Yes, but if you have $10k, you can buy VFIAX for .05 (Admiral shares are always cheaper than investor shares).
I get it. If you like to be able to walk into a local office, that is fine. Just remember that Fidelity is owned by the Johnson's who are billionaires (worth about $22B) and Vanguard is owned by its investors.
Hidden Johnson billionaires found in Fidelity fund empire
Just look at the fund flows from Morningstar.
Active funds 1 year flows
Vanguard +$30.3 billion
Fidelity -$40 billion decline
Passive funds 1 year flows
Vanguard +$223.1 billion
Fidelity +$25.4 billion
http://corporate.morningstar.com/US/...owsSep2016.pdf
Somebody mentioned Paul Merriman and he is great.
The Ultimate Buy and Hold Strategy 2016 - Paul Merriman | Paul Merriman - how to add value, small cap, reits, EM
Vanguard | Paul Merriman -- Vanguard sample allocations
Fidelity vs. Vanguard: Which is best? by Paul Merriman
Many investors think the choice between having their money at Fidelity Investments or at Vanguard is a tossup. It's not.
Even though Fidelity is a great company with many successful funds, in my estimation, Vanguard is clearly better for investors who are building a portfolio of basic asset class funds.
There's nothing wrong with Fidelity, and for many years I have been helping investors with Fidelity-sponsored 401(k) plans choose the best available funds. Many investors are wedded to Fidelity, T. Rowe Price or other fund families through their 401(k) or similar retirement plans. These people deserve guidance on the best ways to use their plan options.
But if you have a choice, you should look "under the hood" for some details about Fidelity and Vanguard. Every time I do that, I find that Vanguard comes out on top. If your goal is to make your retirement money do the most that it can for you and your family without taking any more risk than you need to, then you should look under the hood too.
Let's start by noting a fundamental difference between these two companies. Vanguard is actually owned by the shareholders of its mutual funds. If the company is profitable (and it is), those profits go to the people who own Vanguard funds, not to outside investors.
This is an unusual business model, similar in some ways to that of credit unions and other cooperatives that ultimately operate for the benefit of their customer-members. Fidelity, on the other hand, is owned by the company's employees and by a series of family trusts.
This brings us to the topic of fees and expenses paid by investors. Vanguard has no incentive to charge any more than necessary to keep the company healthy. But the owners of Fidelity do better when the company charges more to investors. So Fidelity's incentive is to charge what the traffic will bear.
And as most investors know, higher charges mean lower returns. Two funds can have identical portfolios, but if one of them levies higher charges, its investors will have lower returns. There's just no way to get around that equation.
Following this obvious logic further, two investors can save the same amounts of money at the same times — and even retire on the same date. But if one of them achieves lower returns, he or she will have less money to support a retirement income and less money for potential bequests to family members and charities.
Now we are ready to talk about returns. So let's look at the facts. The Hulbert Financial Digest for many years has calculated the results of my portfolio recommendations.
For the 10 years ended Dec. 31, 2012, my moderate (60% equity) portfolio at Fidelity returned 7.8%; in that same period my moderate Vanguard portfolio returned 9.1%. The difference might not seem very important. But it is.
On a one-time investment of $10,000, the Fidelity portfolio (with all earnings reinvested) produced $21,193 versus $23,892 at Vanguard. That difference, $2,789, represents nearly 28% of the entire initial investment.
And that is only for 10 years. If you continued the calculation out for 10 more years, the difference would be worth more than 120% of the entire initial investment.
In other words, little things can mean a lot.
My all-equity recommendations over the same period, according to Hulbert Financial Digest, produced returns of 8.7% at Fidelity and 10.3% at Vanguard.
These numbers tell you more than you might think. An all-equity portfolio is always much riskier than one with 40% in bonds. Yet Fidelity investors who took all that extra risk did not even match the returns of the much less volatile Vanguard moderate portfolio.
These portfolios were (and are) based on my belief in wide diversification in equity asset classes that have historically produced the most return per unit of risk. That means international stocks as well as U.S. stocks, small-cap stocks as well as large-cap stocks, value stocks as well as growth stocks. It also means real-estate stocks and emerging markets stocks.
Whenever possible I recommend low-cost index funds for each of these asset classes.
When Fidelity does not have an index fund in an important asset class, I choose the best fund available.
Why did (and does) Vanguard do so much better? The answers are pretty simple. Vanguard has lower expenses, lower turnover and more index funds. That means higher returns.
Fidelity rightly brags about its huge pool of talented analysts and fund managers, and there's no doubt they work very hard. But savvy investors want results. And they will find more of what they want, in my opinion, at Vanguard than at Fidelity.
The lesson here isn’t really about whether to use Vanguard or Fidelity. The important lesson is never forget the potential damage high expenses, turnover and active management missteps can cost you in the long run.
For the record, I have no financial relationship with either Fidelity or Vanguard (or any other fund company for that matter). I'm interested only in what should motivate serious investors: Results.
Further reading: Check out the relevant discussion in my book "101 Investment Decisions Guaranteed to Change Your Financial Future," available for free downloads.