost the same fees as comparable Vanguard funds. I would just go with Vanguard. You can't go wrong there.

GGNoob

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Re: Vanguard vs. Fidelity i-shares
« Reply #4 on: May 14, 2015, 11:10:02 AM »
It's not by much, but the iShares ETFs are more expensive. Just go with Vanguard.

Tyler

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Re: Vanguard vs. Fidelity i-shares
« Reply #5 on: May 14, 2015, 02:00:26 PM »
Hi all,
I was advised recently by a much more fluent financial friend that Fidelity ishares are just as decent as vanguard as far as fees etc. Thoughts?
Thanks

Fidelity Spartan index funds are largely equivalent to Vanguard index funds.  Both have very low fees, and you'll be fine with either.

"iShares" is a brand name for a class of ETFs run by another company (BlackRock) completely separate from the Fidelity and Vanguard brokerages.  You can buy iShares ETFs from both brokerages, paying the trading fee / commission.  Note that Fidelity does have a special relationship with iShares, allowing you to purchase many of their ETFs commission-free.  https://www.fidelity.com/etfs/ishares
« Last Edit: May 14, 2015, 02:38:30 PM by Tyler »

ElMono

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Re: Vanguard vs. Fidelity i-shares
« Reply #6 on: May 14, 2015, 03:20:18 PM »
Personally, I have the 'core' of the portfolio in vanguard. This includes US total stock market index, international and emerging market position along with the bonds. I love fidelity for the more specialty ETF - like microcaps, emerging markets small caps, and region specific ETF. Having the ETFs at fidelity gives a little more diversification to the 'folio.

forummm

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Re: Vanguard vs. Fidelity i-shares
« Reply #7 on: May 14, 2015, 04:34:27 PM »
Personally, I have the 'core' of the portfolio in vanguard. This includes US total stock market index, international and emerging market position along with the bonds. I love fidelity for the more specialty ETF - like microcaps, emerging markets small caps, and region specific ETF. Having the ETFs at fidelity gives a little more diversification to the 'folio.

Having ETFs with another mutual fund company does not provide any diversification. If you own VTSAX and VTIAX (as you say), then these other stocks you are purchasing are just duplicating stuff you already own--except possibly very small microcaps or other stocks considered "uninvestable" by certain index creators.

ElMono

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Re: Vanguard vs. Fidelity i-shares
« Reply #8 on: May 14, 2015, 05:07:25 PM »
Personally, I have the 'core' of the portfolio in vanguard. This includes US total stock market index, international and emerging market position along with the bonds. I love fidelity for the more specialty ETF - like microcaps, emerging markets small caps, and region specific ETF. Having the ETFs at fidelity gives a little more diversification to the 'folio.

Having ETFs with another mutual fund company does not provide any diversification. If you own VTSAX and VTIAX (as you say), then these other stocks you are purchasing are just duplicating stuff you already own--except possibly very small microcaps or other stocks considered "uninvestable" by certain index creators.

Totally agree - having ETF or mutual funds with other companies  while owning the same fund does not diversify at all. But you might be missing the point I was trying to make. The point is that some companies like Vanguard don't give you a good option for investing in Latin America or other regions or specialty ETFs. Example - say you as an investor want a low cost India ETF or China ETF ---well  Fidelity does through iShares. Thus owning some funds through Vanguard and Fidelity does give you some additional diversification. Also note, Vanguard and Fidelity use different benchmarks for emerging markets. One of the companies uses FTSE the other uses MSCI.

Tyler

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Re: Vanguard vs. Fidelity i-shares
« Reply #9 on: May 14, 2015, 06:15:41 PM »
Spreading money between different brokerages and fund companies does provide institutional diversification to mitigate counterparty risk.  Most people don't really understand the levels of ownership between you and your stock/bond/asset when you buy into a fund. 

When you buy a fund like SPY, you actually have at least two companies between you and your stock.  Your brokerage (Fidelity, Vanguard, etc.) and the financial firm running the fund/ETF (State Street in the SPY example).  Some funds like gold ETFs and REITs are even more complex with multiple layers and parties involved.  Then there's the layers of securities lending that goes on inside many funds, where "your" shares are often lent out to companies shorting the same stock (they virtually all do this -- even Vanguard).  You really need to read the prospectus!  The large companies have good records but are still run by human beings.  If you had all your money in SPDR funds you'd be in trouble if State Street ever had issues as a company.  Same with iShares and BlackRock.  Buying a "house brand" Fidelity or Vanguard fund removes one extra layer, but the principle still applies.  Mixing up the fund companies helps minimize your exposure should one of them do something stupid with your money. 

There's also an argument to be had for splitting your money between brokerages.  Even if you totally trust Vanguard as a company, it may not be wise to have only one login between an identity thief and your life savings.  Having access to half your money at Fidelity or elsewhere would be very helpful while you sort things out. 

« Last Edit: May 14, 2015, 07:57:23 PM by Tyler »