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At the end of April, I decided to invest in Fidelity’s Zero Expense Ratio Index Mutual Funds, focusing on FZROX, FZILX, FNILX and FIZPX.
And I know some may be wondering if there has been any change in the past two months?
It’s important to note that May and June were heavy stock investing months, so I didn’t invest a whole lot into my Fidelity Zero Expense Ratio Index Mutual Funds but I have invested. Again, these are long-term buy-and-hold investments, so I will be compounding for a good number of years.
For those not familiar with mutual funds, unlike stocks where you can buy shares, you are adding dollars in to the account. Unlike a share of a stock or a unit for an ETF which you purchase after you bought it from a brokerage, a mutual fund is purchased and added to your account at the close of the market. And if you intend to sell it, you will have to wait at least two business days for it to process.
But nevertheless, it’s quite easy to start investing and the best part of these index funds, unlike other brokerages which require a $3,000 or $10,000 investment, there is no minimum to invest, no transaction fees and has a 0% expense ratio!
So, first let’s take a look at FZROX, a mutual fund which some tend to compare to VTI (Vanguard Total Stock Market) which is a total market cap index which includes mega, large, small and micro cap stocks and is market capweighted. FZROX is benchmarked to Fidelity U.S. Total Investable Market Universe Index and features 3,000 US Companies based on market cap and certain liquidity requirements. And also doesn’t include the smallest companies which VTI holds.
As of today, for FZROX, I invested $448.50 (30.052 unit shares) at $14.92 Cost Basis Per Share. And since then, have seen it go up to $17.60 to a current value of $466.10. The last price is now $15.51. So, the price per unit share is going up considering at one time, it was $10.76. I hCW
Originally, planned, I wanted FZROX to be my main focus, but now I may focus on FZROX, FZILX and FNILX.
FZILX is Fidelity’s Zero International Index. Some may compare this to VT (Vanguard Total World Stock) ETG which is an ETF and for those who want to have a diversified portfolio to include international companies. The fund has a 16.53% stake in companies in Japan, 9.04% in the UK, 8.57% in China, 6.87% in Canada, 6.28% in France, 5.41% in Germany, 5.28% in Switzerland and many more countries. With a regional diversification of 39.82% in Europe, 28.58% in emerging markets and 16.53% in Japan.
For FZILX, I invested $377 at $12.42 a share (30.356 shares) and the current value is now $381.57. The last price was at $12.57 and the price per unit share has gone up from $9.32 to its present price.
FNILX is Fidelity’s Zero Large Cap Index Fund which holds 500 of the largest domestic companies and is similar to the S&P 500. Similar to FZROX, it’s a mutual fund which some tend to compare with SPY (SPDR S&P 500 ETF) which is used as a proxy for US large cap stocks. Surprisingly, FNILX has Tesla (TSLA), SPY does not.
But of the four, while FZROX is my best performer, FNILX is not far behind.
For FNILX, I invested $251.30 (17 share units) at $15.32 and the current value is $260.51. The last closing price was $15.32 and it has gone up since it was $10.84 not long ago.
My least performing of the four is FZIPX, which is the Fidelity Zero Extend Market Index Fund which is comparable to VXF (Vanguard Extended Market Index Fund ETF) which has holdings in information technology, industrials, financials and healthcare. It’s biggest holding being Square, Uber, Zoom and Blackstone. FZIPX is weighted in industrials (16.58%), financials (16.33%), consumer discretionary (14.27%), healthcare (13.13%) and information technology (12.74%).
FZIPX’s top 10 holdings (out of 2119 holdings) are American Airlines, L Brands, Hunt JB Transport, Dentsply Sirona, Airbnb, Whirlpool, Williams-Sonoma, Westrock, Snowflake and Molina Healthcare.
For FZIPX, I invested $145.20 at $13.49 a share (10.75 share units) and the current value is $149.88. The last closing price was $12.57 and has gone up from $8.61.
So, currently I have invested $1,258.06 to my Fidelity Zero Expense Ratio Index Mutual Funds (FZROX, FZILX, FNILX, FZIPX) and on May 31st, the investment rate of return was +5.57%.
While, ideally, I want to have put in enough money to acquire 100 share units for each of the four by July, there were times I had planned to, but instead diverted the money towards maxing my Roth IRA by June 2021 So, right now the goal is to get them each at 50 share units by the end of summer.
It’s important to note that I do not hold these in my Roth IRA. My non-taxable account, is pretty much VTI, so technically I don’t have to own these mutual funds, which I have in my taxable account. And really, I don’t need FNILX, because I have FZROX. It may seem redundant, I look at it as two different types of investments. I look at my Roth IRA and my 401K as my retirement account, to never ever touch until retirement time. People end up doing that if they lose their job or they need money. I’m not that type of person. I will not tap into my retirement account unless I’m truly desperate and I need to.
I look at my Mutual Fund Account as another emergency account. Laundry machine conks out? Wife or son needs some work on their car? No problem. I can tap into this other emergency account. Sure, I’ll have to pay taxes on dividend earnings and capital gains for it being in a taxable account. But if you max out your tax-sheltered options, saving additional assets in a taxable account is a necessity.
But going back to this mutual fund acount, so far, for two months, the growth is there, but of course, it’s way too early to tell with only two months, so we’ll see how things go in six months around late October 2021 or a year later by late April 2022.
