In this article, we will explore the difference between FNILX vs FXAIX.
Choosing between Fidelity's ZERO Large Cap Index Fund (FNILX) and Fidelity's 500 Index Fund (FXAIX) can be challenging.
Fidelity ZERO Large Cap Index Fund, FNILX, is a newer fund focusing on long-term growth. The fund invests in several sectors and has a zero percent expense ratio.
Fidelity 500 Index Fund, FXAIX, is a popular fund with a low expense ratio. In addition, unlike other index funds, it has a low turnover rate.
This comparison will make it easy to decide which is right for you.
FNILX vs FXAIX
The main difference between FNILX and FXAIX is the index they track. FNILX tracks the Fidelity U.S. Large Cap Index, while FXAIX tracks the S&P 500 Index. Another significant difference is their expense ratio. FNILX has a 0% expense ratio, while the expense ratio for FXAIX is 0.015%.
FNILX = Tracks 80% of the Fidelity U.S. Large Cap Index and has 503 holdings
FXAIX = Tracks 80% of the S&P 500 and has 508 holdings
FNILX
- Tracks The Fidelity U.S. Large Cap Index
- Expense Ratio: 0%
- No Minimum Investment
- Holds 503 Stocks
- Is a Mutual Fund
- Offered By Fidelity
FXAIX
- Tracks 80% Of The S&P 500 Index
- No Minimum Investment
- Fund Inception: 1988
- Expense Ratio: 0.015%
- Number Of Stocks: 508
- Similar ETF (VOO)
Now, let's keep comparing FNILX and FXAIX.
FNILX vs FXAIX Performance
Fidelity's FNILX and FXAIX have had almost identical performance returns over the last 3 years. FNILX has had slightly better returns but only by 0.14% annually.
We can only compare FNILX and FXAIX's performance over the last 3 years since FNILX is still a new fund. In addition, FNILX's inception date was in 2018.
FXAIX has had strong performance returns over the last 10 years, with over 14% annual returns. This is in line with the performance of the S&P 500.
Here is how FNILX and FXAIX performance compares on a chart:
Again, the performance overlaps closely for both funds. FNILX just got to a late start.
Are FNILX and FXAIX The Same?
FNILX and FXAIX are not the same funds, but they have similarities. They are both very low-cost index funds. Their expense ratio is almost identical (0% vs 0.015%).
The difference can be considered negligible at that low of an expense ratio.
Example:
Investing $10,000 into FNILX and letting it grow for 30 years at a 7% return would result in $76,122.55.
Investing $10,000 into FXAIX and letting it grow for 30 years at a 7% return would result in $75,273.45.
A difference of $849.10.
Similarities between FNILX and FXAIX:
- Low-Cost Index Funds
- Moderate – Aggressive Funds (Risk Level 4)
- Invests Mainly In Large U.S. Companies
FNILX vs FXAIX Fund Size
Fund size is an important metric. It tells you the confidence other investors have in the fund. Fidelity's FNILX and FXAIX have different amounts of assets under management.
FNILX has $5.3 billion in assets under management
FXAIX has $380 billion in assets under management
Both of these funds may better be categorized as large funds.
Although a large fund alone cannot guarantee a good fund, it is a critical factor to consider when trying to pick the correct one.
FNILX vs FXAIX Cost
Fees are one of the biggest killers of portfolio performance. Over 30 years, the difference between a 2% cost and a 0.04% fee might result in your portfolio losing half its value.
FXAIX has a 0.015% expense ratio, whereas FNILX has a 0% expense ratio.
In this case, both of these funds have a similar cost.
FNILX has an expense ratio of 0%
FXAIX has an expense ratio of 0.015%
Winner: FNILX
FNILX Overview
Fidelity ZERO Large Cap Index Fund (FNILX) is a mutual fund established in 2018 and is one of four zero fund choices. FNILX has over $5.4 billion in portfolio net assets.
Also, it boasts consistent returns by investing in 100% domestic equity while keeping costs at zero.
FNILX is categorized as a large blend fund with 4 out of 5 stars from Morningstar.
FNILX has a turnover rate of 5% and charges investors an expense ratio of 0%.
A good advantage of FNILX is there is no minimum initial purchase requirement which means you can invest as little as $100.
Fidelity also offers professionally managed portfolios across nine risk levels, ranging from conservative to aggressive.
Some other platforms offer both mutual funds and ETFs.
However, because FNILX is a mutual fund, only Fidelity funds offer FNILX, the platform that issues FNILX.
FNILX's fees are as low as possible, but eventually, Fidelity will raise prices.
To purchase FNILX, you will have to start a fidelity account.
FNILX Performance
Since FNILX's inception in 2018, its performance has been good. FNILX's performance for the past 3 years has averaged 18% growth annually.
FNILX also had no significant down year in the last three years.
FNILX is categorized as a large blend fund. As a large blend fund, it makes for an excellent investment for those looking at buying and holding over the long term.
Furthermore, FNILX has a beta of 1.00 and a standard deviation of 17.77.
FNILX Returns
FNILX Pros and Cons
Pros
- Fidelity's FNILX Provides Consistent Returns
- Zero Expense Ratio
- Fidelity Is A Reputable Brokerage
- No Minimum Investment
- No Significant Down Years In The Last Three Years
- FNILX Tracks The Fidelity U.S. Large Cap Index
Cons
- Lacks Proven Long-Term Returns
- Fidelity Will Likely Increase FNILX's Expense Ratio
- Only Available On Fidelity's Platform
- Annual Dividends
FNILX Holdings
Here are the top 10 Holdings with total assets of 26.81%.
FXAIX Overview
- Fund Inception: 1988
- 10-Year Performance 15.42%
- Expense Ratio: 0.015%
- Number Of Stocks: 508
- Top 10 Holdings: 29.29%
- Yield 1.30%
Fidelity 500 Index Fund (FXAIX) is a popular fund that aims to invest at least 80% of assets in stocks included in the S&P 500 Index.
Tracking the S&P 500 index helps funds diversify by holding 500 large-cap U.S. companies.
This makes it a good option for retirement.
FXAIX has $380 billion in net assets. This fund is well-liked by retail and institutional investors alike.
FXAIX Performance
Fidelity's FXAIX tracks at least 80% of the S&P 500 Index, so it will always closely follow its returns.
Here is FXAIX's performance over the last 10 years:
FXAIX Top 10 Holdings
Fidelity's FXAIX comprises Apple, Microsoft, Amazon, Alphabet, and Tesla and provides exposure to over 500 stocks.
The top 10 holdings of FXAIX make up 29% of its portfolio.
Which Is Better FXAIX or FNILX?
FXAIX and FNILX are similar in performance. In addition, FNILX offers this performance at a lower expense ratio of 0%.
However, if you are a Fidelity investor, you will have success in either FXAIX or FNILX.
It's essential investors buy FXAIX or FNILX commission-free. Fees can take away from your portfolio returns and compound over time.
I expect FXAIX and FNILX to perform the same over 10 years. The expense ratio isn't a significant difference.
My Winner: Both
FNILX and FXAIX are very similar. Both track the same stocks and are similar in dividend yield and annual returns. They also offer low fees.
They are also both Fidelity funds.
The most considerable appeal of FNILX is its zero expense ratio. However, it's no guarantee Fidelity will keep their prices low. As a result, they could increase the expense ratio of FNILX in the future.
This shouldn't discourage you from considering either fund, especially if you buy the fund through Fidelity.
If you are not a Fidelity customer or prefer to invest with another brokerage like Vanguard, you can look at similar comparisons.
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Frequently Asked Questions (FAQs)
Is FXAIX Better Than FNILX?
FXAIX is not better than FNILX in terms of performance or cost. FNILX has slightly outperformed FXAIX over the last 3 years by 0.14% annually. FNILX also has a lower expense ratio of 0% compared to 0.015% with FXAIX.
Both funds are very similar and can be excellent investments in the long term.
Is FNILX a Good Fund?
If you seek exposure to the Fidelity U.S. Large Cap Index, FNILX is a good fund option that is consistent with low fees.
A good investment aims to replicate the target index returns at the lowest cost possible. Therefore, investors should look for the lowest-cost fund that meets their investment goals.