In this article, we will explore the difference between FXAIX vs VTI.
Choosing between Vanguard's Total Stock Market Index Fund ETF (VTI) and Fidelity's 500 Index Fund (FXAIX) can be challenging.
This comparison will make it easy to decide which is right for you.
FXAIX vs VTI
The main difference between FXAIX and VTI is the company that offers the fund. Fidelity offers FXAIX, while Vanguard offers VTI. They also track different indexes, with VTI tracking the CRSP US Total Market Index while FXAIX tracking the S&P 500 index.
Vanguard offers VTI
Fidelity offers FXAIX
Another difference between VTI and FXAIX is their expense ratio. Both have low expense ratios, but FXAIX is among the lowest in the industry.
VTI Has An Expense Ratio Of 0.03%
FXAIX Has An Expense Ratio Of 0.015%
Lastly, VTI is an Exchange Traded Fund (ETF), while FXAIX is an index fund. However, VTI has an equivalent index fund, Vanguard Total Stock Market Index Fund Admiral (VTSAX).
FXAIX
- Tracks the S&P 500 Index
- Expense Ratio: 0.015%
- Holds 508 stocks
VTI
- Tracks the performance of the CRSP US Total Market Index
- It has an expense ratio of 0.03%
- No minimum initial investment
- Holds 3,535 stocks
Lastly, FXAIX has 508 holdings compared to 3,535, with VTI making VTI more diversified.
Now, let's keep comparing VTI and FXAIX.
FXAIX vs VTI Performance
FXAIX and VTI have had similar performance returns over the last 10 years.
Fidelity's FXAIX has had slightly better returns averaging 11.84% annually than 11.31%.
Here is FXAIX vs VTI performance chart:
As you can see from the chart, they perform similarly, with FXAIX outperforming slightly.
FXAIX and VTI Holdings
FXAIX and VTI hold different companies. Fidelity's FXAIX holds 508 companies focusing on large-caps, the same as the S&P 500. VTI holds 3,535 companies focusing on the U.S. Total Market Index and owns more mid-cap and small-cap companies.
Below are the top ten holdings of FXAIX vs VTI:
As you can see, there is a lot of overlap.
However, the top 10 holdings for FXAIX make up 25% of its portfolio, while it makes up 21% for VTI.
This makes VTI more diversified.
FXAIX Overview
- Fund Inception: 1988
- 10-Year Performance 16.54%
- Expense Ratio: 0.015%
- Number Of Stocks: 508
- Top 10 Holdings: 29.29%
- Yield 1.30%
Fidelity 500 Index Fund (FXAIX) is a fund that aims to invest at least 80% of assets in stocks that are in the S&P 500 Index.
The S&P 500 is a choice for many investors because of the opportunity to diversify their portfolios.
This diversification makes FXAIX a good option for retirement.
FXAIX has $379 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 the index's 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.
Here are the top 10 holdings for FXAIX:
The top 10 holdings of FXAIX make up 29% of its portfolio.
VTI Profile
- Fund Inception: 2001
- Expense Ratio: 0.03%
- Number Of Stocks: 3,535
- Top 10 Holdings: 23.9%
Vanguard Total Stock Market ETF (VTI) represents close to 100% of the U.S. equity market that is publicly traded. It also tracks the CRSP U.S. Total Market Index.
Vanguard's VTI has an expense ratio of 0.03%.
This notably implies that the fund has limited exposure to several international stocks.
However, this does not affect the companies represented in the fund. These stocks have a significant international presence.
VTI Performance
Take a look at the historical chart below. You can see that the returns for VTI and the S&P 500 have been nearly identical over the last 10 years.
However, remember that this does not guarantee that the next 10 years will look the same.
VTI Holdings
Here are the top 10 holdings for the Vanguard Total Stock Market ETF (VTI):
The fund has $1.3 trillion in total net assets.
VTI comprises Apple, Microsoft, Google, Amazon, and Berkshire and provides exposure to over 3,000 stocks.
No Minimum Investment
VTI is an exchange-traded fund (ETF) with no minimum investment. Investors looking to buy fractional shares can use platforms like M1 Finance. ***(Get $100 When You Use This Link)***
Usually, fractional shares are not available for ETFs, but with M1 Finance, you can purchase fractional shares with no commission.
Buying fractional shares allows you to maximize your investment. You no longer have to keep your money idle until you have enough to purchase a total share.
This is especially beneficial regarding VTI shares due to their high prices per share.
I also use Personal Capital to track my investment fees. They have a free Retirement Fee Analyzer that tells you the future impact of fees on your portfolio.
Personal Capital's free tools allow you to quickly find which of your investments has high fees so you can switch them to low-cost options. (Get a $20 Amazon Gift Card with this link when you add at least one investment account containing a balance of more than $1,000 within 30 days)
VTI 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 VTI has a 0.03% expense ratio.
In this case, both of these funds have a similar cost.
The Vanguard Total Stock Market Index Fund ETF (VTI) is less expensive than 96% of rival funds.
VTI has an expense ratio of 0.03%
FXAIX has an expense ratio of 0.015%
VTI vs FXAIX Size
One factor to consider when looking for assets to invest in is size. A vast fund does not imply that it is a good fund.
It is one factor to consider when determining the best fund.
VTI manages $1.3 trillion, and FXAIX manages $380 billion.
Which Is Better FXAIX or VTI?
FXAIX and VTI are similar in performance. In addition, FXAIX offers exposure to the S&P 500 at a lower expense ratio of 0.015%. However, if you are not a Fidelity investor, you must pay commissions to buy FXAIX.
VTI, on the other hand, can be purchased commission-free with Vanguard or M1 Finance. ***(Get $100 When You Use This Link)***
It is important investors buy FXAIX or VTI commission-free. Fees can take away from your portfolio returns and compound over time.
I expect FXAIX and VTI to perform similarly over the next 10 years. The expense ratio isn't a significant difference.
Index Funds vs Exchange Traded Funds (ETFs)
Exchange-traded funds (ETFs) are usually a more accessible option for new investors since they don't have a minimum investment. In comparison, if you can afford to invest more than the minimum, it's usually a better option to choose admiral index funds because they have a lower expense ratio.
The expense ratio is almost the same in this case, only differing by 0.015%.
ETFs are also available to trade at any time the market is open. Index funds are bought after the market closes and the price settles. Depending on your views, this can be a good or bad thing.
For long-term investors, the ability to trade anytime in the day is not a benefit. Instead, it can encourage market timing and frequent trading.
An index fund might be a better option if you have these tendencies.
Lastly, if you prefer to have every penny invested, then you will like that Index funds offer fractional share buying.
On the contrary, ETFs must be bought one full share at a time. That can sometimes lead to uninvested money while waiting for your next contribution.
This is more of a preference since I don't think it will significantly affect your returns.
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Is FXAIX or VTI Better for Financial Independence?
FXAIX and VTI can get you to Financial Independence Retire Early (FIRE). They both have a similar return on investment and have rock-bottom expense ratios.
So, either option is an excellent investment for financial independence. I own both.
After keeping fees to a minimum, you can work on increasing your savings rate and prioritizing your investments.
Then, you will be well on your way to Financial Independence and Early Retirement!
Calculate Your FI Number With My Free FIRE Calculator
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My Winner: VTI
VTI and FXAIX are similar in dividend yield and annual returns. They also offer low fees.
Yet, VTI is a Vanguard ETF, while FXAIX is a Fidelity fund. Vanguard's ownership structure provides an incentive to continue to offer low-cost options.
Fidelity is not guaranteed to keep their prices low. As a result, they could increase the expense ratio of FXAIX in the future.
This shouldn't discourage you from considering FXAIX, especially if you buy the fund through Fidelity.
The decision might come down to which brokerage you prefer.
If you already have an account at Vanguard, VTI might fit you best.
FXAIX is an excellent option to consider if you are with Fidelity.
Which is Better for ETFs, Vanguard or Fidelity?
Vanguard and Fidelity are reputable ETF providers, but the better choice depends on individual preferences.
Vanguard offers low-cost ETFs and is known for passive index investing.
Fidelity has a wider selection of ETFs, including actively managed funds, and offers commission-free trading for a broader selection of ETFs.
Choose Vanguard for low fees and passive index investing or Fidelity for a wider range of ETF options and commission-free trading.
What is the Fidelity Equivalent to VTI?
The Fidelity Total Market Index Fund (FSKAX) is the closest equivalent to Vanguard's Total Stock Market ETF (VTI).
While both VTI and FSKAX aim to track the performance of the entire U.S. stock market, some slight differences exist in their holdings and expense ratios.
FSKAX has a lower expense ratio than VTI, but VTI has a larger asset base and may offer more liquidity in the market.
Considering these differences is important when deciding which fund fits your investment portfolio best.
Overall, FSKAX is a solid alternative for investors who prefer Fidelity's platform or want a low-cost total market fund similar to VTI.
Is It Possible To Purchase VTI From Fidelity?
Yes, purchasing VTI, a Vanguard ETF, is possible from Fidelity. However, it may be subject to transaction fees or other restrictions depending on the specific account and investment strategy.
It's important to research and compare the fees and features of different investment platforms before deciding.
Additionally, it's worth noting that Fidelity offers its own line of low-cost index funds and ETFs that may be a suitable alternative to VTI.