The Fidelity ZERO Large Cap Index Fund (FNILX) and Vanguard S&P 500 ETF (VOO) are both index funds that invest in large-cap U.S. companies.
Both offer low fees and broad diversification with a comparable investment strategy.
However, there are also some differences between FNILX and VOO. Let’s see which is fitting for your portfolio.
FNILX: Fidelity ZERO Large Cap Index Fund
If you want to invest in the S&P 500, the Fidelity ZERO Large Cap Index Fund may be a good option for you.
FNILX is a mutual fund that tracks the performance of large-cap stocks and has an expense ratio of 0%. That is correct, ZERO percent!
Furthermore, the minimum investment amount required is also $0. This means you can get a piece of the entire basket of large-cap stocks for as low as $10.
VOO: Vanguard Vanguard S&P 500 ETF
VOO is an exchange-traded fund (ETF) that tracks the S&P 500 index. This fund charges an annual fee of 0.03%, which means that if you invest $10,000 in VOO today, your total yearly cost would be $3.
The biggest asset VOO holds in its portfolio is Apple (AAPL), which makes up about 7% of the fund. Microsoft Corporation (MSFT) is the second largest holding at just over 6%.
In addition, companies like Amazon, Tesla, Alphabet, Johnson and Johnson, and Nvidia are in the top 10 holdings.
FNILX vs VOO: Key differences
There are some key differences between these two funds.
Type of fund
FNILX is a mutual fund while VOO is an exchange-traded fund (ETF). That means you can trade VOO shares throughout the trading day. FNILX, on the other hand, can only be bought and sold after the market close.
But it doesn’t end there. Here comes the exciting part. FNILX charges no fee to investors, whereas Vanguard charges an annual fee of 0.03% for its S&P 500 ETF.
The difference in cost between FNILX and VOO may seem small now, but it may add up over time.
FNILX is only available for purchase through Fidelity’s brokerage platform, while VOO trades on an exchange like any other stock or ETF.
FNILX vs VOO: Which Fund Is Better?
FNILX has delivered 3-year annualized returns of 10.58% as of 09/16/2022 compared with 10.67% for VOO.
If performance is a deciding factor for some, it is not the case here. Both index funds have identical annualized returns.
For the most part, FNILX and VOO are the same. They hold similar, if not the exact, stocks in their portfolio.
FNILX does not explicitly say that the fund follows the S&P 500 index. But you can just look at their entire portfolio and confirm.
If you want to avoid the most fee possible, I would go with FNILX. There is no yearly fee paid to Fidelity and you still get the same performance as the Vanguard S&P 500 ETF (VOO).