Just to add to what @tibbitts said; Portability means the ability to transfer Taxable account holdings from one brokerage to another without selling the assets, in the event you ever decided to leave Fidelity and move over to Vanguard, Schwab, etc. Fidelity has a few index funds that have ZERO in the name to promote that these funds have an expense ratio of 0.00%, which is impossible to beat (as long as they don't welch on that). Since ZERO funds, like Fidelity ZERO ® Total Market Index Fund (FZROZ), cannot be transferred in-kind, holding these in a Taxable account means they can not be "ported" to another brokerage without selling them to cash, which would typical incur a big long-term capital gains (LTCG) tax bill (thus the description "not portable").Can you explain this a little further? What does portability mean, and why do I need it? I read the Simple Guide to Wealth, and was trying to choose a fund similar to Vanguards total stock index fund. Did I choose the wrong thing? I’m not sure what a Zero fund is.
ZERO funds are just fine if either: a) you never plan to leave Fidelity, or b) you hold ZERO funds in a tax-advantaged account, since selling to cash just to move the cash to another brokerage in a Tax-Deferred/Tax-Free account is a non-taxable event (unlike selling to cash in a Taxable account).
Okay, this is really helpful. Thank you! So, fine to leave the Roth accounts in FZROZ, but I should move my Traditional IRA to something else, right? So now I need to find a total market index fund that Fidelity holds that is not a Zero fund…any suggestions?
Statistics: Posted by SooooMuchToLearn — Sat Aug 10, 2024 4:59 am