"You mentioned that I could buy Benham and other mutual funds through Fidelity. When I look in the paper, I don't see Benham or any other mutual funds (other than Fidelity) listed under Fidelity funds. How in the world can I buy Benham funds through Fidelity?" - P.G., Melbourne, Fla.
Good question, and I have a great answer. I have written extensively about the mutual fund portfolio management programs offered by Charles Schwab, Jack White and Waterhouse Securities. All three are great deals. I highly advise all of you to investigate the benefits of one-stop, no-load mutual fund shopping through a discount broker.CONSOLIDATE YOUR HOLDINGS. These no-load mutual fund portfolio management programs give you the ability to conduct all your no-load mutual fund transactions from multiple fund families in one centralized account. The delays and inefficiencies of dealing with several fund families are eliminated by consolidating all your holdings at a discount broker.
The best part is that this service is absolutely free for many mutual funds. That's right. It doesn't cost you a dime. How so? The mutual funds themselves pay the discount broker a commission for placing your money with them. A commission is paid, but in this case, the commission is paid by the mutual fund company and not you.
FIDELITY IS A DISCOUNT BROKER, TOO. Most people think of mutual funds when you mention Fidelity, but Fidelity has a large discount brokerage division. You can buy stocks, bonds, CDs and all other securities, including no-load mutual funds, through Fidelity's discount brokerage.
Fidelity calls its new program Funds Network, and it offers more than 200 different no-load funds from 10 different fund families at no transaction fee. Included in the program are such fine fund families as Benham, Berger, Dreyfus, Evergreen, Founders, Janus, Neuberger & Berman, SteinRoe, Strong and, of course, Fidelity funds themselves.
Don't overlook the hundreds of other mutual funds from almost all other no-load fund families that you can buy for a very small transaction fee. While not free like the above 10 fund families, the transaction fees aren't much more than free. For example, a $25,000 purchase of say, a Blanchard fund, would cost $89.50. A small price for the efficiency and ease a mutual fund portfolio management service offers.
NO TRANSACTION FEES. Again, this service is absolutely free to you, the consumer, for selected fund families. You can buy and sell funds from the above 10 fund families in one consolidated account at no charge whatsoever. There's no more waiting for prospectuses, no more postal delays, no more cumbersome statements and tax form 1099s, andplus you get instantaneous trade execution. All your mutual fund holdings are centralized in one simple account, and you only have to deal with one firm despite investing in multiple fund families.
A great advantage that Fidelity has over its competition of Schwab, White and Waterhouse is that only through the Fidelity program can you buy Fidelity mutual funds on a no-transaction-fee basis. Please note that I said no transaction fees - there still may be a
sales load on some Fidelity funds. But there is a way around that, too.
FIDELITY WAIVES SALES LOADS, TOO. Fidelity has given retirement account investors an extra bonus. Fidelity has waived sales loads on all of its funds except Magellan, New Millennium and the Select funds, for purchases within a retirement account such as IRAs, 401 , profit-sharing plans and the like. So not only can you buy most Fidelity funds at no load in your retirement account, you can also buy them without paying a transaction fee in a Funds Network account.
The sales loads on Fidelity funds are not waived if you buy Fidelity funds through other discount brokers like Schwab, White and Water-house. Fidelity is giving you lots of incentive to use its mutual fund portfolio management service over the other discount brokers. Those of you who are zealous Fidelity fund buyers will find the Fidelity Funds Network your best alternative over the rest of the competition. Those of you who shop for the best funds, no matter who the fund distributor is, should investigate the other three discount brokers' mutual fund portfolio management services as well.
Each discount broker has a slightly different menu of no-transaction-fee funds. You should request the no-transaction-fee list from each discount broker to determine which firm has the best funds for your objectives and needs.
FREE IRAS, TOO. Fidelity does charge an annual $20 IRA custodial fee, but it gives you two ways to avoid it. If you have two or more commissionable trades during the year or have a minimum $5,000 balance in a Fidelity fund, you pay no IRA custodial fee.
Gee, no transaction fees on 200 no-load funds and free IRAs for qualified investors sounds like a pretty good deal to me. What do you think?
For more information, call Fidelity Brokerage at 800-544-8666, Charles Schwab at 800-526-8600, Jack White at 800-233-3411 or Waterhouse Securities at 800-934-4478.