Fidelity seems to be winning the race to zero for fees on index funds. Here we'll check out the 5 best Fidelity index funds for investors in 2023.
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Introduction – Fidelity Index Funds
Fidelity is one of the oldest and largest brokerage firms out there, closely rivaling and in some cases even beating Vanguard and Schwab on things like fees, fractional shares, margin rates, etc.
Fidelity has made a concerted effort of lowering its fees on its broad index funds in recent years, which in some instances are now the cheapest game in town, such as with their small line of ZERO funds with zero fees. Their mutual funds also have no minimum investment requirement, unlike Vanguard.
Note that so far Fidelity has kept its broad stock market index offerings (e.g. S&P 500, total U.S. stock market, etc.) as mutual funds; they don't have ETFs available for these yet. So all the funds on this list are mutual funds. They do have some very affordable sector ETFs that I covered in a separate post here.
Where applicable, I've included the comparable ZERO fund, but just remember I detailed here how you cannot buy or transfer those outside of Fidelity, so keep that in mind.
Let's dive into the best Fidelity index funds.
FXAIX – Fidelity 500 Index Fund
FXAIX is Fidelity's offering for the famous S&P 500 Index, roughly the 500 largest profitable publicly traded companies in the United States. As such, this fund is entirely U.S. large cap stocks, though it's considered a sufficient proxy for the entire U.S. stock market. This fund has about 500 holdings and an expense ratio of 0.015%.
The comparable Fidelity ZERO fund for this market segment is FNILX.
FSKAX – Fidelity Total Market Index Fund
FSKAX goes a bit further and includes small and mid caps within the U.S., thereby capturing the entire U.S. stock market via the Dow Jones U.S. Total Stock Market Index. This fund has about 4,000 holdings and an expense ratio of 0.015%.
The comparable Fidelity ZERO fund for this market segment is FZROX.
FSGGX – Fidelity Global ex US Index Fund
FSGGX allows investors to get international exposure to the global stock market outside the U.S. by tracking the MSCI ACWI ex USA Index. This fund has about 2,400 holdings and a fee of 0.055%.
The comparable Fidelity ZERO fund for this market segment is FZILX.
FISVX – Fidelity Small Cap Value Index Fund
Many investors, myself included, like to overweight small cap value stocks relative to their market cap weight for greater expected returns. Fidelity's index fund for this market segment is FISVX, which seeks to track the Russell 2000 Value Index. This fund has about 1,400 holdings and a fee of 0.05%.
FXNAX – Fidelity U.S. Bond Index Fund
FXNAX is an index fund for the total U.S. bond market for those wanting some asset class diversification outside stocks. This fund has an effective intermediate duration of about 6 years and seeks to track the Bloomberg U.S. Aggregate Bond Index. FXNAX has a fee of 0.025%.
Do you own any of these Fidelity index funds? Let me know in the comments.
Don't want to do all this investing stuff yourself or feel overwhelmed? Check out my flat-fee-only fiduciary friends over at Advisor.com.
Disclaimer: While I love diving into investing-related data and playing around with backtests, this is not financial advice, investing advice, or tax advice. The information on this website is for informational, educational, and entertainment purposes only. Investment products discussed (ETFs, mutual funds, etc.) are for illustrative purposes only. It is not a recommendation to buy, sell, or otherwise transact in any of the products mentioned. I always attempt to ensure the accuracy of information presented but that accuracy cannot be guaranteed. Do your own due diligence. I mention M1 Finance a lot around here. M1 does not provide investment advice, and this is not an offer or solicitation of an offer, or advice to buy or sell any security, and you are encouraged to consult your personal investment, legal, and tax advisors. All examples above are hypothetical, do not reflect any specific investments, are for informational purposes only, and should not be considered an offer to buy or sell any products. All investing involves risk, including the risk of losing the money you invest. Past performance does not guarantee future results. Opinions are my own and do not represent those of other parties mentioned. Read my lengthier disclaimer here.
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