{ "media_type": "text", "post_content": "I am planning to invest in index funds and I have shortlisted FZROX and VTSAX total stock market funds. I have mostly seen people advising to go for VTSAX than FZROX. Not sure if there is a specific reason or both are just the same in terms of returns. I know FZROX has a better expense ratio. Also, whats the best S&P 500 index fund?\nWould appreciate any inputs here.", "post_id": "61ef4de861ec0d0034b2ac63", "reply_count": 10, "vote_count": 4, "bowl_id": "5b3f7377ab53db00136f7b4c", "bowl_name": "FIRE Financial Independence Retire Early", "feed_type": "bowl" }

I am planning to invest in index funds and I have shortlisted FZROX and VTSAX total stock market funds. I have mostly seen people advising to go for VTSAX than FZROX. Not sure if there is a specific reason or both are just the same in terms of returns. I know FZROX has a better expense ratio. Also, whats the best S&P 500 index fund? Would appreciate any inputs here.

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What broker are you using? They're basically the same thing. VTSAX is more well known and the fees to hold Fidelity mutual funds outside of Fidelity are very high. FZROX technically holds less companies than VTSAX or FSKAX, but performance wise it's like the same. FZROX isn't as established so you'll see it less from old investors. Expense ratio doesn't make a huge difference. 0.04% for VTSAX or 0.015% for FSKAX vs 0% for FZROX. If you want to hold a mutual fund in a brokerage account, don't use FZROX. Use VTSAX. Vanguard has a patent that allows their mutual funds to be structured and taxed like ETFs. FZROX would end up more expensive in a brokerage account compared to VTSAX or VTI. There's no need to hold total market and S&P500. They overlap by 80% and performance is the same. If you still want it, use VOO or VFIAX.

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Yeah I made the rookie mistake of paying the commission on a Vanguard fund in my Fidelity account awhile back. Needless to say that money will be made back tenfold but Fidelity basically offers similar funds.

Go with VTSAX for more diversification and greater tax efficiency. Best S&P 500 index fund is VFIAX. If Fidelity is your brokerage, use the ETF share classes (VTI and VOO, respectively) to avoid transaction fees.

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The two are essentially identical. FZROX has a 0 expense ratio like you said (VTSAX’s expense ratio is .04%), and FZROX has slightly more small cap funds in its asset mix. Both funds hold very little foreign equities; it’s nearly all US stock. While FZROX contains more small cap, the vast majority of the makeup for both of the funds are identical, and so I would own FZROX just because it’s cheaper to own. Both are mutual funds also. And to your second question, if you want a fund that just tracks the S&P 500, then I’d say that SPLV is a good one to own. This is a low volatility S&P 500 fund that behaves pretty similarly to other solid equity index funds but is slightly less volatile, as the name would imply. Lol

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Thanks for the info👍

The reason why some people invest in FSKAK over FZROX is because you’d have to sell your FZROX shares if you switched brokerages, but you wouldn’t have to with FSKAK.

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I just opened a fidelity HSA. Is there any reason to buy FSKAX instead of FZROX?

SPY is the defacto standard for an SP500 ETF. It also has opex 3 times a week, allowing you to maximize selling options against your shares to generate income.

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