Fidelity Managed FidFolios: Fidelity direct indexing fees, FidFolios minimum and what Fidelity FidFolios actually harvests.
Every strategy and its published fee, what the $5,000 figure really refers to, and the sentence in Fidelity's own tax loss harvesting language that most comparisons skip. Then a tool for testing the construction yourself.
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In short
Fidelity Managed FidFolios is Fidelity's direct indexing account: it buys the individual stocks behind a strategy in fractional shares and manages them for you. Index-tracking strategies cost 0.40% a year ($20 per $5,000 invested) and actively managed ones cost 0.70%. Fidelity says there is no minimum to open the account, but your balance must reach $5,000 before it gets invested. The detail buyers most often miss is the tax language: Fidelity applies tax loss harvesting "on a limited basis, at the discretion of the portfolio manager," which is a weaker commitment than Wealthfront or Frec make at a lower price. Personalization is capped at excluding five stocks or two industries.
Last updated August 2026
FidFolios fees
Every Managed FidFolios strategy and what it costs
The fee is not one number, it is two, and which one you pay depends on the strategy you pick rather than on your balance. Five of the eight are direct indexing at 0.40%. Three are actively managed at 0.70%.
| Strategy | Type | Annual fee | Notes |
|---|---|---|---|
| U.S. Large Cap Index | Direct indexing | 0.40% | Tracks a US large cap index by holding the underlying stocks. |
| U.S. Total Market Index | Direct indexing | 0.40% | Broadest US equity option in the program. |
| International Index | Direct indexing | 0.40% | The only non-US option, and it is index tracking. |
| U.S. Low Volatility Index | Direct indexing | 0.40% | A factor tilt rather than a plain market index. |
| Environmental Focus | Direct indexing | 0.40% | Screened strategy priced at the index rate. |
| U.S. Large Cap | Actively managed | 0.70% | A manager picks the holdings. Not index tracking. |
| Dividend Income | Actively managed | 0.70% | Income tilt, actively selected. |
| International | Actively managed | 0.70% | Active counterpart to the International Index strategy. |
Fidelity quotes these in dollars as well as percentages, which is unusually plain: 0.40% is "$20 per year for every $5,000 you have invested" and 0.70% is "$35 per year for every $5,000 you have invested." Scaling those up is the part worth doing before you decide. At $25,000 the index strategies cost $100 a year. At $100,000 they cost $400. At $250,000 they cost $1,000, and at that point the fee is no longer a rounding error against whatever tax benefit you are hoping to capture.
Notice which strategies are missing. There is no S&P 500 strategy by name, no small cap, no sector strategies and exactly one non-US option. Compared with Frec's 25 indices this is a short menu, and it is short in a specific direction: FidFolios covers the broad US market well and almost nothing else. If you came looking to direct-index a particular index rather than the US large cap market in general, check the list above before assuming it is there.
Does FidFolios do tax loss harvesting
What Fidelity actually promises about tax loss harvesting
This is the most decision-relevant sentence on Fidelity's product page, and it is the one comparison articles paraphrase away. Fidelity's own words:
"Tax-smart investing strategies, including tax-loss harvesting, are applied in managing certain taxable accounts on a limited basis, at the discretion of the portfolio manager."
fidelity.com, Managed FidFolios product page, August 2026
Three qualifiers are doing a lot of work there. "Certain taxable accounts" means not necessarily yours. "On a limited basis" means not continuously. "At the discretion of the portfolio manager" means it is a judgment call rather than a rule the system executes. Put together, that is a materially weaker commitment than the language competitors use, and the difference matters because tax loss harvesting is the entire economic argument for paying a direct indexing fee instead of buying an index fund for 0.03%.
Compare it with Frec, which quantifies the outcome on its pricing page: the Classic direct indexing strategy is marketed as able to "harvest up to 40% of your portfolio in losses," and the Long Short product as "up to 337%." Whatever you make of those ceilings, they are commitments about a systematic process. Wealthfront publishes an entire whitepaper backtesting its harvesting yield. Fidelity publishes a discretionary caveat. That is not a small difference in emphasis, it is a different product promise, and it is why the honest answer to "does FidFolios harvest losses" is "sometimes, if the manager decides to."
None of this makes FidFolios a bad account. It makes it a managed portfolio of individual stocks that sometimes harvests losses, which is a reasonable thing to buy if that is what you want. It is only a bad deal if you bought it expecting the Wealthfront or Frec tax engine at four times the price. For what the tax benefit is realistically worth in dollars once you do get it, we walk through the published research on direct indexing tax loss harvesting, where providers market 1% to 2% a year and Wealthfront's own numbers come to 0.18% to 0.44%.
FidFolios minimum
The minimum is not what most articles say it is
What Fidelity says
"There is no minimum required to open an account; however, in order for us to invest your money according to the investment strategy you've chosen, your account balance must be at least $5,000." So the $5,000 is an investment threshold, not a gate on opening the account.
Why it matters
You can open and fund gradually, but nothing is invested until you cross the line. Money sitting below $5,000 is not tracking the strategy, so the practical minimum for the product to do anything is still $5,000. Treat the distinction as an onboarding convenience rather than a lower entry point.
Even so, $5,000 is genuinely the most accessible entry into brokerage direct indexing. Schwab Personalized Indexing asks $100,000. Wealthfront's flagship US Direct Indexing asks $100,000, though its narrower S&P 500 Direct product also starts at $5,000. Frec starts at $20,000. Vanguard Personalized Indexing is advisor-distributed and publishes no minimum at all. On access alone, Fidelity wins the low end of the market, which is exactly why so many people searching for direct indexing land on FidFolios first.
Fractional shares are what make the low minimum work. Fidelity says it uses them "which means you can own hundreds of stocks for as low as $5,000." Hundreds is the honest word there. A $5,000 account tracking a large cap index holds a sampled version of it, not every constituent, and sampling introduces tracking difference that no pricing page discloses. Testing how a 50, 100 or 300 name construction actually behaved against the full index is the sort of question you can answer in advance rather than discover in year three.
Can I exclude stocks from FidFolios
Personalization stops at five stocks or two industries
Fidelity publishes a hard limit that is easy to miss: "You may exclude up to five individual stocks or two industries in your account." That is the whole personalization story. There is no weighting control, no ability to add a name that is not in the strategy, and no way to tilt the construction toward something you believe in.
For the most common real use case, the cap is usually enough. If you work at a large employer and already hold company stock or options, excluding that one ticker is the entire reason you wanted personalization, and one of your five slots covers it. Screening out two industries handles most values-based objections. The ceiling only bites when you were imagining direct indexing as a design exercise, and that is a common misreading of what these accounts are for.
Worth being precise about the trade: FidFolios gives you a professionally managed version of an index Fidelity chose, minus a few names you object to. It does not give you authorship. If what you actually want is to decide the members and the weights yourself, that is a different product category, and within Fidelity it is Fidelity Basket Portfolios rather than FidFolios.
Fidelity direct indexing fees vs the market
Managed FidFolios against the platforms buyers compare it with
All figures from each provider's own published pages, checked August 2026. The last row is the benchmark every direct indexing fee has to justify itself against.
| Platform | Minimum | Annual fee | Index choice | Tax loss harvesting | Personalization |
|---|---|---|---|---|---|
| Fidelity Managed FidFolios | $5,000 to be invested | 0.40% index, 0.70% active | 8 strategies | Limited basis, at the portfolio manager's discretion | Up to 5 stocks or 2 industries |
| Wealthfront S&P 500 Direct | $5,000 | 0.09% | S&P 500 only | Systematic, marketed as core | Limited |
| Frec Classic | $20,000 to $50,000 | 0.09% to 0.35% | 25 indices | Systematic, "up to 40% of your portfolio in losses" | Broad |
| Schwab Personalized Indexing | $100,000 | From 0.40% | Several index strategies | Systematic | Broad screens and tilts |
| Goldman Sachs TACS (adviser channel) | $250,000 via Merrill Lynch | 0.20% via Merrill, up to 1.70% via GS Private Wealth | S&P 500 and other core indexes | Systematic, standalone account only | Exclusions only, no additions |
| S&P 500 index ETF | 1 share | 0.03% to 0.10% | One fund | None, losses net inside the wrapper | None |
Read across the Fidelity row and the picture is consistent: it is the easiest to get into and the most expensive per dollar of tax machinery, at least among the platforms you can open yourself. Wealthfront charges 0.09% for S&P 500 direct indexing at the same $5,000 entry point, which is roughly a quarter of Fidelity's index-strategy fee for a comparable job, with a firmer harvesting commitment. That comparison is uncomfortable for Fidelity and it is the honest one.
The adviser-channel row is new here and it cuts the other way. We read Goldman Sachs Asset Management's two Form ADV brochures in August 2026 and found the same Tax Advantaged Core Strategies portfolio priced at a 0.200% Style Manager Fee Rate through Merrill Lynch and at up to 1.700% a year through Goldman Sachs Private Wealth Management, with a $250,000 minimum either way. Set against that, Fidelity's 0.40% at a $5,000 entry point stops looking expensive and starts looking like the price of not needing an adviser at all. The category does not have one price. It has a retail tier around 0.09% to 0.40% and a private-client tier that runs four times higher for the same mechanics.
Where Fidelity earns the premium is everything the table cannot show. If your brokerage, your IRA, your HSA and your workplace plan are already at Fidelity, holding the direct indexing account there keeps one login, one tax package, one set of cost basis records and one wash sale surface to reason about. Wash sales are the underrated part of that: the rule applies across every account you and your spouse control, so scattering similar holdings across firms creates a problem that no single provider can see. Consolidation has real value, it is just not the value the fee page describes. The advisor-only tier is worth a look before you settle, because its pricing is less mysterious than it appears: Parametric publishes 35 bps and a $250,000 minimum for Custom Core in its Form ADV, with a $25,000 route through Morgan Stanley Select UMA. Our full provider table, including the advisor-only firms, is on direct indexing platforms compared, and the head-to-head buyers ask for most often is Fidelity FidFolios vs Frec.
FidFolios vs Fidelity Go vs Basket Portfolios
The three Fidelity products people mix up
A large share of the confusion in this cluster is not about direct indexing at all. It is people comparing three different Fidelity products that sound similar and do very different jobs.
| Product | Who decides | What you hold | Minimum to be invested | Cost |
|---|---|---|---|---|
| Managed FidFolios | Fidelity picks and manages | Individual stocks, fractional | $5,000 to be invested | 0.40% or 0.70% a year |
| Fidelity Go | Fidelity picks and manages | Mutual funds, not individual stocks | $10 to be invested | $0 under $25,000, then 0.35% |
| Fidelity Basket Portfolios | You pick and you weight | Individual stocks and ETFs, fractional | None | $4.99 a month |
The Fidelity Go comparison usually resolves faster than people expect. Go costs nothing at all below $25,000 and 0.35% above it, and it invests in mutual funds rather than individual stocks. If you simply want a managed portfolio, Go is cheaper at every balance under $25,000 and slightly cheaper above it. The only reason to pay 0.40% for FidFolios instead is that you specifically want to own the underlying shares, because owning them is what makes stock-level tax loss harvesting and stock-level exclusions possible in the first place. If neither of those matters to you, you are paying for machinery you will not use.
Basket Portfolios is the one that surprises people, because it is the only Fidelity product where you choose the holdings and the weights. It costs a flat $4.99 a month with no minimum and no percentage fee, which on a $100,000 account is about $60 a year against $400 for FidFolios. What it does not do is decide anything for you or check whether your construction makes sense. It will hold a badly weighted basket faithfully for a decade without comment, which is exactly why the design step deserves its own attention.
Is Fidelity Managed FidFolios worth it
Who FidFolios fits, and who should look elsewhere
It fits if
- Your financial life already lives at Fidelity and you value one login, one tax package and one wash sale surface.
- You have between $5,000 and $20,000 and want to own an index as real shares, where most competitors will not take you.
- You want to exclude your employer's stock or an industry, and five names or two industries covers it.
- You want the account managed for you and are not looking to author the construction.
Look elsewhere if
- Tax alpha is your main reason to buy. Fidelity harvests on a limited, discretionary basis while Wealthfront charges 0.09% and Frec quantifies its ceilings.
- You want an index other than broad US large cap or total market. Frec offers 25 indices against Fidelity's eight strategies.
- This is a retirement account. There are no taxes to manage inside an IRA, so the fee buys almost nothing.
- You want to decide the members and the weights yourself. That is a different job entirely.
The blunt version: FidFolios is the most accessible direct indexing account in the US retail market and the weakest of the serious ones at the thing direct indexing is supposed to be for. Both halves of that sentence are true at the same time, and which half matters depends entirely on why you are shopping. If you are here because a colleague said direct indexing saves tax, read the harvesting wording above before you fund anything. If you are here because you want to own the index rather than a fund, at a balance nobody else will accept, it is a fair deal.
Being straight about this
Indexes is not a Fidelity product and does not manage money
No affiliation
We have no relationship with Fidelity and are paid nothing for anything on this page. Every figure comes from Fidelity's own published pages in August 2026. Fees change, so confirm them with Fidelity before you act.
What we do not do
We do not custody assets, place trades, harvest losses or track cost basis, and we are not a registered investment adviser or a tax advisor. If you want an account managed for you, FidFolios or one of its competitors is the answer, not us.
What we do instead
We are the modeling layer that runs before you fund anything. Define the members and the weights, backtest that exact construction over real market history, and track it as a named index against the S&P 500 or BTC. No minimum, from $12 a month.
The reason that sequence helps here is specific. FidFolios gives you eight strategies and five exclusions, so the only real decision you get to make is which strategy to buy. Being able to see how a US large cap construction, a total market construction and a low volatility construction actually behaved against each other over real history turns that into an informed choice rather than a guess from three names on a page. It costs nothing to answer before the money moves, and it is a question the pricing page cannot help with. If you want the wider view first, start with what direct indexing is.
Questions
Fidelity Managed FidFolios, answered
What is Fidelity Managed FidFolios?
Fidelity Managed FidFolios is Fidelity's direct indexing account. Instead of buying one fund, it buys the individual stocks behind a strategy and holds them in fractional shares, so you own hundreds of companies directly. Fidelity manages the account for you. Index-tracking strategies cost 0.40% a year and actively managed ones cost 0.70%.
What is the minimum for Fidelity Managed FidFolios?
It is not quite the flat $5,000 most articles report. Fidelity states there is no minimum required to open the account, but your balance must reach at least $5,000 before Fidelity will invest it according to the strategy you picked. Practically that means you can open early and fund later, but nothing is invested until you cross $5,000.
How much does Fidelity Managed FidFolios cost?
Direct indexing strategies carry a 0.40% gross advisory fee, which Fidelity expresses as $20 per year for every $5,000 invested. Actively managed strategies cost 0.70%, or $35 per year per $5,000. There are eight strategies in total, five priced at 0.40% and three at 0.70%, so the fee depends entirely on which one you select.
Does Fidelity Managed FidFolios do tax loss harvesting?
Partly, and the wording matters. Fidelity says tax-smart techniques including tax-loss harvesting "are applied in managing certain taxable accounts on a limited basis, at the discretion of the portfolio manager." That is a weaker commitment than Wealthfront or Frec make, and it is not the always-on, systematic harvesting engine most people assume when they hear direct indexing. If tax alpha is your reason for buying, read that sentence twice.
Is Fidelity Managed FidFolios worth it?
It is worth it when you want to own an index as real stocks inside Fidelity, at a small balance, without doing the work yourself. It is poor value if you are buying it purely for tax loss harvesting, because you would pay 0.40% for a discretionary and limited version of the feature when Wealthfront charges 0.09% for a systematic one. In a retirement account it makes little sense at all, since there are no taxes to manage.
Fidelity Managed FidFolios vs Fidelity Go: which one should I use?
They solve different problems. Fidelity Go is a robo-advisor that invests in mutual funds, costs nothing below $25,000 and 0.35% above it, and needs only $10 invested. Managed FidFolios buys individual stocks, needs $5,000 invested and costs 0.40% or 0.70%. If you just want a managed portfolio cheaply, Go is cheaper. If you specifically want to own the underlying shares, only FidFolios does that.
What is the difference between Managed FidFolios and Fidelity Basket Portfolios?
One is managed, the other is self-directed, and people searching for Fidelity direct indexing often want the second. Managed FidFolios has Fidelity choose and run a strategy for a percentage fee. Fidelity Basket Portfolios lets you choose the stocks and the weights yourself and trade the whole basket in one action for a flat $4.99 a month, with no minimum. If you want authorship rather than delegation, the basket product is the one.
Is FidFolios direct indexing?
Yes for five of the eight strategies. Fidelity itself labels the U.S. Large Cap Index, U.S. Total Market Index, International Index, U.S. Low Volatility Index and Environmental Focus strategies as direct indexing and prices them at 0.40%. The other three, U.S. Large Cap, Dividend Income and International, are actively managed at 0.70% and are not index tracking, so buying one of those is not direct indexing at all.
Does FidFolios use fractional shares?
Yes. Fidelity states that it uses fractional shares in the portfolio, "which means you can own hundreds of stocks for as low as $5,000." Fractional trading is what makes a $5,000 account able to hold a broad index at all. Without it, a few high-priced stocks would consume the balance before the account got near full coverage.
Can I exclude stocks from Fidelity Managed FidFolios?
Within a published limit: "You may exclude up to five individual stocks or two industries in your account." That covers the common cases, such as screening out your employer or an industry you object to holding. It is narrower than the screening most competitors allow, so if extensive customization is the point, check the ceiling before you fund.
What are Fidelity's direct indexing fees?
Fidelity charges 0.40% a year for the direct indexing strategies inside Managed FidFolios. On a $25,000 account that is $100 a year, and on $100,000 it is $400. For comparison, a plain S&P 500 index ETF costs roughly 0.03% and Wealthfront charges 0.09% for S&P 500 direct indexing, so Fidelity sits at the expensive end of the retail direct indexing market.
Are FidFolios worth it for a small account?
At $5,000 the fee is only about $20 a year, which is trivial in dollars, but so is the benefit. Tax loss harvesting has little to work with at that balance, and Fidelity applies it on a limited basis anyway, so what you are really buying is a managed portfolio of real shares rather than a tax strategy. That can be a perfectly reasonable thing to want, provided you are honest that it is the reason.
What is the difference between Fidelity managed portfolios and Managed FidFolios?
"Fidelity managed portfolios" is the umbrella, not a product. Fidelity runs several managed offerings at different price points: Fidelity Go invests in mutual funds and costs nothing below $25,000 then 0.35%; Managed FidFolios buys individual stocks at 0.40% for index strategies and 0.70% for active ones; and Fidelity Wealth Services is the advisor-led tier above them. FidFolios is the only one of the three that holds the underlying shares directly, which is what makes it the direct indexing option rather than a robo-advisor.
Compare direct indexing AUM fees: Fidelity vs Schwab vs Frec
Fidelity and Schwab both charge 0.40%; Frec ranges from 0.09% to 0.35%. The minimums are what separate them. Fidelity needs $5,000 invested, Frec needs $20,000 on most strategies and $50,000 on some, and Schwab needs $100,000. So at $10,000 only Fidelity is open to you; at $50,000 Frec is roughly four times cheaper on its S&P 500 strategy; and at $100,000 all three are available with Schwab and Fidelity level at $400 a year against Frec's $90. Schwab drops to 0.35% only above $2,000,000.
Wealthfront vs Fidelity direct indexing: minimums and fees
Both need $5,000 to get invested, so the minimums are effectively level and the fees are not. Wealthfront S&P 500 Direct charges 0.09% a year and Nasdaq-100 Direct 0.12%, against 0.40% for Fidelity's index strategies, so Fidelity costs roughly four and a half times more for the same job: $400 a year on $100,000 against $90. Wealthfront also harvests automatically and publishes a decade of measured harvesting yield, where Fidelity applies harvesting on a limited, discretionary basis. Fidelity's advantages are breadth of strategy, the full brokerage relationship around it, and a personalisation policy you should check either way, since Fidelity caps exclusions at five stocks or two industries while Wealthfront publishes no numeric cap.
Is Fidelity Managed FidFolios better than Frec for direct indexing?
Better on access and on having everything in one place, worse on price and on how seriously the tax harvesting is taken. Fidelity gets you invested at $5,000 where Frec Classic wants $20,000 on most strategies and $50,000 on some, so at a small balance Fidelity may be the only one of the two open to you. Above that, Frec charges 0.09% to 0.35% against Fidelity's flat 0.40%, offers 25 indices against Fidelity's five index strategies, and publishes a per-strategy harvest rate rather than describing harvesting as discretionary. If tax alpha is the reason you want direct indexing, Frec is the stronger buy. If you want a managed account inside a brokerage you already use, Fidelity is.
Can Fidelity Managed FidFolios diversify a concentrated stock position?
Not without selling first, which is usually the thing you are trying to avoid. FidFolios harvests losses on money you put in; it has no mechanism for a large embedded gain you already hold. If your problem is a single appreciated position rather than how to invest new cash, the relevant options are selling in tranches across tax years, an exchange fund, or a long and short transition strategy. Fidelity does offer exchange funds through its advisor channel, but they are not part of the FidFolios product.
Go deeper
Test the construction before you pick a strategy
Build the weighted index, backtest it over real market history, and track it against the S&P 500. No minimum, no account to link, no trades placed. Educational and informational only, not tax or investment advice.