What’s better for a Roth. FZROX or FXAIX? Need some advice and help. I am rolling over pre-tax 401k money into a Fidelity retirement account. I have 17,248 dollars to invest.
- FZROX invests 80% of its assets in the overall US equity market, which includes small, mid, and large-cap stocks. It tracks the total return of a broad range of U.S stocks.
- FXAIX focuses on stocks included in the S&P 500 Index.
- FZROX is a no-expense fee mutual fund. FXAIX has an expense ratio of 0.02%.
- FXAIX pays dividends every quarter while FZROX pays dividends at the end of the year.
- FZROX lends securities in order to generate income for the fund.
- Both FZROX and FXAIX are mutual funds from Fidelity.
- They have a minimum initial investment of $0. This means you can start investing with as little as $1.
- Morningstar classified FZROX and FXAIX as “Large Blend.” This means they have similar compositions.
- Their top 10 holdings include Apple, Microsoft, Amazon, Google, Tesla, Facebook, Nvidia, Berkshire Hathaway, and UnitedHealth.
We asked our community of Fidelity investors and here’s what they have to say about FZROX and FXAIX.
Let’s find out which fund is a better investment for your portfolio.
I prefer FZROX because it follows the extended market. It’s a bit riskier and better priced, so I expect it to deliver slightly higher returns.
FZROX is a blend fund that captures both growth and value stocks. It likely contains most, if not all, of the holdings in the other funds. If you intend to tilt your portfolio towards value stocks, adding funds like those you’ve mentioned makes sense.
If that’s not the reason, then, in my opinion, you have plenty of broad-market domestic diversification through FZROX already. If increasing diversification is your aim, I’d recommend looking at international stocks.
FZROX is more diversified than the S&P 500 index fund. It represents more companies.
FXAIX has done great for me so far. It’s almost always green!
FZROX and FZILX basically hold all of the world’s stocks (except a few small caps). Anything you add to it is a tilt toward a particular segment of the market.
If you have FZROX and FZILX, you’ve covered both domestic and international markets.
The returns will be roughly the same. FZROX just includes small and mid-size companies too. Where FXAIX just includes a little over 500 companies from the S&P 500. Both are good choices for long-term investing. You can compare FXAIX vs. FSKAX, which has been around longer, and see how those returns compare.
One or the other is fine. They are so close together it is impossible to tell which will outperform the other, and it will be so minor as to be inconsequential. Just pick one, but pointless to own both.