[JOE]

My husband (38) and I (37) currently have approx $485k between our 2 Roths. 64% is in FCNTX (0.55% expense ratio), 33% is in FTRNX (0.58% exp ratio) and 3% in FSENX (0.77% exp ratio).

We would like to move everything to FZROX. Is there a best time to do this? Wait until capital gains/dividends pay out and are reinvested? Does it matter how long I’ve held any of the funds?Any other considerations that I might be missing?

[Jason]

Since this is a qualified account, the only “gotcha” I can think of is holding the same securities in a non-qualified account.

If you were selling FZROX in a NQ account for a loss, then turn around and buy it in your Roth IRA, that’s a wash sale. I’d avoid buying Fidelity’s ZERO funds in a NQ account anyway because they are propriety to Fidelity – if you ever wanted to move the account, you would be forced to sell those funds.

But in a Roth IRA, that doesn’t matter since trades don’t trigger any tax consequences. Dividend and cap gains payout dates don’t matter because that’s baked into the price per share.

If FZROX meets your investment plan for the Roth IRA, good to go.

[Maya]

I don’t think there is anything to time with the sale of the assets. The only thing I would caution is to buy the FZROX as soon as the funds are available from the sale of the other mutual funds and not delay as the market is very volatile these days and you don’t want to find yourself selling when the market is down and buying when it is up.

Just to reiterate the Roth account is the place where the funds are held. You are not going to be moving the money from one account to another; just selling 1 security and buying another within the same holding account.

[Author]

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