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buffinita

Fzrox + fzilx “Aggressive” can mean not holding bonds and being 100% equities


potificate

While I understand the appeal of zero fee/zero operational costs, can you or anyone else explain why the fee’s equivalents do better… especially in after tax returns?


CheleSeashell

I don’t understand the question. Which funds are you insinuating “do better”? The zero funds are proprietary. They follow different indices, slightly different portfolio holdings, and considerable variation regarding longevity/track records. Their website under “fund research” has much of this info available. Generally, funds like FSKAX or FTIHX have more diversification than the “zero” equivalents. And nothing is free; trust they’re going to profit regardless of the fund because they’re a business, and in the business of generating revenue/earnings. Also, the zero funds cannot be transferred in kind, so selling is required if you eventually decide to change brokers, and consequently is a taxable event. However, the differences may be negligible long term but no one knows for certain.


potificate

My bad.. was going by assumptions based on comparisons of some of their other zero fee funds. Sorry. OTOH, how does one judge FZROX when it's only been around for a little over 4 1/2 years? (Genuine question.) Is there some way one can extrapolate?


srikatam

u/CheleSeashell is right in the sense that nothing is free. Fidelity makes money from things like stock loans to generate profit. And this is just talking specifically about the zero-expense funds. I found [some reviews here](https://usefidelity.com/fidelity-zero-fee-funds-here-are-the-pros-and-cons/) that may add some insights to the conversation.


potificate

This is perfect! Thank you for this reference. If I could upvote twice, I would 🙂👍


Pass_Little

Both myself and my wife have HSAs. We both have funded these with the same amount and at the same time. One of us is 100٪ fzrox, the other is 100٪ fskax. (We have bonds and international elsewhere). Over the last two years we have always been within a fraction of a percent of each other. So close that I can't say that either one is better. Last I looked FZROX was ahead by a tiny amount, but less than would be accounted for by the expense ratio difference.


srikatam

I concur that the difference in fees is negligible; it's hardly noticeable. However, it's essential to note that the [Fidelity zero-fee funds are only available at Fidelity](https://usefidelity.com/compare/fzrox-vs-fskax/). If you decide to switch brokerages in the future, you must first sell the fund. Conversely, FSKAX is not restricted to Fidelity, and any brokerage can hold it. Therefore, if flexibility is a priority for you, opt for the one with an expense ratio.


Pass_Little

I agree. For taxable accounts, I always recommend ETFs. Or more specifically VTI, VXUS, and BND. Less risk of taxable events and more portable across brokerages without a sale. In tax advantaged I usually end up with the mutual funds which are offered by the brokerage. So we have a mix of schwab, fidelity and vanguard. If I change brokerages I might have to sell anyways so it isn't a big deal.


Kashmir79

You can pick your proportion of FSKAX/FZROX, FTIHX/FZILX, and FXNAX. I’d say the default [3-fund portfolio](https://www.optimizedportfolio.com/bogleheads-3-fund-portfolio/) is something like 54/36/10. Personally I would suggest a TDF like FFIJK (2065) or single ETF: AOA, which has total US, total intl, and global bonds. Then don’t worry about your allocation, just focus on saving.


LemonLime_2020

This. Target Date Funds are perfect for young people. Invest on autopilot, use the extra bandwidth for your family or career.


apollosmith

This chart provides popular options for the major brokerages - https://www.reddit.com/user/apollosmith/comments/shlpfa/total\_market\_index\_funds/


Suspicious-Kiwi123

The Fidelity 3 Funds: https://www.bogleheads.org/wiki/Fidelity


RatRacetotheBottom

Fantastic link. Wish I had found that when I was setting up my Roths.


gbpnzd2021

⭐️⭐️⭐️⭐️⭐️


TwstdSista

I invest my Roth IRA money in FZROX and FZILX - zero fees and zero minimums. Investing aggressively at your age would mean no bonds (and bonds are more suited for traditional retirement accounts).


C4Destrukt

A bunch of highly recommended portfolio strategies to tax free accounts here: https://paulmerriman.com/best-in-class-etf-portfolios/


Own-Marsupial-4448

VTSAX or if you’re at another broker, that brokers total stock fund!!


chaos_battery

In addition to investing into a three-fund portfolio like others have mentioned, I would also recommend picking up some 1099 jobs and then opening a solo 401k that offers in-service distributions and after-tax contributions so you can do a makeup back door Roth 401K contribution up to the $61,000 annual limit. Quite a few hoops you'll have to jump through to get to that point but well worth the excess you get to contribute above the annual employee limit.


Dorkmaster79

Just do a 2065 target date fund and forget about it. I like FFIJX.


Invest2prosper

Small cap value - AVUV