Would it be better to invest in Fidelity's free index funds or pay to be a bit more diversified with small caps with Fidelity's regular rock bottom low cost index funds?
According to Fidelity, the Fidelity Zero Total Market Index Fund (FZROX) owns 2,500 companies, and the international stock fund (FZILX) has about 2,300 companies. Both of these funds are free, with a 0% expense ratio.
The big difference between the Zero funds and the regular Fidelity index funds is that there are no small caps in the international fund and fewer small caps in the Zero total US market fund than their regular paid index funds.
The Fidelity Total International Index Fund (FTIPX) which has an international small cap with an expense ratio of .06 has 4673 stocks. The Fidelity Total US Market Index Fund (FSTMX) has 3402 stocks in it.
I am just starting to invest in a Roth IRA and don't have enough to buy to admiral shares at Vanguard yet. Vanguard funds are far more diversified than Fidelity. By comparison, the Vanguard Total Stock Market ETF (VTI) owns about 3,638 companies, and the Vanguard Total International Stock ETF (VXUS) about 6,149 companies.
So to recap,
The Fidelity Total US Market Index Fund (FSTMX) has 3402 stocks and costs .015%. Fidelity Zero Total Market Index Fund (FZROX) owns 2,500 companies and costs nothing.
Fidelity ZERO International Index Fund (FZILX) has about 2,300 companies and no small caps but is free. Fidelity Total International Index Fund (FTIPX) which has a small cap with an expense ratio of .06 has 4673 stocks.
All these funds should perform relatively similarly to the benchmarks equivalents except for the Zero International fund that doesn't have small caps. The difference between the Zero US Stock market and a more diversified fund is not the biggest difference as the small cap stocks have a much smalller cap weighting in the index, but small caps have historically had the best returns over the long term.
Which way would you recommend I invest?
Submitted September 05, 2018 at 04:06PM by Daendrew https://ift.tt/2MTnlF7
