Vanguard vs. Fidelity Index Funds (2022): Which Is Best?

Someone asks:

I’m very new to investing. My wife and I want to open a Roth IRA. Thinking about Fidelity or Vanguard. Which would you prefer between those two?


Vanguard vs. Fidelity: Platform Comparison

Daren M:

Fidelity, Vanguard, or Schwab are all on the same level. They’re the “big three” if you will. So I would say it just depends on what your favorite color is - I like blue so I opened mine with Schwab! I do enjoy their mobile/desktop interface as well. One difference would be Fidelity has zero fee index funds if that is the type of investing you’re interested in.

Sonia B:

I’ve had Fidelity for 20 years. Love their platform, user friendly. Great customer service and data analytics to research. May be biased but I won’t change.

Racel C:

I have both for 401k. Vanguard customer service is terrible. It took me months and hours on the phone to get access to my online banking. I had to write a bad review on their FB account just to get their attention. They gave me a number that they don’t post online to get a simple password reset.

Fidelity is very easy to use and I have no issues.

Hiram C:

I have both. Like the index funds that Vanguard has but the Fidelity user interface is much better in my opinion. You can buy the ETF version of the fund in Fidelity or even the index fund but with an extra fee.

Eddie M:

I like all of the features Fidelity offers and their user interface. Also you can do fractional shares which I think Vanguard doesn’t do if I’m not mistaken. However they are both the best in the business.

Vanguard vs. Fidelity: Index Funds Comparison

Ken K:

I think also depends how much you are investing. It used to be to get access to the decent funds(admiral) in Vanguard you needed 10k invested. Also Fidelity now has the zero fee funds like FZROX. But TD Ameritrade and Merrill Edge also have lowered their costs a lot. The other big difference is mutual fund options, but I tend towards ETFs so not a lot of difference.

Bob T:

I have both Fidelity and Vanguard and think highly of both. Fidelity gets a lot of marketing from a handful of zero expense funds but in general the Fidelity bond funds have much higher expense ratios than Vanguard equivalents. As one gets older & has more money invested - then bonds become a higher % of ones asset mix. I think Fidelity’s overall expense ratios are higher because of the significantly higher bond fund expense numbers.

Overall most Vanguard fund expenses are low because most are index funds. Fidelity has a broader range of fund expense ratios because of a history of more active management.

Just need to do your homework and look at expense ratios, capital distributions, fund turnover ratio, index used for tracking purposes, etc for every fund considered.

Imran M:

I prefer Vanguard’s funds.

Fidelity’s Zero ER funds do come at a cost. For example, FZROX (Fidelity Zero Total Market Index Fund) has a 0% ER, but dividends are paid out annually, so they hold the investors money for a year before they distribute dividends, which in turn slows down the compounding rate.

VTSAX (Vanguard’s Total Stock Market Index Fund) has an ER of 0.04%, but pays out dividends quarterly, so the investor can reinvest their money sooner and compounds more quickly.

In the end, VTSAX will have a slight edge and more growth over a longer period than FZROX.

Patricia M:

Both are great choices. I chose Fidelity because their website is said to be better.

Micheal P:

Fidelity set a new standard with Zero-fee index funds.

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