Choosing between Fidelity's popular total market index funds can be challenging for both new and experienced investors. FZROX (Fidelity ZERO Total Market Index Fund) and FSKAX (Fidelity Total Market Index Fund) are two of the most popular options for those looking to invest in the entire U.S. stock market. This comprehensive guide breaks down everything you need to know to decide which fund is right for your investment goals in 2025.
Quick Comparison: FZROX vs FSKAX
| Feature | FZROX | FSKAX |
|---|---|---|
| Full Name | Fidelity ZERO Total Market Index Fund | Fidelity Total Market Index Fund |
| Expense Ratio | 0.00% (Zero fee) | 0.015% |
| Minimum Investment | $0 | $0 |
| Number of Holdings | ~2,700 | ~3,900 |
| Tracking Index | Fidelity U.S. Total Investable Market Index | Dow Jones U.S. Total Stock Market Index |
| Account Type Availability | Fidelity accounts only | Available in all account types |
| ETF Version | No ETF version | No direct ETF (but similar to ITOT) |
What is FZROX?
FZROX, or the Fidelity ZERO Total Market Index Fund, was launched in 2018 as part of Fidelity's groundbreaking zero-fee index fund lineup. As the name suggests, it comes with a 0.00% expense ratio, meaning you pay absolutely no annual fees for fund management.
This fund tracks the Fidelity U.S. Total Investable Market Index, a proprietary index created by Fidelity. It contains approximately 2,700 U.S. stocks across large-cap, mid-cap, and small-cap companies. The fund aims to provide investment results that correspond to the total return of a broad range of U.S. stocks.
One important limitation: FZROX is only available to investors with Fidelity brokerage accounts and cannot be transferred to other brokerages if you decide to move your investments.
What is FSKAX?
FSKAX, or the Fidelity Total Market Index Fund, is Fidelity's traditional total market offering that predates the ZERO fund lineup. While not completely free, its expense ratio is still remarkably low at just 0.015% (that's just $1.50 annually per $10,000 invested).
This fund tracks the Dow Jones U.S. Total Stock Market Index and holds approximately 3,900 U.S. stocks. The slightly broader coverage includes more small and micro-cap companies than FZROX. Unlike its zero-fee counterpart, FSKAX can be transferred between brokerages and held in any type of account.
Key Differences Between FZROX and FSKAX
1. Expense Ratio
The most obvious difference is the expense ratio: FZROX charges absolutely nothing (0.00%), while FSKAX charges 0.015%. While both are extremely low compared to most funds in the market, the difference means FSKAX investors pay $1.50 annually per $10,000 invested.
2. Holdings and Diversification
FSKAX holds about 3,900 stocks compared to FZROX's 2,700. The additional 1,200 holdings in FSKAX represent very small and micro-cap companies that make up a tiny percentage of the overall fund value. While FSKAX technically offers more diversification, the performance impact of these additional holdings is usually minimal.
3. Tracking Index
FZROX tracks Fidelity's proprietary U.S. Total Investable Market Index, while FSKAX follows the Dow Jones U.S. Total Stock Market Index. This difference explains the variation in number of holdings, as each index has slightly different inclusion criteria.
4. Portability
FSKAX can be transferred to other brokerages if you decide to move your account, while FZROX is exclusive to Fidelity accounts. If you think you might switch brokerages in the future, this could be an important consideration.
5. Tax Efficiency
Both funds are relatively tax-efficient, but FSKAX has a slightly longer track record of tax management and may have minor advantages for taxable accounts. However, the difference is marginal for most investors.
Performance Comparison
Since FZROX was launched in 2018, both funds have shown nearly identical performance. Any minor differences can typically be attributed to:
- The 0.015% expense ratio difference (slight advantage to FZROX)
- Different tracking indices and holdings composition (can favor either fund depending on market conditions)
- Cash management strategies (minor impact)
Historical data shows that the performance difference between the two funds typically ranges from 0.01% to 0.05% annually, which is negligible for most investors. Both funds achieve their primary goal of capturing the performance of the broader U.S. stock market.
Which Fund is Right for You in 2025?
Choose FZROX if:
- You plan to stay with Fidelity for the long term
- You want to eliminate fund expenses completely
- You're investing in a Fidelity-based 401(k), IRA, or taxable account
- You're comfortable with a proprietary index
- You appreciate the simplicity of zero fees
Choose FSKAX if:
- You might transfer your investments to another brokerage in the future
- You value broader market coverage with more small-cap stocks
- You prefer a fund that tracks a well-established third-party index
- You're willing to pay a minimal fee (0.015%) for these advantages
- You want maximum flexibility across account types
Using FZROX and FSKAX in Your Portfolio
Both funds can serve as the core U.S. stock market holding in your investment portfolio. Most financial advisors suggest allocating 50-70% of an equity portfolio to a total market fund like FZROX or FSKAX. These funds pair well with:
- International stock funds for global diversification
- Bond funds for income and reduced volatility
- Specialized sector funds for targeted exposure
Interested in learning more about fund investing? Check out our comprehensive guide on what are index funds and how they can help grow your wealth with minimal effort.
Alternative Options to Consider
While FZROX and FSKAX are excellent choices for total market exposure, you might also want to explore these alternatives:
1. Vanguard Total Stock Market Index Fund (VTSAX)
Vanguard's equivalent total market fund with a 0.04% expense ratio and similar performance. This is a popular choice for Vanguard account holders.
2. iShares Core S&P Total U.S. Stock Market ETF (ITOT)
An ETF option that provides similar exposure with the flexibility of intraday trading and a 0.03% expense ratio.
3. Schwab Total Stock Market Index Fund (SWTSX)
Charles Schwab's version with a 0.03% expense ratio, ideal for Schwab account holders.
For a comprehensive understanding of different fund types, our guide on understanding mutual funds provides valuable insights for both beginners and experienced investors.
Investment Platform Considerations
The choice between FZROX and FSKAX may also depend on which investment platform you use. If you're still deciding on an investment platform, check out our comparison of the best investment apps for beginners and pros to find the perfect match for your needs.
Looking to start a new online business? Consider setting up an e-commerce store with Shopify, with plans starting at $39 per month, which can provide an additional income stream to complement your investment strategy.
Final Words
Both FZROX and FSKAX are excellent total market index funds with minimal differences that will impact most investors. The decision often comes down to whether you value the absolute zero expense ratio of FZROX or the greater flexibility and slightly broader market coverage of FSKAX.
For long-term Fidelity investors focused on minimizing costs, FZROX is an outstanding choice. For those who prioritize maximum flexibility and slightly broader diversification, FSKAX provides tremendous value despite its minimal fee.
Remember that consistent investing and proper asset allocation will have a far greater impact on your long-term results than the minor differences between these two similar funds. Whichever you choose, both represent the kind of low-cost, broadly diversified investment that forms the foundation of a solid financial future.
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Frequently Asked Questions About FZROX vs FSKAX
Is FZROX better than FSKAX?
Neither fund is objectively 'better' - they have different strengths. FZROX has a 0% expense ratio but is only available at Fidelity. FSKAX has a slightly higher expense ratio (0.015%) but offers broader market coverage with ~3,900 stocks versus FZROX's ~2,700 stocks and can be transferred between brokerages. The best choice depends on your specific investment goals and circumstances.
Why does FZROX have zero fees?
FZROX has zero fees because Fidelity introduced it as part of their ZERO index fund lineup to attract new customers and assets under management. Fidelity can afford to offer these zero-fee funds because they: 1) use proprietary indices to avoid licensing fees, 2) generate revenue from securities lending, 3) benefit from increased customer acquisition, and 4) can cross-sell other financial products to these customers.
Can I transfer FZROX to another brokerage?
No, FZROX cannot be transferred to another brokerage. It's exclusively available to Fidelity account holders. If you decide to move your investments to another brokerage, you would need to sell your FZROX positions first and then reinvest the proceeds at your new brokerage. This is one of the key limitations compared to FSKAX, which can be transferred between brokerages.
Do FZROX and FSKAX pay dividends?
Yes, both FZROX and FSKAX pay dividends. As total market index funds, they pass along the dividends paid by the companies they hold. These dividends are typically distributed quarterly. Both funds have similar dividend yields, generally around 1.3-1.8% annually, though this varies based on market conditions.
Which fund is better for a 401(k) or IRA?
Both funds are excellent choices for retirement accounts like 401(k)s and IRAs. If your retirement account is with Fidelity and you plan to keep it there long-term, FZROX might have a slight edge due to its zero expense ratio. If you anticipate potentially rolling over your account to another provider in the future, FSKAX would be the better choice due to its transferability between brokerages.
