FSKAX or FZROX for a Roth IRA? Looking for a 25 year investment. I’m 33 years old.
FSKAX is the ticker symbol for Fidelity Total Market Index Fund. It was established in 1997 and currently holds over 3,900 stocks in its portfolio.
FZROX (Fidelity ZERO Total Market Index Fund), on the other hand, is a newer fund (launched in 2018) by Fidelity Investments. Similar to FSKAX, the goal of this fund is to track the performance of a broad range of U.S stocks.
There are two primary differences between FSKAX and FZROX: their expense ratio and the ability for investors to transfer assets to another investment firm.
FZROX is one of Fidelity’s ZERO Index Funds. As a result, it does not charge any fee to investors. Meanwhile, FSKAX charges 0.02% per year.
Transfer of Assets
If for whatever reason you no longer want to keep your investments with Fidelity, you can always transfer them out and into another brokerage. With a mutual fund like FSKAX, you shouldn’t have any problem.
However, with a mutual fund exclusively designed for Fidelity investors like FZROX, that is impossible.
You can’t transfer your shares of FZROX to another firm without selling your holding. And by doing so, you may have to pay taxes on your capital gains. If it was in a retirement account like a Roth IRA, you don’t have to worry about that.
- Both mutual funds invest its assets in stocks included in the Dow Jones U.S Total Stock Market Index.
- Because they track the same index, FSKAX and FZROX have the same top 10 holdings.
|COMPANY||SYMBOL||TOTAL NET ASSETS|
|Alphabet Inc. Cl A||GOOGL||1.84%|
|Alphabet Inc. Cl C||GOOG||1.73%|
|Meta Platforms Inc.||FB||1.67%|
|Berkshire Hathaway Inc. Cl B||BRK.B||1.10%|
|JPMorgan Chase & Co.||JPM||1.02%|
|Funds||Fidelity® Total Market Index Fund||Fidelity® ZERO Total Market Index Fund|
We asked our community of Fidelity investors and here’s what they have to say about FSKAX and FZROX.
Let’s find out which fund is a better investment for your portfolio.
Everyone in here likes FSKAX. It has longer history of returns and more companies but I use FZROX due to expenses.
If it’s a taxable account, FSKAX. I should mention that ETFs are usually more tax efficient. So, if you can resist the urge to trade it, VTI would be the best in a taxable account.
Doesn’t matter so much in a IRA. I personally go with FSKAX that tracks a more traditional index and has 1100 more holdings. At .015% expense ratio, FSKAX is already basically free.
FZROX doesn’t have a long track record, so we can’t be certain how well it tracks the total market. As a result, any comparison would be pure conjecture. FSKAX has about 1,000 more holdings. Will they make a difference? If small and mid caps outperform the next 25 years, I say FSKAX may outperform (though the difference would be truly negligible). We won’t be able to answer for at least another 10 years.
I used to invest in FZROX, and it was doing well. Then I saw everyone was talking about VTSAX vs VTI, so I started buying VTI. Fidelity charges high fees for buying VTSAX, but VTI is nominal fee.
A lot of people like the ZERO funds, but personally, I do not. They’re designed to perform like their relative index, but FZROX is missing over 1,000 securities that are in FSKAX.
The ZERO funds are a marketing gimmick. They work, but I stay away from them. I’ve heard that the ZERO funds actually lose money for Fidelity, so who knows how long the funds will exist.