Choosing between SPAXX and FZFXX shouldn’t be difficult.
These two are the most popular core positions on Fidelity.
New investors frequently wonder which is preferable. There is an easy solution.
Simply choose one and go with it.
However, if you want to hear my reasoning, keep on reading.
In this article, I will compare the difference between SPAXX and FZFXX.
SPAXX: Fidelity Government Money Market Fund
SPAXX is a government money market fund from Fidelity that invests in short-term U.S. government securities, certificates of deposit and commercial paper.
The fund is designed to provide stability and liquidity while preserving capital. It has an annual management fee (net) of 0.10%.
FZFXX: Fidelity Treasury Money Market Fund
Fidelity Treasury Money Market Fund (FZFXX) is a mutual fund that invests in U.S. Treasury securities.
Like SPAXX, FZFXX invests in short-term treasury bills, notes, and repurchase agreements.
The fund currently has an expense ratio (net) of 0.15%.
SPAXX vs FZFXX: Key differences
The main difference between SPAXX and FZFXX is the net expense ratio.
SPAXX charges 0.10% per year while FZFXX charges investors 0.15%. The difference is insignificant, though.
Both mutual funds aim to provide investors with a stable net asset value (NAV) of $1 per share.
In plain English, think of SPAXX and FZFXX as a bank that holds your money.
SPAXX vs FZFXX: Which Is Better?
Both are identical mutual funds. The goals of SPAXX and FZFXX are to help investors preserve capital and liquidity before funds get deployed into the next investment. That could be stocks, index funds, or even options.
As mentioned above, Fidelity money market funds like SPAXX are there to help hold your uninvested cash.
Aside from that, they do not return any meaningful gains.
In fact, the money you have in SPAXX or FZFXX is losing to inflation.