Following this chain of conversation closely because it mirrors a choice I've recently made but have yet to implement.Fidelity is waiving all fund expenses on their ZERO funds... you can't beat an ER of 0.00% (for as long as Fido is offering that... it's a gimmick to compete with Vanguard and they lose money on it, but likely offset that if they get any new clients that they can push towards their managed services).Is there a particular reason to go with FZROX (Fidelity ZERO Total Market Index) over FSKAX (Total Market Index) or FXAIX (Fidelity 500 Index Fund) for the Tax Deferred 401k/IRA?
I'm re-thinking Total Market in Taxable since I overlooked Wash Sales. Selling Total Market at a loss in taxable (see Tax Loss Harvesting) and inadvertently buying Total Market in any other account like the Roth/Trad IRAs/401Ks through automated reinvestment of distributions trips the Wash Sale Rule and the loss is disallowed on your tax return. If you were intentionally trying to harvest the loss to lower your tax bill, then the wash sale prevents that. Easily avoided if you simply hold a fund that is similar but not "substantially identical" (e.g., 500 in taxable and TSM in tax-advantaged is a good TLH pair). Update in red below...
For Taxable accounts:
FXAIX - Fidelity 500 Index
For Tax-Free Roth 401k/IRAs:
FZROX - Fidelity ZERO Total Market Index
FZILX - Fidelity ZERO International Index
For Tax-Deferred Trad 401k/IRAs:
FXNAX - Fidelity U.S. Bond Index
FZROX - Fidelity ZERO Total Market Index
FZILX - Fidelity ZERO International Index
FSKAX (Fidelity Total Stock Market) and FZROX (Fidelity ZERO Total Market Index) are both total market funds but they follow different indexes: Dow Jones and a proprietary index to Fidelity, respectively). They have a different number of holdings as well. Do those slight differences still fall within the range of "substantially identical"?
Statistics: Posted by bleeding_love — Wed Apr 24, 2024 2:56 am — Replies 7 — Views 762