FNILX vs. FXAIX: Which one should you invest in?

Someone asks:

Hi, I’m new to investing and so far mostly only invested in index funds for my Roth IRA. What exactly is the difference between FNILX, a large cap index fund, and FXAIX, a 500 index fund? Seems like the same thing to me. Is it a good idea to invest in both? Or just one or the other?

FNILX vs. FXAIX: What Are the Differences?

  • FNILX is part of Fidelity’s ZERO Fee Index funds. This means it has no expense ratio. Meanwhile, FXAIX charges an extremely low expense ratio of 0.02%. The difference in fee is tiny.
  • FNILX pays dividends once a year (every December). FXAIX distributes dividends every quarter.
  • FXAIX has been around longer than FNILX. Fidelity 500 Index Fund was established in 1988 whereas Fidelity Large Cap Growth Fund was established in 2018.
  • FNILX has 5.61 billion in assets under management. FXAIX has over 399 billion in assets under management.

FNILX vs. FXAIX: How Are They Similar?

  • While the branding is slightly different, both FNILX and FXAIX are essentially the same because they track the S&P 500 Index.
  • FNILX and FXAIX also have the same top 10 holdings.
Apple Inc. AAPL 6.86%
Microsoft Corp. MSFT 6.26%
Amazon Inc. AMZN 3.60%
Alphabet Inc. Cl A GOOGL 2.16%
Tesla Inc. TSLA 2.13%
Alphabet Inc. Cl C GOOG 2.01%
Meta Platforms Inc. FB 1.97%
NVIDIA Corp. NVDA 1.82%
Berkshire Hathaway Inc. Cl B BRK.B 1.36%
UnitedHealth Group Inc. UNH 1.17%

Compare Performance and Returns

Since FNILX is relatively new, we can only show the past 3 years of performance and returns.

Funds Fidelity® ZERO Large Cap Index Fund Fidelity® 500 Index Fund
1 month +3.96% +4.48%
3 months +10.21% +11.02%
6 months +10.71% +11.66%
1 year +26.68% +28.69%
3 years +26.46% +26.06%

An investment of $10,000 in FNILX, since January 2019, now would be worth $20,222.

An investment of $10,000 in FXAIX, since January 2019, now would be worth $20,032.


Which is Better? FNILX or FXAIX?

With such similarity, it shouldn’t matter which one you invest in. If you prefer a mutual fund with a longer track record, then FXAIX is the perfect candidate. If you don’t want to be charged with a fee, go with FNILX.

In the end, both mutual funds still invest in the 500 largest companies on the U.S stock market.

We asked our community of Fidelity investors and here’s what they have to say about FNILX and FXAIX.

Ahmed A:

I prefer FNILX because it’s doing an excellent job tracking the S&P 500 so far. If you have over 100K that you want to invest in, I will go with FXAIX; FNILX does not have much history.

I would also add FSPGX, which more or less tracks NASDAQ 100, and I will add FZILX for the international fund.

Roxy F:

At first I was thinking about selling my FXAIX and putting all that money towards FNILX. I don’t have that many shares but if the two are very similar maybe I’ll be able to have a better return with FNILX since I’ll be able to buy more shares because it’s cheaper? Or should I just keep my FXAIX shares anyway?

Gerry S:

FXAIX is an “official” S&P 500 fund that holds the equities in that index. FNILX technically is not branded with that index so they don’t have to pay Standard and Poor’s any licensing fees, but it essentially has similar securities in it (about 516 last time I checked). This is to keep costs for the ZERO fund as low as possible.

Victor G:

For a taxable brokerage account, buying ETFs would be better than mutual funds. You can replace FNILX or FXAIX with an ETF like VOO.

Laura L:

SPY vs. a Fidelity fund like FXAIX that tracks the S&P 500. Which is better for a taxable investment account and why? Does this change for a tax-sheltered Fidelity IRA?

David J:

FXAIX (0.015) is less expensive than SPY (0.09). I like to keep my expenses low. I don’t need the flexibility of selling anytime that an ETF offers. FNILX is similar and has no expenses.

FNILX is about 1/3 my Roth IRA. I bought it at a high price of $11.62 on 2/7/20 and even with with happened in March I’m up 17.5%.

Chris M:

FXAIX will have more capital gains distributions if in a taxable account. If in an IRA, then regarding taxes, there would be no difference. David describes the fee differences.

Related Comparisons

1 post – 1 participant

Hi! I'm Diego, 38, and I currently reside in New York. I work as a financial analyst. I primarily focus on initiatives involving research and data analysis.

Leave a Comment