2019: Can I buy Fidelity or Vanguard no fee no load index, target retirement, U.S. stock funds on Firstrade?

Overview of Firstrade’s Free Mutual Fund Trading

If you just opened your Firstrade account or are considering opening one soon, you may be wondering what mutual funds are available to buy on their platform. You’ll be glad to hear that Firstrade offers more than 9,000 different mutual funds to choose from, many of which are from the well-known and highly respected Vanguard and Fidelity fund groups. This article will provide an overview of how to browse and filter through Firstrade’s selection of Vanguard and Fidelity mutual funds and what it will cost you to trade them.

Can You Buy Vanguard Funds on Firstrade Account?

Firstrade currently offers 164 Vanguard mutual funds that are open to new investors, which you can find via their user-friendly mutual fund screener below by filtering by fund family and availability. All mutual funds are commission-free on Firstrade, and all the Vanguard mutual funds they offer are no-load funds, meaning you won’t have to pay a sales commission upon purchasing shares. The expense ratios on these Vanguard funds are also on the low side, ranging from just 0.05% to 0.57% per year.


Firstrade Vanguard Mutual Funds


Firstrade’s offering of Vanguard mutual funds span almost every asset class you would want to include in a well-diversified portfolio, including US, global and emerging equities in addition to bonds. For example, their Vanguard Total Intl Stock Index Admiral Fund (VTIAX) is a global large-cap strategy that invests in mostly large-cap companies from international developed markets, and it comes with a four star rating from Morningstar. This fund has a low expense ratio of just 0.11% and impressive AUM over $300billion, a testament to its popularity among investors.

Another example is the Vanguard Limited-Term Tax-Exempt Fund (VMLTX), which invests in mostly shorter term U.S. municipal bonds. This would be a great addition to a diversified portfolio because of its regular coupon payments and tax advantages, among other qualities. This fund, while not as big as VTIAX, still boasts an impressive $27billion in AUM and a low expense ratio of 0.17%. We should also note that Firstrade’s selection of Vanguard mutual funds also includes a number of complete asset allocation vehicles, such as target date funds, which is an efficient way to own a diversified portfolio through a single fund.

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Can You Buy Fidelity Funds on Firstrade Account?

Adjusting our mutual fund screen that we setup earlier, you can see that Firstrade has an even larger selection of Fidelity mutual funds to choose from that are currently open to new investors – 629 to be exact. While Firstrade won’t charge you any commissions, about half of the Firstrade funds have a load fee, which is an upfront purchase premium (usually between 3-5% of your investment) that you are charged when buying into the fund. It’s important to pay attention to load fees because these can eat into your returns quite a bit and are in addition to a fund’s annual expense ratio, which is on average higher on Fidelity mutual funds when compared to Vanguard.


Firstrade Fidelity Mutual Funds


Similar to Firstrade’s selection of Vanguard funds, their universe of Fidelity mutual funds spans every asset class you would need to create a diversified portfolio, from small and large cap developed and emerging stocks to corporate and municipal bonds. You can even find Fidelity funds that focus on specific sectors, countries, and commodities if you are looking to make a bet in a more targeted market. One such example of a targeted fund is the Fidelity Advisor® California Municipal Income Fund (FCMAX), which invests specifically in longer-term municipal bonds issued by the state of California.

One of the most popular Fidelity funds (based on AUM) is the Fidelity Balanced Fund (FBALX), which has more than $30billion in AUM, a five star rating from Morningstar, an expense ratio of 0.53% and no load. This is an asset allocation fund, which aims to invest between 50% and 70% of its assets in equities, with the remainder mostly in fixed income, in order to offer investors a less risky vehicle that they safely be used as the cornerstone of their portfolio. The fund has a strong performance record as well when considering its more balanced asset mix; its 15-year annualized return is currently 7.5%.

Summary

It’s important to research a mutual fund’s strategy carefully and evaluate its performance relative to its benchmark and to the returns of other mutual funds with similar strategies. You should then consider the expense ratio and if there are any load fees/purchase premiums. In many cases, people go with Vanguard mutual funds (hence they have one of the largest AUMs of any fund family) because they generally have the lowest expense ratios, no load fees, and often a decent performance track record as well. However, there are some cases where paying a higher expense ratio or load fee can be justified by superior active management as demonstrated by years of strong performance.

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