For the tax deferred accounts I'm considering moving all the mutual funds that can be moved to Fidelity. VFIUX and VFSAX would have to be liquidated first and the cash moved. Then once at Fidelity I can restructure and purchase Fidelity ETFs or mutual funds. That way I would have less money out of the market for the few days it takes to complete the transfer.With their authorization and gratitude I'm managing 13 accounts at Fidelity for my mother, sister, wife and myself. (The reason for so many accounts is a mixture of traditional IRA, Roth IRA, Rollover IRA and taxable brokerage accounts etc. spread across 4 different people.)
Our primary equity position in 12 of these 13 accounts is VTI, which is Vanguard's ETF iteration of their VTSAX mutual fund. VTI has been easy to buy, sell, and automatically reinvest in either full or fractional shares at Fidelity without any extra steps or transaction fees. So I assume, but I'm not 100% certain, that other Vanguard ETFs can easily be managed similarly at Fidelity.
As noted previously, Fidelity doesn't permit automatic liquidation of ETFs held in their accounts to meet automatic withdrawals for Traditional IRA RMD etc. Fidelity also charges sales loads for 3rd-party mutual funds that compete directly with similarly structured Fidelity funds. For example, such is the case with VTSAX vs Fidelity's FSKAX. But Fidelity doesn't currently offer a total US stock market ETF like Vanguard's VTI, so there are no sales loads or fees to trade in and out of VTI at Fidelity.
The above is especially noteworthy for Vanguard mutual funds held in Vanguard taxable accounts, where it's desirous to avoid realizing capital gains before transitioning them to Fidelity. For qualified mutual funds where Vanguard also offers a virtually identically structured ETF, such as is the case with VTSAX's identical twin VTI, Vanguard permits a one-time one-way conversion from mutual fund version to ETF version without realizing gains or losses during the conversion.
The info in the two preceding paragraphs is likely why you've read that that Vanguard mutual funds should be converted to ETFs or cash before moving to Fidelity. For tax-protected IRA and Roth IRA accounts you can alternatively just sell your Vanguard funds, move the cash to Fidelity, and then buy whatever funds you like without worrying about realizing capital gains.
So for our 13th account, Mom's traditional IRA from which she's taking automatic monthly RMDs, I've simply funded that account with Fidelity's FSKAX mutual fund, which is similar to VTSAX. (The CAGR performance difference between FSKAX and VTSAX over the previous 10 year period after accounting for each fund's performance, fees and expenses is 0%.)You can cross-check your various mutual funds for available ETF counterparts in this PDF list compiled by Vanguard. Some, like VTMSX (Vanguard Tax-Managed Small Cap) and VYFXX (Vanguard NY Municipal Money Market,) don't have Vanguard ETF equivalents and also aren't available at all via Fidelity. So you'd have to liquidate them first at Vanguard, realizing any gains or losses if in taxable accounts, and then purchase something similar from Fidelity's offerings if that's still the way you want to go.As to what funds we hold:
Taxable Account:
VTIAX
VTMSX
VTSAX
VYFXX
Tax Deferred Accounts:
VFIAX
VFIUX
VFWAX
VBIRX
VIMAX
VFSAX
For the taxable account I would want to avoid capital gains as far as possible. So I would either move the mutual funds that Fidelity accepts and not add further to them, or convert to ETFs at Vanguard first so I can add to the funds without charge in the future at Fidelity. VTMSX remains my one problem child. I have considerable capital gains to deal with. So I may not move VTMSX. I have to do some tax projections and make some guesses about the future to try to time the sale for an advantageous tax treatment.
Thank you for your considered response.
Statistics: Posted by damjam — Tue Apr 30, 2024 8:14 pm — Replies 13 — Views 1088