TSP Center

Dear all,

It's been a while since I've been posting. I have lurked in the background, but it's been quite hectic at work.

I am looking at some info from the new "free" Fidelity index funds. While I'm still under 40, I intend to be more risky with my investments so I'm looking at the different options for pain and gain.

I have noted that they will begin a new "extended" index fund (https://www.fidelity.com/bin-public/060 ... dology.pdf) name being FZIPX (see https://www.fidelity.com/mutual-funds/i ... ndex-funds). I'm trying to see how that will compete with FSEVX (I know, FSEVX has an expense). FSEVX uses the DWCPF and the FZIPX fund uses a new proprietary method which is comparable to the Russell total completion index (see this for additional comparison tools https://www.bogleheads.org/wiki/US_comp ... ite_note-8). I am not a lover of anything Russell because I think that index formulation is pretty bad compared to anything else. Yet, the deal is quite attractive. I would be curious to see what others are thinking. Right now I'm leaning towards FSEVX...but your minds are better than mine.

Best,

Me

Is there a time requirement to remain invested in those Fidelity funds? That has kept me away from their offerings in the past.

crondanet5 wrote:Is there a time requirement to remain invested in those Fidelity funds? That has kept me away from their offerings in the past.

I haven't checked on the policy with the free funds. I know that the other funds were 30 days.

Edit: I checked. This was in the prospectus:

Excessive Trading Policy

The Board of Trustees has adopted policies designed to discourage excessive trading of fund shares. Excessive trading activity in a fund is measured by the number of roundtrip transactions in a shareholder's account and each class of a multiple class fund is treated separately. A roundtrip transaction occurs when a shareholder sells fund shares (including exchanges) within 30 days of the purchase date.

Shareholders with two or more roundtrip transactions in a single fund within a rolling 90-day period will be blocked from making additional purchases or exchange purchases of the fund for 85 days. Shareholders with four or more roundtrip transactions across all Fidelity® funds within any rolling 12-month period will be blocked for at least 85 days from additional purchases or exchange purchases across all Fidelity® funds. Any roundtrip within 12 months of the expiration of a multi-fund block will initiate another multi-fund block. Repeat offenders may be subject to long-term or permanent blocks on purchase or exchange purchase transactions in any account under the shareholder's control at any time. In addition to enforcing these roundtrip limitations, the fund may in its discretion restrict, reject, or cancel any purchases or exchanges that, in the Adviser's opinion, may be disruptive to the management of the fund or otherwise not be in the fund's interests.

Good research (crondanet5) on Round Trip as Fidelity sees it...

Right now, the top Fidelity Sector Fund (YTD), is the Fidelity® Select Medical Technology and Devices Portfolio (FSMEX) which is chimin' in @ 32.80%.

https://fundresearch.fidelity.com/mutua ... erm/SECTOR

The likelihood, of this fund finishing the year @ 50% or over is highly probable based on the performance it already has achieved this year. By apprised, that there are approximately 72 TRADING days left in the calendar year. That would give you a return of 18% if you were opt in. Conversely, Fidelity® Extended Market Index Fund - Premium Class (FSEVX) has earned 12.72% YTD. The fund has returned 12.60 percent over the past five years and 10.82 percent over the past decade.

On a similar, but different note: Remember, to MAXIMIZE your Roth IRA @ all times, it's currently the only U.S. Investment Vehicle that is "void of taxation" when money is withdrawn in your retirement year's.

Best wishes in all your endeavors!!!

wingchaser wrote: On a similar, but different note: Remember, to MAXIMIZE your Roth IRA @ all times, it's currently the only U.S. Investment Vehicle that is "void of taxation" when money is withdrawn in your retirement year's.

Roth TSP/401k?

It's probably best described in Mike Causey's (Federal News Radio) article, "Roth TSP is NOT a Roth IRA!"

https://federalnewsradio.com/federal-re ... -roth-ira/

I run a Traditional TSP Account as a Federal Servant & have a ROTH IRA with Fidelity Investments (on the side). The big advantage with my ROTH IRA is that I'm not limited in any of my investment choices.

Best wishes in all your investment endeavors!!!

That article was mostly useless. Mjedlin66was makin* the point that a Roth TSP or a Roth 401K account are as you said “void of taxation” in retirement years as you suggested. While the article makes the claim that a Roth TSP is not the same as the Roth IRA, it is really a misleading title. It makes one think that they don’t work the same at all, when really they work exactly the same. Roth means Roth in either case. You put after tax dollars in and pay no tax on withdrawal in retirement.

Cswift, here are one mutual fund and two ETFs that you might want to research: FSRPX, FDIS, PXSG.

wingchaser wrote:It's probably best described in Mike Causey's (Federal News Radio) article, "Roth TSP is NOT a Roth IRA!"

https://federalnewsradio.com/federal-re ... -roth-ira/

I run a Traditional TSP Account as a Federal Servant & have a ROTH IRA with Fidelity Investments (on the side). The big advantage with my ROTH IRA is that I'm not limited in any of my investment choices.

Best wishes in all your investment endeavors!!!

I read the article. It is a garbled mess that goes nowhere.

There are differences between the Roth IRA and the Roth TSP-

1. The Roth IRA allows you to withdraw your contributions tax and penalty free at any time. The Roth TSP does not.
2. The Roth IRA is an IRA account with a $5500 contribution limit. The Roth TSP is a TSP account with an $18,500 contribution limit.

That's it. Unless you can point me to some other detail that I am not aware of, the terms for withdrawing "qualified Roth earnings" are the same... You have to be 59.5 or older, and your first Roth contribution must be at least 5 years old.

But yes, the Roth TSP in retirement can absolutely give you money "void of taxation".

This is my one-page flyer on the subject-
https://tspcalc.com/TSP_vs_IRA_2018.pdf

cswift01, I use the following Fidelity free-funds to replicate the TSP:

C: IVV
S: IJR
I: IEFA
F: AGG

To be in "G," you simply sell your position(s) and automatically go to their "core fund."

One small note about Fidelity's free funds: they charge you a transaction fee of $5 if you are in the fund for less than 30 days. Not a big deal, but good to know.

Also, some of their flagship index funds require a minimum 10k investment.

Thanks for all your responses. I was hoping to discuss the methodology of these new "free" index funds, but I can't help feel like they are simply a replacement for the Russel indexes. Those, to my knowledge, are hopeless funds.

Just to respond to a few:

Topnotch:

Cswift, here are one mutual fund and two ETFs that you might want to research: FSRPX, FDIS, PXSG.

-My reply:

Yes, I like those funds, particularly PXSG, however, I have developed a new strategy (which I hope will stick this time). I have about 25 to 30 years of investing on my horizon, so I'm planning to go mostly small cap. Right now I'm favoring XSLV, SLYV, PSCH, IJR, FSEVX and FSMEX. If you use this website https://www.portfoliovisualizer.com/bac ... sisResults you will find those funds well worth it.

nrialto:

cswift01, I use the following Fidelity free-funds to replicate the TSP:

C: IVV
S: IJR
I: IEFA
F: AGG

My reply:

-Thanks! I had been looking at a few of those funds. For S, I'm choosing FSEVX. That one replicates the same index and is one of the few Fidelity index funds that consistently beats its benchmark. I also like IJR, however, as you see from my top post, so good choice either way.