Fund Comparison

The Fidelity ZERO Large Cap Index Fund (FNILX) and the State Street SPDR S&P 500 ETF (SPY) are two of the largest index funds in existence and easily two of the most popular among individual investors. SPY and FNILX are the core of many investor portfolios and many investors compare FNILX vs SPY in order to decide which should be the foundation of their portfolio.

A quick reminder that this site does NOT provide investment recommendations. Fund comparisons (such as this one) are not conducted to identify the “best” fund (since that will vary from investor to investor based on investor-specific factors). Rather, these fund comparison posts are designed to identify and distinguish between the fund details that matter versus the ones that don’t.

The Short Answer

FNILX and SPY are extremely similar, except for two major differences. In my view, the major difference is that FNILX can only be bought and/or owned at Fidelity (which is a non-starter for many investors, including myself even if my accounts were at Fidelity). Secondly, FNILX is a mutual fund and SPY is an ETF. This difference in structure leads to differences in taxes, tradability, etc.

FNILX is not an S&P 500 index fund and the underlying benchmark indices that these funds track are technically different (S&P 500 Index vs Fidelity US Total Investable Market Index), but they are identical is most respects. Consequently, the risk and return of FNILX and SPY is nearly identical and I consider these two funds equivalent and interchangeable.

The Longer Answer

These two funds are incredibly similar and leads some to question: is FNILX the same as SPY?

Technically, SPY is a different fund with a different structure than FNILX. But for many intents and purposes, SPY and FNILX are identical. Both funds are broad-based indices that represent the US equity markets.

Historical Performance: FNILX vs SPY

SPY was very first ETF launched (back in 1993), while FNILX was launched in September 2018. Since their common inception date in 2018, the two funds have had nearly identical performance: 8.43% vs 8.56% on an annualized basis. Over those years, the cumulative performance differential has been less than 1%!

Differences Between FNILX and SPY

Geography

Both the SPY and FNILX only include stocks of US-domiciled companies.

Market Capitalization

The two funds have a near identical number of holdings (as of 11/30/2022); SPY holds 509 securities versus FNILX’s 510 stocks. Not surprisingly, the market cap weighting of the funds are essentially identical.

	SPY	FNILX
Large Cap	84%	84%
Mid Cap	16%	16%
Small Cap	0%	0%

Sector Weights

The sector weights of each fund very close to one another as the below table shows.

	SPY	FNILX
Basic Materials	2.46%	2.41%
Consumer Cyclical	9.57%	9.95%
Financial Services	13.84%	13.69%
Real Estate	2.80%	2.64%
Communication Services	7.28%	7.53%
Energy	5.23%	5.12%
Industrials	9.06%	8.48%
Technology	23.04%	24.76%
Consumer Defensive	7.61%	7.18%
Healthcare	15.92%	15.38%
Utilities	3.19%	2.86%

Factors to Consider

Expenses

FNILX grabbed headlines when Fidelity announced it, due to the 0% expense ratio. While zero expenses is great, it is only ~.09% less than SPY. So even though the difference in expenses is infinite in relative terms, its only nine basis points. At a certain level (such as this one), differences in expense ratios do not matter. Since these portfolios are essentially identical, I would most likely lean towards SPY.

Tradability

In my view, the most important factor to consider when evaluating SPY vs FNILX is the fact that FNILX cannot be bought or owned outside of Fidelity. Personally, this is a non-starter for me as there are reasons to transfer assets to other custodians, such as transferring one’s accounts or making a donation. Some investors may not value flexibility as much, but they should be aware of this limitation.

Transaction Costs

ETFs are free to trade at many brokers and custodians, although many still charge commissions and/or transaction fees to buy/sell mutual funds. As mentioned, FNILX can only be bought and/or held at Fidelity. So if an investor account is at Fidelity, it is free to trade FNILX or SPY. However, only SPY is free to trade in non-Fidelity accounts (or even traded at all!).

There is a bid-ask spread when trading ETFs, but this spread is typically less than .01% for SPY and individual investor trades will not generally be large enough to “move” the market. In the case of SPY, individual investors should not have a problem trading.

Tax Efficiency & Capital Gain Distributions

ETFs are typically more tax-efficient than mutual funds, due to their ability to avoid realizing capital gains through like-kind redemptions (a process that is beyond the scope of this post).

FNILX routinely makes capital gains distributions, while SPY does not make capital gains distributions nor do I expect it to (since it is an ETF). FNILX is relatively tax-efficient since it is an index fund, but SPY is even more tax-efficient.

Tax Loss Harvesting

My personal preference is to keep a portfolio entirely mutual funds or entirely ETFs, due to the mechanics of settlement during tax loss harvesting. If an ETF has declined in value and an investor sells it, the trade and cash proceeds will not settle for two business days (T+2). That investor may want to “replace” the sold ETF immediately and attempt to buy another ETF or mutual fund simultaneously.

However, mutual funds settle on T+1 basis, so cash for the mutual purchase would be due in one business day (which is one day earlier than the cash from the ETF sale is received). This can obviously cause problems and (even though this issue can be addressed with careful planning) I find it easier to keep accounts invested in similar vehicles. In this case, if a portfolio is all mutual funds, I might consider FNILX. If all ETFs, I might lean more towards SPY.

FNILX vs SPY: The Bottom Line

FNILX and SPY are nearly identical in most respects. Personally, I would not spend too much time trying to divine which is “better” and would just choose whether a mutual fund or ETF makes more sense for my portfolio based on the above factors.

That being said, investors should not consider FNILX unless their account is at Fidelity. If my accounts were at Fidelity, I might consider FNILX in a tax-exempt or tax-deferred account. However, I would never buy FNILX in a taxable account due to the inability to transfer the assets (without realizing a potential gain) out of Fidelity if I wanted to move my accounts, donate the shares, etc.

For those asking: which is better, SPY or FNILX? I believe SPY is better than FNILX in most situations. Personally, I would never buy or recommend FNILX due to the limitations.

The Fidelity ZERO Large Cap Index Fund (FNILX) and the iShares Core S&P 500 ETF (IVV) are two of the largest index funds in existence and easily two of the most popular among individual investors. IVV and FNILX are the core of many investor portfolios and many investors compare FNILX vs IVV in order to decide which should be the foundation of their portfolio.

A quick reminder that this site does NOT provide investment recommendations. Fund comparisons (such as this one) are not conducted to identify the “best” fund (since that will vary from investor to investor based on investor-specific factors). Rather, these fund comparison posts are designed to identify and distinguish between the fund details that matter versus the ones that don’t.

The Short Answer

FNILX and IVV are extremely similar, except for two major differences. In my view, the major difference is that FNILX can only be bought and/or owned at Fidelity (which is a non-starter for many investors, including myself even if my accounts were at Fidelity). Secondly, FNILX is a mutual fund and IVV is an ETF. This difference in structure leads to differences in taxes, tradability, etc.

The underlying benchmark indices that these funds track are technically different (S&P 500 Index vs Fidelity US Total Investable Market Index), but they are identical is most respects. Consequently, the risk and return of FNILX and IVV is nearly identical and I consider these two funds equivalent and interchangeable.

The Longer Answer

These two funds are incredibly similar and leads some to question: is FNILX the same as IVV?

Technically, IVV is a different fund with a different structure than FNILX. But for many intents and purposes, IVV and FNILX are identical. Both funds are broad-based indices that represent the US equity markets.

Historical Performance: FNILX vs IVV

IVV was launched in 2000, while FNILX was launched in September 2018. Since their common inception date in 2018, the two funds have had nearly identical performance: 8.43% vs 8.59% on an annualized basis. Over those years, the cumulative performance differential has been less than 1%!

Differences Between FNILX and IVV

Geography

Both the IVV and FNILX only include stocks of US-domiciled companies.

Market Capitalization

The two funds have a near identical number of holdings (as of 11/30/2022); IVV holds 509 securities versus FNILX’s 510 stocks. Not surprisingly, the market cap weighting of the funds are essentially identical.

	IVV	FNILX
Large Cap	83%	84%
Mid Cap	16%	16%
Small Cap	0%	0%

Sector Weights

The sector weights of each fund very close to one another as the below table shows.

	IVV	FNILX
Basic Materials	2.55%	2.41%
Consumer Cyclical	9.94%	9.95%
Financial Services	14.12%	13.69%
Real Estate	2.87%	2.64%
Communication Services	7.54%	7.53%
Energy	5.15%	5.12%
Industrials	9.02%	8.48%
Technology	23.10%	24.76%
Consumer Defensive	7.35%	7.18%
Healthcare	15.27%	15.38%
Utilities	3.09%	2.86%

Factors to Consider

Expenses

FNILX grabbed headlines when Fidelity announced it, due to the 0% expense ratio. While zero expenses is great, it is only .03% less than IVV. So even though the difference in expenses is infinite in relative terms, its only three basis points. At a certain level (such as this one), differences in expense ratios do not matter. Since these portfolios are essentially identical, I would most likely lean towards IVV.

Tradability

In my view, the most important factor to consider when evaluating IVV vs FNILX is the fact that FNILX cannot be bought or owned outside of Fidelity. Personally, this is a non-starter for me as there are reasons to transfer assets to other custodians, such as transferring one’s accounts or making a donation. Some investors may not value flexibility as much, but they should be aware of this limitation.

Transaction Costs

ETFs are free to trade at many brokers and custodians, although many still charge commissions and/or transaction fees to buy/sell mutual funds. As mentioned, FNILX can only be bought and/or held at Fidelity. So if an investor account is at Fidelity, it is free to trade FNILX or IVV. However, only IVV is free to trade in non-Fidelity accounts (or even traded at all!).

There is a bid-ask spread when trading ETFs, but this spread is typically less than .01% for IVV and individual investor trades will not generally be large enough to “move” the market. In the case of IVV, individual investors should not have a problem trading.

Tax Efficiency & Capital Gain Distributions

ETFs are typically more tax-efficient than mutual funds, due to their ability to avoid realizing capital gains through like-kind redemptions (a process that is beyond the scope of this post).

FNILX routinely makes capital gains distributions, while IVV does not make capital gains distributions nor do I expect it to (since it is an ETF). FNILX is relatively tax-efficient since it is an index fund, but IVV is even more tax-efficient.

Tax Loss Harvesting

My personal preference is to keep a portfolio entirely mutual funds or entirely ETFs, due to the mechanics of settlement during tax loss harvesting. If an ETF has declined in value and an investor sells it, the trade and cash proceeds will not settle for two business days (T+2). That investor may want to “replace” the sold ETF immediately and attempt to buy another ETF or mutual fund simultaneously.

However, mutual funds settle on T+1 basis, so cash for the mutual purchase would be due in one business day (which is one day earlier than the cash from the ETF sale is received). This can obviously cause problems and (even though this issue can be addressed with careful planning) I find it easier to keep accounts invested in similar vehicles. In this case, if a portfolio is all mutual funds, I might consider FNILX. If all ETFs, I might lean more towards IVV.

FNILX vs IVV: The Bottom Line

FNILX and IVV are nearly identical in most respects. Personally, I would not spend too much time trying to divine which is “better” and would just choose whether a mutual fund or ETF makes more sense for my portfolio based on the above factors.

That being said, investors should not consider FNILX unless their account is at Fidelity. If my accounts were at Fidelity, I might consider FNILX in a tax-exempt or tax-deferred account. However, I would never buy FNILX in a taxable account due to the inability to transfer the assets (without realizing a potential gain) out of Fidelity if I wanted to move my accounts, donate the shares, etc.

Personally, I would never buy or recommend FNILX, except in very limited cases.

The Fidelity ZERO Large Cap Index Fund (FNILX) and the Vanguard S&P 500 ETF (VOO) are two of the largest index funds in existence and easily two of the most popular among individual investors. VOO and FNILX are the core of many investor portfolios and many investors compare FNILX vs VOO in order to decide which should be the foundation of their portfolio.

A quick reminder that this site does NOT provide investment recommendations. Fund comparisons (such as this one) are not conducted to identify the “best” fund (since that will vary from investor to investor based on investor-specific factors). Rather, these fund comparison posts are designed to identify and distinguish between the fund details that matter versus the ones that don’t.

The Short Answer

FNILX and VOO are extremely similar, except for two major differences. In my view, the major difference is that FNILX can only be bought and/or owned at Fidelity (which is a non-starter for many investors, including myself even if my accounts were at Fidelity). Secondly, FNILX is a mutual fund and VOO is an ETF. This difference in structure leads to differences in taxes, tradability, etc.

The underlying benchmark indices that these funds track are technically different (S&P 500 Index vs Fidelity US Total Investable Market Index), but they are identical is most respects. Consequently, the risk and return of FNILX and VOO is nearly identical and I consider these two funds equivalent and interchangeable.

The Longer Answer

These two funds are incredibly similar and leads some to question: is FNILX the same as VOO?

Technically, VOO is a different fund with a different structure than FNILX. But for many intents and purposes, VOO and FNILX are identical. Both funds are broad-based indices that represent the US equity markets.

Historical Performance: FNILX vs VOO

VOO was launched in 2010, while FNILX was launched in September 2018. Since their common inception date in 2018, the two funds have had nearly identical performance: 8.42% vs 8.58% on an annualized basis. Over those years, the cumulative performance differential has been less than 1%!

Differences Between FNILX and VOO

Geography

Both the VOO and FNILX only include stocks of US-domiciled companies.

Market Capitalization

The two funds have a near identical number of holdings (as of 11/30/2022); VOO holds 509 securities versus FNILX’s 510 stocks. Not surprisingly, the market cap weighting of the funds are essentially identical.

	VOO	FNILX
Large Cap	84%	84%
Mid Cap	16%	16%
Small Cap	0%	0%

Sector Weights

The sector weights of each fund very close to one another as the below table shows.

	VOO	FNILX
Basic Materials	2.46%	2.41%
Consumer Cyclical	9.57%	9.95%
Financial Services	13.84%	13.69%
Real Estate	2.80%	2.64%
Communication Services	7.28%	7.53%
Energy	5.23%	5.12%
Industrials	9.06%	8.48%
Technology	23.04%	24.76%
Consumer Defensive	7.61%	7.18%
Healthcare	15.92%	15.38%
Utilities	3.19%	2.86%

Factors to Consider

Expenses

FNILX grabbed headlines when Fidelity announced it, due to the 0% expense ratio. While zero expenses is great, it is only .03% less than VOO. So even though the difference in expenses is infinite in relative terms, its only three basis points. At a certain level (such as this one), differences in expense ratios do not matter. Since these portfolios are essentially identical, I would most likely lean towards VOO.

Tradability

In my view, the most important factor to consider when evaluating VOO vs FNILX is the fact that FNILX cannot be bought or owned outside of Fidelity. Personally, this is a non-starter for me as there are reasons to transfer assets to other custodians, such as transferring one’s accounts or making a donation. Some investors may not value flexibility as much, but they should be aware of this limitation.

Transaction Costs

ETFs are free to trade at many brokers and custodians, although many still charge commissions and/or transaction fees to buy/sell mutual funds. As mentioned, FNILX can only be bought and/or held at Fidelity. So if an investor account is at Fidelity, it is free to trade FNILX or VOO. However, only VOO is free to trade in non-Fidelity accounts (or even traded at all!).

There is a bid-ask spread when trading ETFs, but this spread is typically less than .01% for VOO and individual investor trades will not generally be large enough to “move” the market. In the case of VOO, individual investors should not have a problem trading.

Tax Efficiency & Capital Gain Distributions

ETFs are typically more tax-efficient than mutual funds, due to their ability to avoid realizing capital gains through like-kind redemptions (a process that is beyond the scope of this post).

FNILX routinely makes capital gains distributions, while VOO does not make capital gains distributions nor do I expect it to (since it is an ETF). FNILX is relatively tax-efficient since it is an index fund, but VOO is even more tax-efficient.

Tax Loss Harvesting

My personal preference is to keep a portfolio entirely mutual funds or entirely ETFs, due to the mechanics of settlement during tax loss harvesting. If an ETF has declined in value and an investor sells it, the trade and cash proceeds will not settle for two business days (T+2). That investor may want to “replace” the sold ETF immediately and attempt to buy another ETF or mutual fund simultaneously.

However, mutual funds settle on T+1 basis, so cash for the mutual purchase would be due in one business day (which is one day earlier than the cash from the ETF sale is received). This can obviously cause problems and (even though this issue can be addressed with careful planning) I find it easier to keep accounts invested in similar vehicles. In this case, if a portfolio is all mutual funds, I might consider FNILX. If all ETFs, I might lean more towards VOO.

FNILX vs VOO: The Bottom Line

FNILX and VOO are nearly identical in most respects. Personally, I would not spend too much time trying to divine which is “better” and would just choose whether a mutual fund or ETF makes more sense for my portfolio based on the above factors.

That being said, investors should not consider FNILX unless their account is at Fidelity. If my accounts were at Fidelity, I might consider FNILX in a tax-exempt or tax-deferred account. However, I would never buy FNILX in a taxable account due to the inability to transfer the assets (without realizing a potential gain) out of Fidelity if I wanted to move my accounts, donate the shares, etc.

For those asking: which is better, VOO or FNILX? I believe VOO is better than FNILX in most situations.

The Fidelity ZERO Total Market Index Fund (FZROX) and the Vanguard Total Stock Market ETF (VTI) are two of the largest “total market” index funds in existence and easily two of the most popular among individual investors. VTI and FZROX are the core of many investor portfolios and many investors compare FZROX vs VTI in order to decide which should be the foundation of their portfolio.

A quick reminder that this site does NOT provide investment recommendations. Fund comparisons (such as this one) are not conducted to identify the “best” fund (since that will vary from investor to investor based on investor-specific factors). Rather, these fund comparison posts are designed to identify and distinguish between the fund details that matter versus the ones that don’t.

The Short Answer

FZROX and VTI are extremely similar, except for two major differences. In my view, the major difference is that FZROX can only be bought and/or owned at Fidelity (which is a non-starter for many investors, including myself even if my accounts were at Fidelity). Secondly, FZROX is a mutual fund and VTI is an ETF. This difference in structure leads to differences in taxes, tradability, etc.

The underlying benchmark indices that these funds track are technically different (CRSP US Total Market Index vs Fidelity US Total Investable Market Index), but they are identical is most respects. Consequently, the risk and return of FZROX and VTI is nearly identical and I consider these two funds equivalent and interchangeable.

The Longer Answer

These two funds are incredibly similar and leads some to question: is FZROX the same as VTI?

Technically, VTI is a different fund with a different structure than FZROX. But for many intents and purposes, VTI and FZROX are identical. Both funds are broad-based indices that represent the US equity markets.

Historical Performance: FZROX vs VTI

VTI was launched in 2001, while FZROX was launched on August 2, 2018. Since that time, the two funds have had nearly identical performance: 8.23% vs 8.12% on an annualized basis. Over those 11 years, the cumulative performance differential has been only been about .6%!

Differences Between FZROX and VTI

Geography

Both the VTI and FZROX only include stocks of US-domiciled companies.

Market Capitalization

The two funds have quite a different number of holdings (as of 11/30/2022); VTI holds 4,026 stocks versus FZROX’s 2,822 stocks. However, the market cap weighting of the funds are essentially identical.

	VTI	FZROX
Large Cap	73%	73%
Mid Cap	19%	19%
Small Cap	9%	9%

Sector Weights

The sector weights of each fund are identical, with many sector weights within .10% of each other!

	VTI	FZROX
Basic Materials	2.65%	2.67%
Consumer Cyclical	10.35%	10.47%
Financial Services	13.90%	14.01%
Real Estate	3.48%	3.46%
Communication Services	6.89%	6.90%
Energy	5.09%	5.14%
Industrials	9.80%	9.59%
Technology	23.04%	23.15%
Consumer Defensive	6.80%	6.79%
Healthcare	15.09%	14.95%
Utilities	2.91%	2.87%

Factors to Consider

Expenses

FZROX grabbed headlines when Fidelity announced it, due to the 0% expense ratio. While zero expenses is great, it is only .03% less than VTI. So even though the difference in expenses is infinite in relative terms, its only three basis points. At a certain level (such as this one), differences in expense ratios do not matter. Since these portfolios are essentially identical, I would most likely lean towards VTI.

Tradability

In my view, the most important factor to consider when evaluating VTI vs FZROX is the fact that FZROX cannot be bought or owned outside of Fidelity. Personally, this is a non-starter for me as there are reasons to transfer assets to other custodians, such as transferring one’s accounts or making a donation. Some investors may not value flexibility as much, but they should be aware of this limitation.

Transaction Costs

ETFs are free to trade at many brokers and custodians, although many still charge commissions and/or transaction fees to buy/sell mutual funds. As mentioned, FZROX can only be bought and/or held at Fidelity. So if an investor account is at Fidelity, it is free to trade FZROX or VTI. However, only VTI is free to trade in non-Fidelity accounts (or even traded at all!).

There is a bid-ask spread when trading ETFs, but this spread is typically less than .01% for VTI and individual investor trades will not generally be large enough to “move” the market. In the case of VTI, individual investors should not have a problem trading.

Tax Efficiency & Capital Gain Distributions

ETFs are typically more tax-efficient than mutual funds, due to their ability to avoid realizing capital gains through like-kind redemptions (a process that is beyond the scope of this post).

FZROX routinely makes capital gains distributions, while VTI does not make capital gains distributions nor do I expect it to (since it is an ETF). FZROX is relatively tax-efficient since it is an index fund, but VTI is even more tax-efficient.

Tax Loss Harvesting

My personal preference is to keep a portfolio entirely mutual funds or entirely ETFs, due to the mechanics of settlement during tax loss harvesting. If an ETF has declined in value and an investor sells it, the trade and cash proceeds will not settle for two business days (T+2). That investor may want to “replace” the sold ETF immediately and attempt to buy another ETF or mutual fund simultaneously.

However, mutual funds settle on T+1 basis, so cash for the mutual purchase would be due in one business day (which is one day earlier than the cash from the ETF sale is received). This can obviously cause problems and (even though this issue can be addressed with careful planning) I find it easier to keep accounts invested in similar vehicles. In this case, if a portfolio is all mutual funds, I might consider FZROX. If all ETFs, I might lean more towards VTI.

FZROX vs VTI: The Bottom Line

FZROX and VTI are nearly identical in most respects. Personally, I would not spend too much time trying to divine which is “better” and would just choose whether a mutual fund or ETF makes more sense for my portfolio based on the above factors.

That being said, investors should not consider FZROX unless their account is at Fidelity. If my accounts were at Fidelity, I might consider FZROX in a tax-exempt or tax-deferred account. However, I would never buy FZROX in a taxable account due to the inability to transfer the assets (without realizing a potential gain) out of Fidelity if I wanted to move my accounts, donate the shares, etc.

For those asking: which is better, VTI or FZROX? I believe VTI is better than FZROX in most situations.

The Fidelity ZERO Total Market Index Fund (FZROX) and the Vanguard Total Stock Market Index Fund (VTSAX) are two of the largest “total market” index funds in existence and easily two of the most popular among individual investors. VTSAX and FZROX are the core of many investor portfolios and many investors compare FZROX vs VTSAX in order to decide which should be the foundation of their portfolio.

A quick reminder that this site does NOT provide investment recommendations. Fund comparisons (such as this one) are not conducted to identify the “best” fund (since that will vary from investor to investor based on investor-specific factors). Rather, these fund comparison posts are designed to identify and distinguish between the fund details that matter versus the ones that don’t.

The Short Answer

FZROX and VTSAX are extremely similar, except for one major differences. The major difference is that FZROX can only be bought and/or owned at Fidelity (which is a non-starter for many investors, including myself even if my accounts were at Fidelity).

The underlying benchmark indices that these funds track are technically different (CRSP US Total Market Index vs Fidelity US Total Investable Market Index), but they are identical is most respects. Consequently, the risk and return of FZROX and VTSAX is nearly identical and I consider these two funds equivalent and interchangeable.

The Longer Answer

Historical Performance: FZROX vs VTSAX

VTSAX was launched in back in 2000, while FZROX was launched on August 2, 2018. Since that time, the two funds have had near identical performance: 8.23% vs 8.11% on an annualized basis. Over those years, the cumulative performance differential has been less than .7%!

Differences Between FZROX and VTSAX

Geography

Both the VTSAX and FZROX only include stocks of US-domiciled companies.

Market Capitalization

The two funds have quite a different number of holdings (as of 11/30/2022); VTSAX holds 4,026 stocks versus FZROX’s 2,822 stocks. However, the market cap weighting of the funds are identical.

	VTSAX	FZROX
Large Cap	73%	73%
Mid Cap	19%	19%
Small Cap	9%	9%

Sector Weights

The sector weights of each fund are identical, with many sector weights within .10% of each other!

	VTSAX	FZROX
Basic Materials	2.65%	2.67%
Consumer Cyclical	10.35%	10.47%
Financial Services	13.90%	14.01%
Real Estate	3.48%	3.46%
Communication Services	6.89%	6.90%
Energy	5.09%	5.14%
Industrials	9.80%	9.59%
Technology	23.04%	23.15%
Consumer Defensive	6.80%	6.79%
Healthcare	15.09%	14.95%
Utilities	2.91%	2.87%

Factors to Consider

Expenses

FZROX grabbed headlines when Fidelity announced it, due to the 0% expense ratio. While zero expenses is great, it is only .03% less than VTSAX. So even though the difference in expenses is infinite in relative terms, its only three basis points. At a certain level (such as this one), differences in expense ratios do not matter. Since these portfolios are essentially identical, I would most likely lean towards VTSAX.

Tradability

In my view, the most important factor to consider when evaluating VTSAX vs FZROX is the fact that FZROX cannot be bought or owned outside of Fidelity. Personally, this is a non-starter for me as there are reasons to transfer assets to other custodians, such as transferring one’s accounts or making a donation. Some investors may not value flexibility as much, but they should be aware of this limitation.

Transaction Costs

ETFs are free to trade at many brokers and custodians, although many still charge commissions and/or transaction fees to buy/sell mutual funds. As mentioned, FZROX can only be bought and/or held at Fidelity. So if an investor account is at Fidelity, it is free to trade FZROX but trading VTSAX will cost money.

To my knowledge, Vanguard does not participate in the pay-to-play arrangements that would allow their mutual funds to trade for free on many platforms. So only accounts at Vanguard can trade VTSAX (but they cannot trade FZROX at all!).

Investors looking for an ETF may want to consider VTI, the ETF share class of VTSAX (read our review of VTI vs FZROX here). There is a bid-ask spread when trading ETFs, but this spread is typically less than .01% for VTSAX and individual investor trades will not generally be large enough to “move” the market. In the case of VTSAX, individual investors should not have a problem trading.

Tax Efficiency & Capital Gain Distributions

FZROX routinely makes capital gains distributions, while VTSAX does not make capital gains distributions (nor do I expect it to, due to Vanguard’s fund structure). FZROX is relatively tax-efficient since it is an index fund, but VTSAX is even more tax-efficient.

Final Thoughts on FZROX & VTSAX

FZROX and VTSAX are nearly identical in most respects. Personally, I would not spend too much time trying to divine which fund is “better.”

That being said, investors should not consider FZROX unless their account is at Fidelity. If my accounts were at Fidelity, I might consider FZROX in a tax-exempt or tax-deferred account. However, I would never buy FZROX in a taxable account due to the inability to transfer the assets (without realizing a potential gain) out of Fidelity if I wanted to move my accounts, donate the shares, etc. Therefore, I believe VTSAX is the better choice for most situations, although investor may want to look at similar ETFs too.

The Fidelity S&P 500 Index mutual fund (FXAIX) and the Fidelity ZERO Total Market Index fund (FZROX) are two of the largest mutual funds in existence. FXAIX and FZROX are the core of many investor portfolios. Many investors compare FXAIX vs FZROX in order to decide which should be the foundation of their portfolio.

A quick reminder that this site does NOT provide investment recommendations. Fund comparisons (such as this one) are not conducted to identify the “best” fund (since that will vary from investor to investor based on investor-specific factors). Rather, these fund comparison posts are designed to identify and distinguish between the fund details that matter versus the ones that don’t.

The Short Answer

There are two main differences between FXAIX and FZROX. Firstly, and perhaps most importantly, FZROX can only be bought and owned at Fidelity. Secondly, FXAIX is a large- and mid-cap fund, while FZROX is a total market fund. Despite these differences, the total return between these two funds is pretty close.

The Long Answer

Historical Performance: FXAIX vs FZROX

FXAIX was launched back in 1988, while FZROX was launched on August 2, 2018. Since then, FXAIX has outperformed by about a .75% annually. This is not a huge performance differential, but it does compound over time. The cumulative difference between the two funds since common inception is approximately 4.25%.

Of course, the outperformance of FXAIX is reflective of large-cap stocks’ dominance over the past decade. If mid-caps and/or small-caps lead, then I suspect FZROX would outperform.

Differences between FXAIX vs FZROX

The biggest difference between FXAIX and FZROX is the market cap exposure of the funds. FXAIX tracks the S&P 500 index which includes mostly large-caps and some mid-caps, while FZROX covers much more of the market by including more mid-caps and small-caps.

Geographic Exposure

Both FXAIX and FZROX hold essentially 100% stocks, so I will not dig into country exposures or market classification here. For intents and purposes, the two funds have identical exposures.

Market Cap Exposure

FXAIX focuses on the S&P 500 index and so it mostly holds large-caps with a bit of mid-cap exposure. FZROX tracks the broader Dow Jones U.S. Total Stock Market Index and so it owns many more mid-caps and small-caps (as of 11/30/2022). In other words, FXAIX is a large-cap vehicle, while FZROX is a total market vehicle. That being said, due to market cap weighting, both funds are overwhelmingly influenced by the large-cap holdings.

	FXAIX	FZROX
Large-Cap	83%	73%
Mid-Cap	16%	19%
Small-Cap	0%	9%

Sector Weights

The sector weights between FXAIX and FZROX are nearly identical, as of 11/30/2022. The weights are within 1% for every single sector.

	FXAIX	FZROX
Basic Materials	2.40%	2.67%
Consumer Cyclical	10.16%	10.47%
Financial Services	13.80%	14.01%
Real Estate	2.77%	3.46%
Communication Services	7.46%	6.90%
Energy	5.12%	5.14%
Industrials	8.86%	9.59%
Technology	23.72%	23.15%
Consumer Defensive	7.40%	6.79%
Healthcare	15.31%	14.95%
Utilities	2.99%	2.87%

Factors to Consider

Tradability

In my view, the most important factor to consider when evaluating FXAIX vs FZROX is the fact that FZROX cannot be bought or owned outside of Fidelity. Personally, this is a non-starter for me as there are reasons to transfer assets to other custodians, such as transferring one’s accounts or making a donation. Some investors may not value flexibility as much, but they should be aware of this limitation.

Transaction Costs

Many brokers and custodians still charge commissions and/or transaction fees to buy/sell mutual funds. To my knowledge, Fidelity does not participate in the pay-to-play arrangements (with their competitor custodians) that would allow their mutual funds to trade for free on many platforms. So if an investor account is at Fidelity, it is generally free to trade FXAIX or FZROX. Other custodians will likely charge a fee to trade FXAIX and will not allow FZROX trades at all!

It is worth noting that neither fund has a minimum for initial or additional investments. That being said, investors looking for free trades may want to consider an a total market ETF or large-cap ETF, rather than FZROX or FXAIX.

Expenses

FZROX grabbed headlines when Fidelity announced it, due to the 0% expense ratio. While zero expenses is great, it is only .015% less than FXAIX. So even though the difference in expenses is infinite in relative terms, its only a basis point and a half difference. At a certain level (such as this one), differences in expense ratios do not matter.

Tax Efficiency & Capital Gain Distributions

Both funds have made capital gains distributions in the past and will likely make them in the future. It is not possible to say which one will be more tax-efficient in the future. As index funds, the tax drag on both funds is very low. However, tax-sensitive taxable investors may want to consider using an ETF in lieu of either of these funds.

Final Thoughts: FZROX vs FXAIX

Both FXAIX and FZROX are large, core funds sponsored and managed by one of the largest asset managers in the world (Fidelity). Beyond market cap exposures, the funds appear and act very similar. Long-term performance has been nearly identical. I view these two funds as essentially interchangeable and would not spend too much energy splitting hairs to decide which one is “better.”

Should I invest in FZROX or FXAIX?

I believe FXAIX is the better choice for most situations, although investors may want to look at similar ETFs too.

Investors should not consider FZROX at all unless their account is at Fidelity. If my accounts were at Fidelity, I might consider FZROX in a tax-exempt or tax-deferred account. However, I would never buy FZROX in a taxable account due to the inability to transfer the assets (without realizing a potential gain) out of Fidelity if I wanted to move my accounts, donate the shares, etc.

The Fidelity ZERO Total Market Index Fund (FZROX) and the Schwab Total Stock Market Index Fund (SWTSX) are two of the largest “total market” index funds in existence and easily two of the most popular among individual investors. SWTSX and FZROX are the core of many investor portfolios and many investors compare FZROX vs SWTSX in order to decide which should be the foundation of their portfolio.

A quick reminder that this site does NOT provide investment recommendations. Fund comparisons (such as this one) are not conducted to identify the “best” fund (since that will vary from investor to investor based on investor-specific factors). Rather, these fund comparison posts are designed to identify and distinguish between the fund details that matter versus the ones that don’t.

The Short Answer

FZROX and SWTSX are extremely similar, except for one major difference which is that FZROX can only be bought and/or owned at Fidelity (which is a non-starter for many investors, including myself even if my accounts were at Fidelity).

The underlying benchmark indices that these funds track are technically different (Dow Jones US Total Stock Market Index vs Fidelity US Total Investable Market Index), but they are identical is most respects. Consequently, the risk and return of FZROX and SWTSX is nearly identical and I consider these two funds equivalent and interchangeable.

The Longer Answer

Historical Performance: FZROX vs SWTSX

SWTSX was launched way back in 1999, while FZROX was launched on August 2, 2018. Since that time, the two funds have had near identical performance: 8.23% vs 8.02% on an annualized basis. Over those years, the cumulative performance differential has been only been about 1.2%!

Differences Between FZROX and SWTSX

Geography

Both the SWTSX and FZROX only include stocks of US-domiciled companies.

Market Capitalization

The two funds have different numbers of holdings (as of 11/30/2022); SWTSX holds 3,516 stocks versus FZROX’s 2,822 stocks. However, the market cap weighting of the funds are identical.

	SWTSX	FZROX
Large Cap	72%	73%
Mid Cap	19%	19%
Small Cap	9%	9%

Sector Weights

The sector weights of each fund are identical, with many sector weights within .10% of each other!

	SWTSX	FZROX
Basic Materials	2.65%	2.67%
Consumer Cyclical	9.86%	10.47%
Financial Services	14.08%	14.01%
Real Estate	3.50%	3.46%
Communication Services	6.74%	6.90%
Energy	5.20%	5.14%
Industrials	9.79%	9.59%
Technology	22.62%	23.15%
Consumer Defensive	6.95%	6.79%
Healthcare	15.58%	14.95%
Utilities	3.04%	2.87%

Factors to Consider

Expenses

FZROX grabbed headlines when Fidelity announced it, due to the 0% expense ratio. While zero expenses is great, it is only .02% less than SWTSX. So even though the difference in expenses is infinite in relative terms, its only three basis points. At a certain level (such as this one), differences in expense ratios do not matter. Since these portfolios are essentially identical, I would most likely lean towards SWTSX.

Tradability

In my view, the most important factor to consider when evaluating SWTSX vs FZROX is the fact that FZROX cannot be bought or owned outside of Fidelity. Personally, this is a non-starter for me as there are reasons to transfer assets to other custodians, such as transferring one’s accounts or making a donation. Some investors may not value flexibility as much, but they should be aware of this limitation.

Transaction Costs

ETFs are free to trade at many brokers and custodians, although many still charge commissions and/or transaction fees to buy/sell mutual funds. As mentioned, FZROX can only be bought and/or held at Fidelity. So if an investor account is at Fidelity, it is free to trade FZROX but trading SWTSX will cost money.

To my knowledge, Schwab does not participate in the pay-to-play arrangements that would allow their mutual funds to trade for free on many platforms. So only accounts at Schwab can trade SWTSX for free and accounts outside of Fidelity cannot trade FZROX at all.

Investors looking for an ETF may want to consider VTI (read our review of VTI vs FZROX here). There is a bid-ask spread when trading ETFs, but this spread is typically less than .01% for SWTSX and individual investor trades will not generally be large enough to “move” the market. In the case of VTI, individual investors should not have a problem trading.

Tax Efficiency & Capital Gain Distributions

Both FZROX and SWTSX routinely make capital gains distributions, so they should be fairly equivalent in terms of tax-efficiency.

Final Thoughts on FZROX & SWTSX

FZROX and SWTSX are nearly identical in most respects. Personally, I would not spend too much time trying to divine which fund is “better.”

That being said, investors should not consider FZROX unless their account is at Fidelity. If my accounts were at Fidelity, I might consider FZROX in a tax-exempt or tax-deferred account. However, I would never buy FZROX in a taxable account due to the inability to transfer the assets (without realizing a potential gain) out of Fidelity if I wanted to move my accounts, donate the shares, etc. Therefore, I believe SWTSX is the better choice for most situations, although investor may want to look at similar ETFs too.

The Schwab S&P 500 Index mutual fund (SWPPX) and the Fidelity ZERO Total Market Index fund (FZROX) are two of the largest mutual funds in existence. SWPPX and FZROX are the core of many investor portfolios. Many investors compare SWPPX vs FZROX in order to decide which should be the foundation of their portfolio.

A quick reminder that this site does NOT provide investment recommendations. Fund comparisons (such as this one) are not conducted to identify the “best” fund (since that will vary from investor to investor based on investor-specific factors). Rather, these fund comparison posts are designed to identify and distinguish between the fund details that matter versus the ones that don’t.

The Short Answer

There are two main differences between SWPPX and FZROX. Firstly, and perhaps most importantly, FZROX can only be bought and owned in Fidelity accounts. Secondly, SWPPX is a large- and mid-cap fund, while FZROX is a total market fund. Despite these differences, the total return between these two funds is pretty close.

The Long Answer

Historical Performance: SWPPX vs FZROX

SWPPX was launched back in 1997, while FZROX was launched on August 2, 2018. Since then, SWPPX has outperformed by about a .7% annually. This is not a huge performance differential, but it does compound over time. The cumulative difference between the two funds since common inception is approximately 4%.

Of course, the outperformance of SWPPX is reflective of large-cap stocks’ dominance over the past five years. If mid-caps and/or small-caps lead, then I suspect FZROX would outperform.

Differences between SWPPX vs FZROX

The biggest difference between SWPPX and FZROX is the market cap exposure of the funds. SWPPX tracks the S&P 500 index which includes mostly large-caps and some mid-caps, while FZROX covers much more of the market by including more mid-caps and small-caps.

Geographic Exposure

Both SWPPX and FZROX hold essentially 100% stocks, so I will not dig into country exposures or market classification here. For intents and purposes, the two funds have identical exposures.

Market Cap Exposure

SWPPX focuses on the S&P 500 index and so it mostly holds large-caps with a bit of mid-cap exposure. FZROX tracks the broader Dow Jones U.S. Total Stock Market Index and so it owns many more mid-caps and small-caps (as of 11/30/2022). In other words, SWPPX is a large-cap vehicle, while FZROX is a total market vehicle. That being said, due to market cap weighting, both funds are overwhelmingly influenced by the large-cap holdings.

	SWPPX	FZROX
Large-Cap	83%	73%
Mid-Cap	16%	19%
Small-Cap	0%	9%

Sector Weights

The sector weights between SWPPX and FZROX are nearly identical. The weights are within 1% for every single sector.

	SWPPX	FZROX
Basic Materials	2.46%	2.67%
Consumer Cyclical	9.56%	10.47%
Financial Services	13.89%	14.01%
Real Estate	2.81%	3.46%
Communication Services	7.28%	6.90%
Energy	5.23%	5.14%
Industrials	9.06%	9.59%
Technology	23.02%	23.15%
Consumer Defensive	7.61%	6.79%
Healthcare	15.90%	14.95%
Utilities	3.18%	2.87%

Factors to Consider

Tradability

In my view, the most important factor to consider when evaluating SWPPX vs FZROX is the fact that FZROX cannot be bought or owned outside of Fidelity. Personally, this is a non-starter for me as there are reasons to transfer assets to other custodians, such as transferring one’s accounts or making a donation. Some investors may not value flexibility as much, but they should be aware of this limitation.

Transaction Costs

Many brokers and custodians still charge commissions and/or transaction fees to buy/sell mutual funds. To my knowledge, neither Schwab nor Fidelity participates in the pay-to-play arrangements (with their competitor custodians) that would allow their mutual funds to trade for free on many platforms. So if an investor account is at Fidelity, it is generally free to trade FZROX; likewise, accounts at Schwab can generally trade SWPPX for free. SWPPX will likely incur trading fees anywhere outside of Schwab, while FZROX cannot be traded at all outside of Fidelity.

It is worth noting that neither fund has a minimum for initial or additional investments. That being said, investors looking for free trades may want to consider an a total market ETF or large-cap ETF, rather than FZROX or SWPPX.

Expenses

FZROX grabbed headlines when Fidelity announced it, due to the 0% expense ratio. While zero expenses is great, it is only .02% less than SWPPX. So even though the difference in expenses is infinite in relative terms, its only two basis points. At a certain level (such as this one), differences in expense ratios do not matter.

Tax Efficiency & Capital Gain Distributions

Both funds have made capital gains distributions in the past and will likely make them in the future. It is not possible to say which one will be more tax-efficient in the future. As index funds, the tax drag on both funds is very low. However, tax-sensitive taxable investors may want to consider using an ETF in lieu of either of these funds.

Final Thoughts: SWPPX vs FZROX

Both SWPPX and FZROX are large, core funds sponsored and managed by two of the largest asset managers in the world (Fidelity and Schwab respectively). Beyond market cap exposures, the funds appear and act very similar. Long-term performance has been nearly identical. I view these two funds as essentially interchangeable and would not spend too much energy splitting hairs to decide which one is “better.”

Should I invest in FZROX or SWPPX?

Due to the reasons outlined above, I believe SWPPX is a better choice than FZROX for most investors’ situations, although investors may want to look at similar ETFs too.

Investors should not consider FZROX at all unless their account is at Fidelity. If my accounts were at Fidelity, I might consider FZROX in a tax-exempt or tax-deferred account. However, I would never buy FZROX in a taxable account due to the inability to transfer the assets (without realizing a potential gain) out of Fidelity if I wanted to move my accounts, donate the shares, etc.

The Fidelity ZERO Large Cap Index mutual fund (FNILX) and the Fidelity ZERO Total Market Index fund (FZROX) are two of the largest mutual funds in existence. FNILX and FZROX are the core of many investor portfolios. Many investors compare FNILX vs FZROX in order to decide which should be the foundation of their portfolio.

A quick reminder that this site does NOT provide investment recommendations. Fund comparisons (such as this one) are not conducted to identify the “best” fund (since that will vary from investor to investor based on investor-specific factors). Rather, these fund comparison posts are designed to identify and distinguish between the fund details that matter versus the ones that don’t.

The Short Answer

What is the difference between FNILX and FZROX?

The main difference between FNILX and FZROX is that FNILX is a large- and mid-cap fund, while FZROX is a total market fund. Despite these differences, the total return between these two funds is pretty close.

Secondly, and perhaps most importantly, both funds can only be bought and owned in Fidelity accounts. Due to this limitation, I would never buy or recommend either of these funds.

The Long Answer

Historical Performance: FNILX vs FZROX

Both FNILX and FZROX were launched in 2018. Since their common inception, FNILX has outperformed by about a half percent annually. This is not a huge performance differential, but it does compound over time. The cumulative difference between the two funds since common inception is approximately 3%.

Of course, the outperformance of FNILX is reflective of large-cap stocks’ dominance over the past five years. If mid-caps and/or small-caps lead, then I suspect FZROX would outperform.

Differences between FNILX vs FZROX

The biggest difference between FNILX and FZROX is the market cap exposure of the funds. FNILX tracks the S&P 500 index which includes mostly large-caps and some mid-caps, while FZROX covers much more of the market by including more mid-caps and small-caps.

Geographic Exposure

Both FNILX and FZROX hold essentially 100% stocks, so I will not dig into country exposures or market classification here. For intents and purposes, the two funds have identical exposures.

Market Cap Exposure

FNILX focuses on the S&P 500 index and so it mostly holds large-caps with a bit of mid-cap exposure. FZROX tracks the broader Dow Jones U.S. Total Stock Market Index and so it owns many more mid-caps and small-caps (as of 11/30/2022). In other words, FNILX is a large-cap vehicle, while FZROX is a total market vehicle. That being said, due to market cap weighting, both funds are overwhelmingly influenced by the large-cap holdings.

	FNILX	FZROX
Large-Cap	83%	73%
Mid-Cap	16%	19%
Small-Cap	0%	9%

Sector Weights

The sector weights between FNILX and FZROX are nearly identical, as of 11/30/2022. The weights are within 1% for every single sector.

	FNILX	FZROX
Basic Materials	2.40%	2.67%
Consumer Cyclical	10.16%	10.47%
Financial Services	13.80%	14.01%
Real Estate	2.77%	3.46%
Communication Services	7.46%	6.90%
Energy	5.12%	5.14%
Industrials	8.86%	9.59%
Technology	23.72%	23.15%
Consumer Defensive	7.40%	6.79%
Healthcare	15.31%	14.95%
Utilities	2.99%	2.87%

Factors to Consider

Tradability

In my view, the most important factor to consider when evaluating FNILX vs FZROX is that neither can be bought or owned outside of Fidelity. Personally, this is a non-starter for me as there are reasons to transfer assets to other custodians, such as transferring one’s accounts or making a donation. Some investors may not value flexibility as much, but they should be aware of this limitation.

Transaction Costs

Many brokers and custodians still charge commissions and/or transaction fees to buy/sell mutual funds. To my knowledge, Fidelity does not participate in the pay-to-play arrangements (with their competitor custodians) that would allow their mutual funds to trade for free on many platforms. So if an investor account is at Fidelity, it is generally free to trade FNILX or FZROX. Other custodians will not allow FNILX or FZROX trades at all!

It is worth noting that neither fund has a minimum for initial or additional investments. That being said, investors looking for free trades may want to consider an a total market ETF or large-cap ETF, rather than FZROX or FNILX.

Expenses

Both FZROX and FNILX grabbed headlines when Fidelity announced it, due to the 0% expense ratio. While zero expenses is great, it is only a few basis points less than similar mutual funds and ETFs. So even though the difference in expenses is infinite in relative terms, its only a few basis points. At a certain level (such as this one), differences in expense ratios do not matter.

Tax Efficiency & Capital Gain Distributions

Both funds have made capital gains distributions in the past and will likely make them in the future. It is not possible to say which one will be more tax-efficient in the future. As index funds, the tax drag on both funds is very low. However, tax-sensitive taxable investors may want to consider using an ETF in lieu of either of these funds.

Final Thoughts: FNILX vs FZROX

Both FNILX and FZROX are large, core funds sponsored and managed by one of the largest asset managers in the world (Fidelity). Beyond market cap exposures, the funds appear and act very similar. Long-term performance has been nearly identical. I view these two funds as essentially interchangeable and would not spend too much energy splitting hairs to decide which one is “better.”

Should I invest in FZROX or FNILX?

I do not believe either fund is appropriate for most investors, except in limited situations. Anyone looking at either of these funds should take a look at these funds competitors, such as VSTAX, SWPPX, VTI, ITOT, and so on.

Investors should not consider either fund unless their account is at Fidelity, as they cannot even buy them. If my accounts were at Fidelity, I might consider the funds in a tax-exempt or tax-deferred account. However, I would never buy them in a taxable account due to the inability to transfer the assets (without realizing a potential gain) out of Fidelity if I wanted to move my accounts, donate the shares, etc.

The Fidelity 500 Index Fund (FXAIX) is one of the largest mutual funds in the world, with multiple share classes that go back decades. In 2018, Fidelity launched the ZERO Large Cap Index Fund (FNILX) which advertises a 0% expense ratio. Investors evaluating FXAIX vs FNILX will be hard-pressed to find many differences beyond the fact that FNILX can only be owned at Fidelity. The funds are nearly identical in every way, except for one major difference: FNILX cannot be bought or owned in non-Fidelity accounts.

A quick reminder that this site does NOT provide investment recommendations. Fund comparisons (such as this one) are not conducted to identify the “best” fund (since that will vary from investor to investor based on investor-specific factors). Rather, these fund comparison posts are designed to identify and distinguish between the fund details that matter versus the ones that don’t.

The Short Answer

There are very few differences between FXAIX and FNILX, except for the fact that FNILX cannot be bought or owned outside of Fidelity.

The underlying benchmark indices that these funds track are technically different (S&P 500 Index vs Fidelity U.S. Large Cap Index), but they are identical is most respects. Consequently, the risk and return of FXAIX and FNILX is nearly identical and I consider these two funds equivalent and interchangeable.

Historical Performance: FXAIX vs FNILX

FXAIX was launched in 1988, while FNILX was launched on September 13, 2018. Since that time, the fund’s have performed nearly identically: 8.62% vs 8.43% annualized. The cumulative performance difference over that time has only been about 1%.

Differences Between FXAIX and FNILX

As the above performance chart shows, the risk and return of the two funds is nearly identical. This is not surprising given the fund composition data below.

Geography

Both the FNILX and FXAIX only include stocks of US-domiciled companies.

Market Capitalization

The two funds have a quite a different number of holdings (as of 11/30/2022); FNILX holds 506 stocks versus FXAIX‘s 503 stocks. However, the market cap weighting of the funds are nearly identical.

	FNILX	FXAIX
Large Cap	84%	83%
Mid Cap	16%	16%
Small Cap	0%	0%

Sector Weights

The sector weights of each fund are nearly identical with most sector weights within 1% of the other fund.

	FNILX	FXAIX
Basic Materials	2.41%	2.40%
Consumer Cyclical	9.95%	10.16%
Financial Services	13.69%	13.80%
Real Estate	2.64%	2.77%
Communication Services	7.53%	7.46%
Energy	5.12%	5.12%
Industrials	8.48%	8.86%
Technology	24.76%	23.72%
Consumer Defensive	7.18%	7.40%
Healthcare	15.38%	15.31%
Utilities	2.86%	2.99%

Factors to Consider

Tradability

In my view, the most important factor to consider when evaluating FXAIX vs FNILX is the fact that FNILX cannot be bought or owned outside of Fidelity. Personally, this is a non-starter for me as there are reasons to transfer assets to other custodians, such as transferring one’s accounts or making a donation. Some investors may not value flexibility as much, but they should be aware of this limitation.

Expenses

FNILX grabbed headlines when Fidelity announced it, due to the 0% expense ratio. While zero expenses is great, it is only .015% less than FXAIX. So ever though the difference in expenses is infinite in relative terms, its only a basis point and a half difference. At a certain level (such as this one), differences in expense ratios do not matter.

Transaction Costs

ETFs are free to trade at many brokers and custodians, although many still charge commissions and/or transaction fees to buy/sell mutual funds. To my knowledge, Fidelity does not participate in the pay-to-play arrangements that would allow their mutual funds to trade for free on many platforms. So if an investor account is at Fidelity, it is free to trade FXAIX or FNILX. Outside of Fidelity, investors cannot trade FNILX and will have to pay to trade FXAIX.

Tax Efficiency & Capital Gain Distributions

Both FXAIX and FXROX routinely makes capital gains distributions, although they are relatively small owing to the fact that they are both index funds. Taxable investors may want to consider ETFs which are generally more tax-efficient and can read our reviews of FXAIX vs VOO or FXAIX vs SPY.

Final Thoughts on FXAIX & FNILX

These two funds are nearly identical, except for the fact that FNILX can only be bought and owned at Fidelity. As mentioned above, I view this a severe limitation and would not consider FNILX for my personal portfolio.