FZROX: The No Fee (0%) Total Market Index Fund From Fidelity

What Is Fidelity ZERO Total Market Index Fund (FZROX)?

Fidelity ZERO Total Market Index Fund (FZROX) is an index fund launched in 2018 by Fidelity Investments that aims to provide exposure to a broad range of U.S. stocks by tracking the performance of the CRSP US Total Market Index.

As of February 17, 2023, the fund had assets under management (AUM) of $38.7 billion and an expense ratio of 0.00%. This makes FZROX one of the largest and lowest cost mutual funds available. The fund's portfolio is diversified across different market capitalization sizes, sectors, and styles, with a tilt towards large-cap growth stocks.

In terms of performance, FZROX has delivered strong returns over the past year, with a YoY return of 31.35% as of February 17, 2023.

The fund has also outperformed its benchmark, the CRSP US Total Market Index, over the long term, with an average annual return of 14.53% over the past 5 years.

One of the key benefits of investing in FZROX is its low cost. With a 0.00% expense ratio, investors save money on fees compared to other actively managed mutual funds or exchange-traded funds (ETFs) with higher expense ratios. This can lead to higher returns over the long term, as more of the returns are kept by the investor, and if you're reading this, you LOVE saving money!

Alright, alright. Enough of the talk, let's look at how FZROX stacks up to the competition.

Also, if you're looking to compare investments, we've got an entire section for you.

FZROX Low-Fee Competitors

The table shows the expense ratio and similarity score for each fund compared to Fidelity ZERO Total Market Index Fund (FZROX). The similarity score is based on the similarity of the fund's portfolio holdings, expense ratio, and other factors.

Common FZROX vs. Fund Comparisons

FZROX vs. FSKAX: Fidelity ZERO Total Market Index Fund (FZROX) vs Fidelity Small-Cap Index Fund (FSKAX):

• Both funds have a low expense ratio of 0.00%.
• FZROX provides exposure to the total U.S. stock market, while FSKAX provides exposure to the U.S. small-cap stock market.
• FSKAX may provide higher potential returns due to its focus on small-cap stocks, but also greater risk compared to FZROX.

FZROX vs. VTI: Fidelity ZERO Total Market Index Fund (FZROX) vs Vanguard Total Stock Market ETF (VTI):

• Both funds have a low expense ratio, with VTI having an expense ratio of 0.03% and FZROX having an expense ratio of 0.00%.
• VTI provides exposure only to the U.S. stock market, while FZROX provides a more diversified exposure to the U.S. stock market.

FZROX vs. VTSAX: Fidelity ZERO Total Market Index Fund (FZROX) vs Vanguard Total World Stock ETF (VTSAX):

• Both funds have a low expense ratio, with VTSAX having an expense ratio of 0.08% and FZROX having an expense ratio of 0.00%.
• VTSAX provides exposure to both the U.S. and international stock markets, while FZROX provides exposure only to the U.S. stock market.

FZROX vs. FXAIX:Fidelity ZERO Total Market Index Fund (FZROX) vs Fidelity 500 Index Fund (FXAIX):

• Both funds have a low expense ratio, with FXAIX having an expense ratio of 0.09% and FZROX having an expense ratio of 0.00%.
• FXAIX provides exposure to the S&P 500 Index, while FZROX provides a more diversified exposure to the U.S. stock market.

FZROX vs. FSNLIX:Fidelity ZERO Total Market Index Fund (FZROX) vs Fidelity International Index Fund (FNILX):

• Both funds have a low expense ratio, with FNILX having an expense ratio of 0.09% and FZROX having an expense ratio of 0.00%.
• FNILX provides exposure to international stock markets, while FZROX provides exposure only to the U.S. stock market.

Now that you know what FZROX is and what funds it stacks up to, let's look at a couple quick reasons why you should or should not invest in the fund, because after all, this is about saving (and making) money, and you need to do what's best for you and your financial goals.

Why You Should Invest In FZROX

1. Low cost: FZROX has a 0% expense ratio, meaning you don't have to pay additional fees when investing.
2. Diversification: FZROX provides exposure to a broad range of stocks from large, mid, and small-cap companies across the US.
3. Potential for long-term returns: By investing in FZROX, you can potentially generate market-level returns over the long term.
4. Tax efficiency: FZROX also offers tax-efficient investment opportunities, making it suitable for long-term investors and retirement savings plans.

Why You Shouldn’t Invest In FZROX

1. Lack of diversification: FZROX provides exposure only to the U.S. stock market and does not provide exposure to international stocks or bonds.
2. Market risk: Like all stock market investments, FZROX is subject to market risk and can experience fluctuations in value.
3. No professional management: FZROX is an index fund and does not have a professional fund manager making investment decisions. This may not be suitable for those who prefer more actively managed funds.
4. Limited customization options: As an index fund, FZROX follows a specific investment strategy and may not provide the level of customization that some investors desire.

So, what do you think? Are you ready to take the dive into a no-fee fund or are you just looking for good reasons to do it yourself?

Either way, you won't make an incorrect choice. There are benefits to every form of investing and the key takeaway should be this brilliant quote.

“Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn't … pays it.” - Albert Einstein