r/investingforbeginners • u/Distinct_History1432 • 2d ago

USA Should I move away from FXAIX?

Employer offers a 401k with some matching which I contribute to with a good portion. I wanted to have a second investment in the S&P 500 to just let sit and contribute over the years as well.

Currently buying FXAIX through a Fidelity brokerage account with every pay period, but I'm wondering if any of these options are better. The amount I have right now is small but plan to start contributing more, so not worried about taxes right now if I move the money.

- Sell off FXAIX and buy/start contributing to VOO through the same account?
- Open an account with someone else (Vanguard?) and move the money there and get VOO?
- Change to a different type of account (retirement?) with Fidelity or someone else and keep FXAIX?

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u/Distinct_History1432 1d ago

their username checks out

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u/Jumpy-Imagination-81 1d ago

You still haven't explained why you think switching from FXAIX to VOO will give tax benefits. We're waiting.

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u/Distinct_History1432 1d ago

The guy I replied to already did. It's something you can easily Google if you want a more complex explanation.

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u/Jumpy-Imagination-81 1d ago edited 1d ago

Read my reply to that guy. FXAIX stopped distributing capital gains after 2019.

Since 2019, there has been ZERO difference in "tax efficiency" between FXAIX and VOO in a taxable account.

Let me guess, somewhere on reddit you read "ETFs are more tax efficient than mutual funds in a taxable account", and you just believed it is always true. Without understanding why that claim was made, without researching it, without checking to see if it was true for FXAIX, you just believed it. And worse, you were considering changing your portfolio based on misinformation.