Not all index funds are created equal. Some of them have different goals, structure, or fees. For example, the Fidelity Total Market Index Fund (FSKAX) has some advantages over its peer: the Fidelity 500 Index Fund (FXAIX).
In this article, we’ll take a look at how they compare and which one might be better for your needs.
Key Takeaways
FXAIX: Fidelity 500 Index Fund
FXAIX is a mutual fund that tracks the S&P 500, a large-cap index fund composed of approximately 500 stocks. The fund invests in these companies for long-term capital appreciation and income generation.
FXAIX has $326 billion in assets under management (AUM), making it one of Fidelity’s largest index funds.
- Inception date: 2/17/1988
- Minimum to Invest: $0
- Turnover Rate: 2%
- Morningstar Category: Large Blend
- Expense Ratio: 0.02%
- Number of stocks: 500
| COMPANY | SYMBOL | TOTAL NET ASSETS |
|---|---|---|
| Apple Inc. | AAPL | 7.16% |
| Microsoft Corp. | MSFT | 6.01% |
| Amazon.com Inc. | AMZN | 3.38% |
| Tesla Inc. | TSLA | 2.14% |
| Alphabet Inc. Cl A | GOOGL | 2.00% |
| Alphabet Inc. Cl C | GOOG | 1.84% |
| Berkshire Hathaway Inc. Cl B | BRK.B | 1.56% |
| UnitedHealth Group Inc. | UNH | 1.46% |
| Johnson & Johnson | JNJ | 1.32% |
| NVIDIA Corp. | NVDA | 1.30% |
| Technology | 28.09% |
| Financials | 15.34% |
| Health Care | 12.52% |
| Consumer Services | 12.30% |
| Industrials | 10.93% |
| Consumer Goods | 9.21% |
| Oil & Gas | 4.82% |
| Utilities | 3.05% |
| Basic Materials | 1.90% |
| Telecommunications | 1.18% |
| Income dividend | $0.58 |
| Dividend frequency | Quarterly |
FSKAX: Fidelity Total Market Index Fund
FSKAX’s investing strategy is comparatively simple: it invests in almost all U.S. investible stocks. As a result, there are nearly 4,000 different securities in the fund’s portfolio.
The current expense ratio of FSKAX is 0.02%, similar to FXAIX. However, its net assets in considerably much lower ($58 billion AUM).
- Inception date: September 8, 2011
- Minimum to Invest: $0
- Turnover Rate: 3%
- Morningstar Category: Large Blend
- Expense Ratio: 0.02%
- Number of stocks: 4027
| COMPANY | SYMBOL | TOTAL NET ASSETS |
|---|---|---|
| Apple Inc. | AAPL | 6.06% |
| Microsoft Corp. | MSFT | 5.09% |
| Amazon.com Inc. | AMZN | 2.86% |
| Tesla Inc. | TSLA | 1.81% |
| Alphabet Inc. Cl A | GOOGL | 1.70% |
| Alphabet Inc. Cl C | GOOG | 1.56% |
| Berkshire Hathaway Inc. Cl B | BRK.B | 1.32% |
| UnitedHealth Group Inc. | UNH | 1.23% |
| Johnson & Johnson | JNJ | 1.11% |
| NVIDIA Corp. | NVDA | 1.10% |
| Technology | 25.96% |
| Financials | 16.60% |
| Health Care | 12.27% |
| Consumer Services | 12.10% |
| Industrials | 11.71% |
| Consumer Goods | 8.69% |
| Oil & Gas | 4.86% |
| Utilities | 2.97% |
| Basic Materials | 2.15% |
| Non Classified Equity | 1.44% |
| Income dividend | $0.18 |
| Dividend frequency | Semiannual |
FXAIX vs. FSKAX: Differences and Similarities
Both FXAIX and FSKAX are passively managed mutual funds. Therefore, neither will try to beat the market. Instead, they follow their respective benchmark.
FXAIX and FASKA also have the same expense ratio of 0.02%.
The underlying benchmark is where FXAIX and FSKAX diverge most. While FSKAX tracks the Dow Jones U.S. Total Stock Market Index, FXAIX tracks the S&P 500 Index. As a result, FXAIX only invest in large-cap stocks, whereas FSKAX include small-, mid-, and large-cap stocks altogether under its portfolio.
Is FSKAX a Better Investment Than FXAIX?
FSKAX is a better choice for those who favor diversification. As you can see, the difference between a portfolio of 500 and 4000 stocks is significant.
Large-cap stocks dominate the current market. But it’s impossible to predict when small- or mid-cap stocks may outperform again. Consequently, it is a wiser investment to have a diversified portfolio.
💬 Community Discussion
Todd G:
FSKAX is the total US market. It contains more exposure to mid and small caps. It contains nearly 4000 stocks. FXAIX is the S&P 500 which is the 500 largest US companies by market cap.
Unless it’s in a tax advantaged account, I prefer the ETF version and usually go for Vanguard. I’d choose VTI which is the total US market.
Dave C:
You can really consider them to both be the same, even though obviously one holds 500 companies and the other a few thousand. Their returns long term are so close together that it really doesn’t make much difference. I go with VTI, a total stock market ETF, but really a S&P 500 index would be almost the same return.
Andrew G:
I vote FSKAX because it has the extended market in it. But either is fine. I have a slight preference for FSKAX as they have mid and small caps. They’re slightly riskier so I’d expect a higher return from them.
Ian S:
I have FXIAX in my Roth IRA (I’m 27 and have only been using the Roth for two years- recently switched to FXIAX from individual stocks). I’m using my main account for individual stock picks and selling options. Knowing the Roth IRA is low maintenance makes for stress free time.
John D:
They are so closely correlated that it’s not going to matter much. I go with FSKAX because it has the most holdings and more exposure to small caps.
A combination of FSKAX and FTIHX basically gives you every stock in the world. Guaranteed to hold the next Amazon. The ETF VT has the same benefit.