401k Fidelity fees around 1%

I just spent all morning looking over the options provided in my 401k
plan. It's provided by Fidelity. The most valuable piece of information
gleaned from my research is that Fidelity's fees are way higher than
Vanguard's. The only one I found with a reasonable fee was the Spartan
500 (0.1%) which tracks the S&P. All else, fees were close to or
greater than 1%. Fortunately there are 3 Vanguard funds available too,
so I'm contributing to those - which means I'm going to be heavily into
small caps, emerging mkts and REITs... How can Fidelity compete with
those (relatively) high fees - anyone putting in a morning's research
will pass over their offerings.

Re: 401k Fidelity fees around 1%

"spasmous" <> wrote in message
news:
> I just spent all morning looking over the options provided in my 401k
> plan. It's provided by Fidelity. The most valuable piece of information
> gleaned from my research is that Fidelity's fees are way higher than
> Vanguard's. The only one I found with a reasonable fee was the Spartan
> 500 (0.1%) which tracks the S&P. All else, fees were close to or
> greater than 1%. Fortunately there are 3 Vanguard funds available too,
> so I'm contributing to those - which means I'm going to be heavily into
> small caps, emerging mkts and REITs... How can Fidelity compete with
> those (relatively) high fees - anyone putting in a morning's research
> will pass over their offerings.

When comparing like funds, returns often offset fee differences, and more.
If two funds have the same average annual return, then sure, you pick on the
basis of fees, perhaps.

I'm a fee hawk, but I have often selected funds with somewhat higher annual
fees than others based on the fact that I expected the returns of the higher
priced fund to offset the fees.

Mike

Re: 401k Fidelity fees around 1%

"MichaelC" <> wrote in message
news:nCLLf.16297$
>
> "spasmous" <> wrote in message
> news:
> > I just spent all morning looking over the options provided in my 401k
> > plan. It's provided by Fidelity. The most valuable piece of information
> > gleaned from my research is that Fidelity's fees are way higher than
> > Vanguard's. The only one I found with a reasonable fee was the Spartan
> > 500 (0.1%) which tracks the S&P. All else, fees were close to or
> > greater than 1%. Fortunately there are 3 Vanguard funds available too,
> > so I'm contributing to those - which means I'm going to be heavily into
> > small caps, emerging mkts and REITs... How can Fidelity compete with
> > those (relatively) high fees - anyone putting in a morning's research
> > will pass over their offerings.
>
> When comparing like funds, returns often offset fee differences, and more.
> If two funds have the same average annual return, then sure, you pick on
the
> basis of fees, perhaps.
>
> I'm a fee hawk, but I have often selected funds with somewhat higher
annual
> fees than others based on the fact that I expected the returns of the
higher
> priced fund to offset the fees.
>
> Mike

I have to think that the OP is comparing managed funds at Fidelity with
unmanaged funds (index funds) at Vanguard. The real question is not about
fees but about whether to go with managed vs. unmanaged funds.

-herb

Re: 401k Fidelity fees around 1%

"spasmous" <> wrote in message
news:
>I just spent all morning looking over the options provided in my 401k
> plan. It's provided by Fidelity. The most valuable piece of information
> gleaned from my research is that Fidelity's fees are way higher than
> Vanguard's. The only one I found with a reasonable fee was the Spartan
> 500 (0.1%) which tracks the S&P. All else, fees were close to or
> greater than 1%. Fortunately there are 3 Vanguard funds available too,
> so I'm contributing to those - which means I'm going to be heavily into
> small caps, emerging mkts and REITs... How can Fidelity compete with
> those (relatively) high fees - anyone putting in a morning's research
> will pass over their offerings.

Not all of them.

As far as fees go, almost all of Fidelity's index fund expenses are 0.10%.
FUSEX 0.10%
FSTMX 0.10%
FSIIX 0.10%
FSEMX 0.10%
FSMKX 0.10%
FNCMX 0.45%

FCNTX 9th out of 1,070 in categoryfor 5 years
FLPSX 10th out of 256 in categoryfor 5 years
FEXPX 21st out of 1,153 in categoryfor 5 years
FSLSX 73d out of 256 in categoryfor 5 years
FDVLX 16th out of 146 in categoryfor 5 years
FLVCX 4th out of 256 in categoryfor 5 years

Maybe it's your 401k and not Fidelity.

Re: 401k Fidelity fees around 1%

"Herb" <> wrote in message
news:WXLLf.454546$
>
> "MichaelC" <> wrote in message
> news:nCLLf.16297$
> >
> > "spasmous" <> wrote in message
> > news:
> > > I just spent all morning looking over the options provided in my 401k
> > > plan. It's provided by Fidelity. The most valuable piece of
information
> > > gleaned from my research is that Fidelity's fees are way higher than
> > > Vanguard's. The only one I found with a reasonable fee was the Spartan
> > > 500 (0.1%) which tracks the S&P. All else, fees were close to or
> > > greater than 1%. Fortunately there are 3 Vanguard funds available too,
> > > so I'm contributing to those - which means I'm going to be heavily
into
> > > small caps, emerging mkts and REITs... How can Fidelity compete with
> > > those (relatively) high fees - anyone putting in a morning's research
> > > will pass over their offerings.
> >
> > When comparing like funds, returns often offset fee differences, and
more.
> > If two funds have the same average annual return, then sure, you pick on
> the
> > basis of fees, perhaps.
> >
> > I'm a fee hawk, but I have often selected funds with somewhat higher
> annual
> > fees than others based on the fact that I expected the returns of the
> higher
> > priced fund to offset the fees.
> >
> > Mike
>
> I have to think that the OP is comparing managed funds at Fidelity with
> unmanaged funds (index funds) at Vanguard. The real question is not about
> fees but about whether to go with managed vs. unmanaged funds.
>
> -herb

Sure. That's an entirely different discussion.....

Mike


>
>

Re: 401k Fidelity fees around 1%

Ed wrote:
> Maybe it's your 401k and not Fidelity.

Yeah, I think that's it. Your 401k probably has Vanguard index funds
and Fidelity managed funds. You should look at Fidelity and Vanguard's
own websites to compare apples to apples.

Re: 401k Fidelity fees around 1%

Ah yes, you're right. My apologies, I clearly missed a few. After
further research, another one I saw with a low fee is Fidelity
Four-in-One Index Fund (FFNOX) - 0.1%. It's comprised of 4 separate
indices (55% Spartan 500 Index Fund, 15% Spartan Extended Market Index
Fund, 15% Spartan International Index Fund, and 15% Fidelity U.S. Bond
Index). Thanks for sharing your knowledge!

Re: 401k Fidelity fees around 1%

I am curious: Does your 401(k) limit you to only certain Fidelity funds? For
example, can you also buy FSIIX for your 401(k)? It has a very low expense
ratio, too.

OTOH, 401(k) issues aside, Vanguard is the leader when it comes to low cost
index funds, by far. (Service and brokerage at Vanguard's are a different
issue.)

"spasmous" <> wrote
> Ah yes, you're right. My apologies, I clearly missed a few. After
> further research, another one I saw with a low fee is Fidelity
> Four-in-One Index Fund (FFNOX) - 0.1%. It's comprised of 4 separate
> indices (55% Spartan 500 Index Fund, 15% Spartan Extended Market Index
> Fund, 15% Spartan International Index Fund, and 15% Fidelity U.S. Bond
> Index). Thanks for sharing your knowledge!
>

Re: 401k Fidelity fees around 1%

"spasmous" <> wrote in message
news:
> Ah yes, you're right. My apologies, I clearly missed a few. After
> further research, another one I saw with a low fee is Fidelity
> Four-in-One Index Fund (FFNOX) - 0.1%. It's comprised of 4 separate
> indices (55% Spartan 500 Index Fund, 15% Spartan Extended Market Index
> Fund, 15% Spartan International Index Fund, and 15% Fidelity U.S. Bond
> Index). Thanks for sharing your knowledge!
>

Fees are usually low when no thinking is involved.... :-)

Mike

Re: 401k Fidelity fees around 1%

"Bucky" <> wrote in message
news:
> Ed wrote:
> > Maybe it's your 401k and not Fidelity.
>
> Yeah, I think that's it. Your 401k probably has Vanguard index funds
> and Fidelity managed funds. You should look at Fidelity and Vanguard's
> own websites to compare apples to apples.

In an apples to apples comparison, Vanguard still beats Fidelity hands down
in fund expenses. As of 2004, the average Vanguard actively managed fund
expense ratio was 0.47%.

(Vanguard rarely shifts its fees by more than a couple of basis points, so
this is likely still very close to the true average).

Contrast that with Fidelity, where one is hard pressed to find any actively
managed fund charging less than 1/2%. Using Fidelity's own screener, the
only non-index Fidelity funds under 0.50% that came up were a few bond funds
(and most of these were still at or above 0.47% - Vanguard's average). The
only non-index Fidelity retail funds costing less than 0.47% were:

- Intermediate Muni Income Fund (FLTMX) - 0.42%
- Mass Muni Income Fund (FDMMX) - 0.46%
- Tax-Free Bond Fund (FTABX) - 0.22%



(It is rather curious that a lot of bond funds didn't show up under 0.47%,
since Fidelity made such a big deal out of lowering bond expenses to 0.45%
)

On the plus side, Fidelity's screener showed an additional 84 funds with
expenses between 0.51% and 0.99%. FWIW, over 90% of the Fidelity funds in
our 401(k) plan have expenses under 1%.

--
Mark Freeland