Personal Investments • What Fidelity fund(s) for taxable?

Ahhh I wonder if I should just pick VTI then. I read up some on the wash sale possible issues, seems like it's not worth even worrying about if I just would do VTI.

I have only ITOT and IXUS in my taxable account. You might want to check the tax efficiency of FSKAX relative to ITOT.

Is there actually a good way to evaluate this difference? I saw tons of people saying FSKAX is less tax efficient than VOO/VTI/ITOT. But what magnitude are we talking? Like 0.05%? I can't imagine it'd be overly high impact for something like an index.

They are all wrong. FSKAX, and its international equivalent FTIHX, are significantly more tax-efficient than their equivalent Vanguard/iShares EFTs.

People are saying this because mutual funds are, generally speaking/in theory, less tax-efficient than EFTs due to capital gains distributions, but even factoring those in the Fidelity funds are more tax-efficient. FSKAX hasn't had a capital gains distribution since 2019, FTIHX since 2017.

My numbers (calculated from my 35%+NIIT tax bracket) for annual costs (taxes+ER):
-FSKAX: 0.076%
-VTI: 0.315%
-ITOT: 0.259%

The reason for this: VTI has a dividend yield of 1.4%, ITOT of 1.1%. FSKAX's is 0.3%. Capital gains distributions do matter, but for total market indices they are so low as to be inconsequential compared to dividend yield.

The difference is still small enough that some people won't care, especially if your taxes are lower. Pick whichever fund you like; just don't avoid Fidelity because you think you are saving on taxes.

Statistics: Posted by breakfastinbed — Thu Sep 12, 2024 6:31 pm — Replies 18 — Views 2492

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