Users browsing this forum: Bing [Bot] , DanFrancis , doingwell , fz , mgbt , user and 40 guests. Taxable, in Fidelity, Total Stock Market Index Mutual Fund or ETF better for the long run?

Have a question about your personal investments? No matter how simple or complex, you can ask it here. This is a taxable account, in Fidelity. As per asset allocation, this is for Total Stock Market Index. Between the mutual fund and the ETF is there a slight advantage? The reason, I bring this up. I do see Rick Ferri, quoted, buying that Mutual fund or ETF for the same fund or asset class, is like buying the shoe, based on the box. No big difference in the underlying equity.

Also read the difference in Vanguard mutual fund and ETF is minimal as the underlying equity is the same 3. However read, here and there that some slight tax advantages in holding ETF in taxable? How far this is valid?

Stock Market ETF Please help, if there is a clear tax advantage in using the ETF? If going EFT at Fidelity, is ITOT is the best or do I need to see other alternatives.

Appreciate all the help. Last edited by LiveSimple on Tue Jan 17, 4: A total market mutual fund and an ETF will perform similarly on an after-tax basis. What tax bracket are you in? If you anticipate tax gain harvesting then there's an argument to be made for ETFs. Otherwise, I wouldn't recommend you make this decision on tax consideration.

Fidelity - Bogleheads

Rick Ferri is right about buying based on the shoe box. The ETF will have slightly lower fees and the ability to buy and sell at will. I am naturally frugal so I tend to go for the ETF.

Notice that the traditional mutual fund has distributed capital gains the last couple years and probably other times , whereas the ETF has never done so. That's the power of the ETF structure. Even if a mutual fund has low turnover of its portfolio, to meet investor redemptions, securities need to be sold, sometimes realizing positive capital gains.

Stock Market ETF ITOT is fine, probably your best option there.

Just to clarify you are talking about a mutual fund and the ETF version of the exact same fund? I'd go with that.

ITOT has been more tax efficient due to the capital gains distributions of Fidelity Total Market Index Fund. I think for tax efficiency, the ETF is the winner, and if you want a total U.

Fidelity Funds - Mutual Funds from Fidelity Investments

Of course mutual funds have their advantages too. If so, you'll need to consider the tax implications of the change.

Will there be cap gains if you sell TSM to buy the ETF? It is more tax-efficient. Vanguard funds are different. FSTVX does not have that advantage. As someone who holds FSTVX I agree with those who recommend ITOT. LiveSimple- I'm unclear as to whether you own Fidelity TSM right now and are considering changing to ITOT ETF in a taxable account.

I don't like buying at market and have only done it a few times. I use Fidelity for most of my mutual funds but I did start buying VTSAX last year instead of FSTVX because of the capital gain issues. Actually I'm not sure if another broker would let you transfer in FSTVX.

ITOT is commission free at Fidelity, VTI Vanguard total stock ETF would cost you a few bucks to trade but you can theoretically load up on VTI in Fidelity if you don't mind absorbing the trading costs and move that around to other brokers as well.

I think your best choices are either ITOT or VTI.

Fidelity - Bogleheads

This post provides a good analysis of the two: I hold VTSAX at Vanguard and all else is at Fidelity. I don't think you can buy VTSAX at Fidelity. If you don't want FSTVX and want to keep all assets at Fidelity then ETFs are your best bet. Actually ETFs are probably your best bet in a taxable account IF you feel comfortable with them because they are very portable.

I don't feel comfortable with them. Who is online Users browsing this forum: Home Board index All times are UTC No guarantees are made as to the accuracy of the information on this site or the appropriateness of any advice to your particular situation.