Eric RosenbergBy Eric Rosenberg, WCI Contributor

When investing in Fidelity mutual funds, you may come across two highly rated large-cap funds, both good enough to make deciding between the two a head-scratcher. FNILX, the Fidelity ZERO Large Cap Index Fund, is a fund focused on large stocks with zero transaction fees for Fidelity customers and no management fees. FXAIX, the Fidelity 500 Index Fund, is Fidelity’s version of the S&P 500 index fund and charges extremely low fees.

Here’s a closer look at FNILX vs. FXAIX to help you decide which, or what combination, makes the most sense for your investment goals.


What Is a Fidelity Mutual Fund?

Fidelity is one of the largest asset management companies in the United States. It’s known for offering robust brokerage services alongside its family of low-cost mutual funds and exchange-traded funds (ETFs). As of this writing, Fidelity holds $4.2 trillion in customer assets in its investment products and $11.1 trillion under administration.

If you're new to investing, you may need to learn how mutual funds work. Mutual funds are a basket of investments where you get exposure to all holdings with a single investment. Trades are executed daily at the end of the day based on the total value of assets held in the fund. This differs slightly from exchange-traded funds (ETFs), which trade near-instantly during market hours, similar to stocks.

Both are often a good choice for long-term goals, such as investing for retirement or a child’s education. Here’s an in-depth summary of FNILX vs. FXAIX, both popular mutual funds available through Fidelity and other brokerages supporting Fidelity mutual funds.

More information here:

How Do You Evaluate and Compare Mutual Funds and Exchange Traded Funds?


What Is FNILX?

FNILX is a mutual fund ticker symbol for the Fidelity ZERO Large Cap Index Fund. It’s one of a very small list of mutual funds, all from Fidelity, that doesn't charge an expense ratio. Most mutual funds charge a percentage of your holdings annually as a fee, but the ZERO family of funds has an expense ratio of 0.00%.

As of July 2023, the fund held 515 stocks, with the top 10 making up about 30% of all holdings. The top holdings include Apple, Microsoft, Amazon, NVIDIA, Alphabet (A and C class shares), Tesla, Meta, Berkshire Hathaway, and UnitedHealth.

The fund was founded in 2018, and it performs nearly identically to the Fidelity US Large Cap index. The market-weighted index focuses on US stocks in the large-cap category. Over the last three years, the fund nearly mimics the S&P 500 index. Over a longer period, it modestly lags the S&P 500.

It earns a three-star rating from Morningstar. Assets in the portfolio are slightly about $6.5 billion. It’s generally a solid choice, particularly when you consider fees. However, compared to the S&P 500, its performance leaves something to be desired.


What Is FXAIX?

fnilx vs fxaix

FXAIX is the ticker symbol for the Fidelity 500 Index Fund. The Fidelity 500 is Fidelty’s version of the S&P 500-indexed mutual fund. The fund has an extremely similar makeup to the fund above, with 506 holdings and the top 10 making up about 30% of assets.

Top holdings include Apple, Microsoft, Amazon, NVIDIA, Alphabet (Class A and C shares), Tesla, Meta, Berkshire Hathaway, and UnitedHealth. That’s identical to the fund discussed above.

The Fidelity 500 follows the S&P 500 performance almost exactly and outperforms the large blend category over time.

Morningstar gives FXAIX an impressive five-star rating. It’s one of the cheapest funds in the S&P 500 mutual fund category, charging an expense ratio of just 0.015% annually. The total assets in the fund are approximately $420 billion.


FNILX vs. FXAIX: Which Should I Choose?

FNILX and FXAIX are both highly regarded and low-fee large-cap index funds. The choice between the two comes down to fees and performance.

For fees, FNILX is the winner with a 0% expense ratio. However, FXAIX isn’t an expensive fund with a fee of just 0.015%. You’ll pay a little more for FXAIX, but you won’t see a huge variance when you look at performance.

Looking at the five-year performance history, which is about as old as FXAIX goes back, an investment in the S&P 500 would be slightly better (largely due to a few months of great performance before FNILX started). Over the past three years, the difference has been almost negligible. One-year performance is nearly identical. Year-to-date, for the first half of 2023, FNILX has a slight advantage.

Note: click on the below chart (which shows the three-year performance comparison, via Fidelity) to enlarge it.

FNILK vs FXAIX comparison

Since they have nearly the same stocks, it’s no shock to see the trend lines follow a similar pattern.

More information here:

FSKAX vs. FXAIX: Which Fidelity Fund Is Best?

FXAIX vs. VOO: Which Index Fund Is Best?


FNILX vs. FXAIX: Which Is Better?

Sorry to disappoint if you’ve read this far, but the difference between FNILX and FXAIX is too close to call. FNILX wins for lower fees, and FXAIX has an edge for its long-term performance. The difference almost comes out in the wash, with only a few different holdings between the two.

For my money, I might split up my investment between the two. I love the concept of 0% expense ratios, but the S&P 500 is the main workhorse of my portfolio. Going with either, though, could be a solid decision, particularly if you’re already investing with accounts at Fidelity. As long as you’re investing regularly, you should do well with either fund for your long-term investment goals.


If you need extra help with planning for retirement or have
questions about the best way to save your money in tax-protected accounts, hire a WCI-vetted professional to help you figure it out.


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