Holding Vanguard Funds in a Fidelity Account

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Maddy
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Holding Vanguard Funds in a Fidelity Account

Post by Maddy » Thu Jan 12, 2023 10:43 am

As a novice investor, I recently made the switch from Vanguard to Fidelity. A number of funds consisting of Vanguard ETFs and Vanguard mutual funds came over to Fidelity in-kind. These include VTSAX (total stock market), VTI (total international), VBR (small cap value), and VGIT (intermediate treasury). Is there any reason that I should be looking to replace these Vanguard funds with the Fidelity equivalents? I recall hearing, many years ago, that Vanguard's funds offered an extra layer of protection because of how they were structured (something about the funds being legally organized as independent entities). Would that consideration continue to pertain when Vanguard funds are held inside a different brokerage? Any other considerations that would cause you to trade these particular Vanguard funds for the Fidelity equivalents?

Thanks in advance for your thoughts on this.
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Re: Holding Vanguard Funds in a Fidelity Account

Post by DogBreath » Thu Jan 12, 2023 11:00 am

It's too late now, but you will probably incur a hefty fee to sell those Vanguard mutual funds at Fidelity (that does not apply to ETFs, which trade commission-free like stocks). OTOH, if you have a large paper gain on said funds, liquidating them prior to the transfer might have had unpleasant tax ramifications. Choose your poison.

Equivalent Fidelity funds are generally available at similar or slightly higher ER and most people would consider them as safe as Vanguard's.
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Xan
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Re: Holding Vanguard Funds in a Fidelity Account

Post by Xan » Thu Jan 12, 2023 11:24 am

Couldn't you move those mutual fund holdings back to Vanguard to sell them?
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Re: Holding Vanguard Funds in a Fidelity Account

Post by DogBreath » Thu Jan 12, 2023 12:30 pm

Xan wrote:
Thu Jan 12, 2023 11:24 am
Couldn't you move those mutual fund holdings back to Vanguard to sell them?
You could. IIRC, Vg was at one point allowing free conversion from MF to ETF with no tax consequence. If that is still an option, the best solution would have been to make that conversion prior to moving to Fido.
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Re: Holding Vanguard Funds in a Fidelity Account

Post by Maddy » Thu Jan 12, 2023 1:18 pm

. . .
Last edited by Maddy on Fri Jan 13, 2023 6:55 am, edited 1 time in total.
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Re: Holding Vanguard Funds in a Fidelity Account

Post by Maddy » Thu Jan 12, 2023 1:47 pm

Well, it turns out that Fidelity does not have a fee to sell either of the mutual funds I transferred over (VTSAX and VWIAX [Wellesley-- forgot about that one]. They said that the fee pertains only to Vanguard mutual funds purchased through Fidelity. So this is very good news.

Now I simply need to determine whether I want to convert to Fidelity funds. With all the positive talk about Wellesley that I've heard on this forum over the years, I'm inclined to keep at least that one Vanguard fund.
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Re: Holding Vanguard Funds in a Fidelity Account

Post by Xan » Thu Jan 12, 2023 2:35 pm

Maddy wrote:
Thu Jan 12, 2023 1:47 pm
Well, it turns out that Fidelity does not have a fee to sell either of the mutual funds I transferred over (VTSAX and VWIAX [Wellesley-- forgot about that one]. They said that the fee pertains only to Vanguard mutual funds purchased through Fidelity. So this is very good news.

Now I simply need to determine whether I want to convert to Fidelity funds. With all the positive talk about Wellesley that I've heard on this forum over the years, I'm inclined to keep at least that one Vanguard fund.

You might consider the possibility that Fidelity's policy of not charging a fee to sell those funds could change.
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