As of 4/23/2011, Fidelity now makes 30 iShares ETFs commission free. This plan is intended to be updated for the Fidelity Commission ETFs offered.
Fidelity now makes trading 25 iShares ETFs for free. These ETFs cover complete US equity sizes and styles (large/mid/small caps and growth/blend/value styles). It covers international equity markets well too. In additon, it has good fixed income ETFs. The missing major asset classes are REITs and commodities. We hope those will be made free too. A plan called Fidelity Commission Efficent ETFs extends this plan by including several addtional ETFs (which cost $7.95 flat commission per trade).
Investment options of carefree- Fidelity Commission Free ETFs
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Investment model portfolios
We provide two types of investment model portfolios for carefree- Fidelity Commission Free ETFs participants. You can customize and follow a model portfolio in your plan account.
Types of portfolio strategies
- Strategic asset allocation portfolio: It invests in a diversified portfolio of multiple assets, buy-and-hold without frequently changing the asset allocation weights.
- Suitable: For long-term (more than 15 years, preferably more than 20 years), want to be tax efficient and can withstand interim drawdown or loss as high as 50% or more.
- Pros:
- Less error-prone
- Infrequent rebalancing or transactions
- Tax efficient for taxable brokerage investments
- Cons:
- Interim loss or drawdown can be substantial
- Possible low returns for an extended period, such as 10 years or longer
- Tactical asset allocation portfolio: it invests in a diversified portfolio of multiple assets, dynamically adjust stock and bond allocations to minimize losses during market stress.
- Suitable: For long-term (more than 10 years or preferably longer) capital. Investors are willing to rebalance as frequent as monthly.
- Pros:
- Reduce large interim loss or drawdown
- Less sensitive to investment entry point
- Likely to improve returns
- Cons
- Demand more frequent rebalancing or transactions
- Less tax efficient — more suitable in a tax-deferred account such as 401(k) or IRA
- Can experience a period of lower returns compared to a broad-based strategic allocation or a buy-and-hold benchmark, especially in some bull markets
These portfolios are proactively monitored and rebalanced on a monthly basis when needed, ensuring it remains in line with its target allocation.
Let us know (Email us) if you need help to create a custom model portfolio for your plan.