The Vanguard S&P 500 Index Fund (VFIAX) and the Fidelity Total Stock Market Index fund (FSKAX) are two of the largest mutual funds in existence. VFIAX and FSKAX are the core of many investor portfolios. Many investors compare VFIAX vs FSKAX 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

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

The Long Answer

Historical Performance: VFIAX vs FSKAX

VFIAX was launched on November 13, 2000, while FSKAX was launched on September 8, 2011 (although other shares classes of the fund existed prior to that). Since then, VFIAX 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 just over 16%.

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

Differences between VFIAX vs FSKAX

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

Geographic Exposure

Both VFIAX and FSKAX 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

VFIAX focuses on the S&P 500 index and so it mostly holds large-caps with a bit of mid-cap exposure. FSKAX 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, VFIAX is a large-cap vehicle, while FSKAX is a total market vehicle. That being said, due to market cap weighting, both funds are overwhelmingly influenced by the large-cap holdings.

	VFIAX	FSKAX
Large-Cap	84%	73%
Mid-Cap	16%	19%
Small-Cap	0%	9%

Sector Weights

The sector weights between VFIAX and FSKAX are nearly identical, as of 11/30/2022. The weights are within 1% of each other for every single sector.

	VFIAX	FSKAX
Basic Materials	2.46%	2.68%
Consumer Cyclical	9.57%	10.43%
Financial Services	13.84%	14.04%
Real Estate	2.80%	3.46%
Communication Services	7.28%	6.91%
Energy	5.23%	5.13%
Industrials	9.06%	9.58%
Technology	23.04%	23.18%
Consumer Defensive	7.61%	6.77%
Healthcare	15.92%	14.97%
Utilities	3.19%	2.87%

Transaction Costs

Many brokers and custodians still charge commissions and/or transaction fees to buy/sell mutual funds. To my knowledge, neither Fidelity nor Vanguard 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 FXAIX; similarly, VFIAX is generally free to trade at Vanguard.

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 FSKAX or VFIAX.

Expenses

Some investors may point out that the expense ratios between FSKAX and VFIAX differ. This is true, but it is also reflected in the net performance chart above. At a certain level, differences in expense ratio do not matter that much. In this case, the difference in expenses is hundredths of a percent, so no need to compare or split hairs.

Tax Efficiency & Capital Gain Distributions

FSKAX regularly makes capital gains distributions, while VTSAX does not make capital gains distributions (nor do I expect it to, due to Vanguard’s fund structure). FSKAX is an index fund and therefore pretty tax-efficient; however, VFIAX is the more tax-efficient option.

Final Thoughts: VFIAX vs FSKAX

Both VFIAX and FSKAX are large, core funds sponsored and managed by some of the largest asset managers in the world (Vanguard and 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.”

One consideration that might tip the scales is where the investors’ account is. Unlike ETFs, many mutual funds are still subject to trading fees and/or short-term redemption fees. So if my accounts were at Vanguard, I might lean more towards VFIAX. If my accounts were at Fidelity, I might favor FSKAX. If my account wasn’t at Vanguard or Fidelity, I’d probably use an ETF for free trading and tax-efficiency. But overall, these two funds are very similar and I wouldn’t worry too much about picking the “right” one.

The Vanguard S&P 500 Index Fund (VFIAX) 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 VFIAX vs FNILX will be hard-pressed to find many differences, but there are a few. 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 VFIAX and FNILX, except for the fact that FNILX cannot be bought or owned outside of Fidelity. The other major difference is that the VFIAX is quite a bit more tax-efficient.

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 VFIAX and FNILX is nearly identical and I consider these two funds equivalent and interchangeable.

Historical Performance: VFIAX vs FNILX

VFIAX was launched in 2000, while FNILX was launched on September 13, 2018. Since that time, the fund’s have performed nearly identically: 8.43% vs 8.59% annualized. The cumulative performance difference over that time has been less than 1%.

Differences Between VFIAX 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 VFIAX only include stocks of US-domiciled companies.

Market Capitalization

The two funds have approximately the same number of holdings and the market cap weighting of the funds are nearly identical.

	FNILX	VFIAX
Large Cap	84%	84%
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	VFIAX
Basic Materials	2.41%	2.46%
Consumer Cyclical	9.95%	9.57%
Financial Services	13.69%	13.84%
Real Estate	2.64%	2.80%
Communication Services	7.53%	7.28%
Energy	5.12%	5.23%
Industrials	8.48%	9.06%
Technology	24.76%	23.04%
Consumer Defensive	7.18%	7.61%
Healthcare	15.38%	15.92%
Utilities	2.86%	3.19%

Factors to Consider

Tradability

In my view, the most important factor to consider when evaluating VFIAX 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 .03% less than VFIAX. So ever though the difference in expenses is infinite in relative terms, its only a three basis point 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 Vanguard, it is free to trade VFIAX. If at Fidelity, it is free to trade FNILX. Outside of Fidelity, investors cannot trade FNILX and will have to pay to trade VFIAX (unless at Vanguard). Thus, investors may want to consider using an ETF.

Tax Efficiency & Capital Gain Distributions

FXROX 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). Thus, VFIAX is the more tax-efficient choice. Taxable investors may want to consider ETFs which are generally more tax-efficient and can read our reviews of VFIAX vs VOO or VFIAX vs SPY.

Final Thoughts on VFIAX & FNILX

VFIAX and FNILX 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.

The Fidelity ZERO Large Cap Index Fund (FNILX) and the Fidelity Total Stock Market Index fund (FSKAX) are two of the largest mutual funds in existence. FNILX and FSKAX are the core of many investor portfolios. Many investors compare FNILX vs FSKAX 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 FNILX and FSKAX. Firstly, FNILX is a large- and mid-cap fund, while FSKAX is a total market fund. Despite these differences, the total return between these two funds is pretty close.

Secondly, and perhaps more importantly, FNILX cannot be bought or owned outside of Fidelity.

The Long Answer

Historical Performance: FNILX vs FSKAX

FSKAX was launched on September 8, 2011 (although other shares classes of the fund existed prior to that), while FNILX was launched in September 2018. Since then, FNILX has outperformed by about a .6% 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 3.5%.

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

Differences between FNILX vs FSKAX

The biggest difference between FNILX and FSKAX 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 FSKAX covers much more of the market by including more mid-caps and small-caps.

Geographic Exposure

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

Market Cap Exposure

FNILX focuses on the Fidelity US Large Cap Index and so it mostly holds large-caps with a bit of mid-cap exposure. FSKAX 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 FSKAX is a total market vehicle. That being said, due to market cap weighting, both funds are overwhelmingly influenced by the large-cap holdings.

	FNILX	FSKAX
Large-Cap	84%	73%
Mid-Cap	16%	19%
Small-Cap	0%	9%

Sector Weights

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

	FNILX	FSKAX
Basic Materials	2.41%	2.68%
Consumer Cyclical	9.95%	10.43%
Financial Services	13.69%	14.04%
Real Estate	2.64%	3.46%
Communication Services	7.53%	6.91%
Energy	5.12%	5.13%
Industrials	8.48%	9.58%
Technology	24.76%	23.18%
Consumer Defensive	7.18%	6.77%
Healthcare	15.38%	14.97%
Utilities	2.86%	2.87%

Factors to Consider

Tradability

In my view, the most important factor to consider when evaluating FSKAX 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

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 FSKAX and FNILX; other custodians will likely charge a fee to trade Fidelity mutual funds.

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

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 FSKAX. 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.

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 FSKAX

Both FNILX and FSKAX 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.”

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, FSKAX or FNILX? I believe FSKAX is better than FNILX in most situations. Personally, I would never buy or recommend FNILX due to the limitations.

The Fidelity Total Stock Market Index fund (FSKAX) 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 FSKAX are the core of many investor portfolios and many investors compare FSKAX 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

There are very few differences between the two funds, since both FSKAX and SWTSX track the Dow Jones US Total Market Index. Consequently, the risk and return of FSKAX and SWTSX 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: are SWTSX and FSKAX the same?

Technically, SWTSX and FSKAX are different funds. But for all intents and purposes, SWTSX and FSKAX are identical. Both funds are broad-based indices that represent the US equity markets.

Historical Performance: FSKAX vs SWTSX

SWTSX was launched in 1999, while FSKAX was launched on September 7, 2011 (although other share classes of the Fidelity fund existed prior to this date). Since that time, the two funds have had identical performance: 12.65% vs 12.61% on an annualized basis. Over those 11 years, the cumulative performance differential has been less than 2%!

Differences Between FSKAX and SWTSX

Geography

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

Market Capitalization

The two funds have a similar number of holdings (as of 11/30/2022); SWTSX holds 3,516 stocks versus FSKAX’s 3,989 stocks. Perhaps not surprisingly, the market cap weighting of the funds are identical.

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

Sector Weights

The sector weights of each fund are nearly identical, with many sector weights within .05% of each other!

	SWTSX	FSKAX
Basic Materials	2.65%	2.66%
Consumer Cyclical	9.86%	10.43%
Financial Services	14.08%	14.04%
Real Estate	3.50%	3.46%
Communication Services	6.74%	6.91%
Energy	5.20%	5.13%
Industrials	9.79%	9.58%
Technology	22.95%	23.18%
Consumer Defensive	6.95%	6.77%
Healthcare	15.58%	14.97%
Utilities	3.04%	2.87%

Factors to Consider

Expenses

Some investors may point out that the expense ratios between FSKAX and SWTSX differ. This is true, but it is also reflected in the net performance chart above. At a certain level, differences in expense ratios do not matter. A small absolute difference (in basis points) is essentially meaningless (even if it appears large on a percentage basis).

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, neither Schwab nor Fidelity participates 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 FSKAX; However, only accounts at Schwab can trade SWTSX for free.

Investors looking for free trades may want to consider an ETF, as ETFs are free to trade on most platforms including Schwab and Fidelity.

Tax Efficiency & Capital Gain Distributions

Both FSKAX and SWTSX routinely makes capital gains distributions.

Again, tax-sensitive investors may want to consider an ETF. Both FSKAX and SWTSX are relatively tax-efficient since they are index funds, but an ETF is likely to be even more tax-efficient.

Final Thoughts on FSKAX & SWTSX

FSKAX and SWTSX are nearly identical. Personally, I would not spend too much time trying to divine which is “better” and would just choose whichever makes more sense for my portfolio based on the above factors.

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.