In 2018, Fidelity did something no major fund company had done before: launched index funds with a 0.00% expense ratio. The Fidelity ZERO funds charge literally nothing to hold — no management fee, no administrative fee. For Fidelity investors, they represent the theoretically lowest possible cost for index fund investing.
The Fidelity ZERO Funds Lineup
| Fund | Ticker | Expense ratio | What it tracks |
|---|---|---|---|
| Fidelity ZERO Total Market Index Fund | FZROX | 0.00% | US Total Stock Market |
| Fidelity ZERO International Index Fund | FZILX | 0.00% | Non-US stocks (global ex-US) |
| Fidelity ZERO Large Cap Index Fund | FNILX | 0.00% | US large-cap (S&P 500-like) |
| Fidelity ZERO Extended Market Index Fund | FZIPX | 0.00% | US mid/small-cap stocks |
The two most popular are FZROX (US Total Market) and FZILX (International). Together, they form the backbone of a zero-cost global equity portfolio.
FZROX — Fidelity ZERO Total Market Index Fund
FZROX is the flagship Fidelity ZERO fund. It tracks the Fidelity US Total Investable Market Index — a proprietary index covering the US stock market from mega-caps to micro-caps.
Coverage comparison:
| Fund | Index | Holdings | Expense ratio |
|---|---|---|---|
| FZROX | Fidelity US Total Investable Market | ~2,700+ stocks | 0.00% |
| VTI | CRSP US Total Market | ~3,600+ stocks | 0.03% |
| ITOT | S&P Total Market | ~2,500+ stocks | 0.03% |
The coverage is similar across all three — the US total investable market. Fidelity’s proprietary index has slightly fewer holdings than CRSP’s, but both capture the vast majority of US equity market capitalisation.
FZROX vs. VTI performance: Essentially identical. The 0.03% annual cost difference means FZROX theoretically keeps slightly more of gross returns. Over 30 years on $100,000, the difference is approximately $9,000 — real money, but trivial compared to contribution amounts and investment choices.
FZILX — Fidelity ZERO International Index Fund
FZILX tracks the Fidelity Global ex US Index, providing exposure to non-US equities — Europe, Asia-Pacific, emerging markets, and more.
Coverage comparison:
| Fund | Holdings | Expense ratio |
|---|---|---|
| FZILX | ~2,500+ stocks | 0.00% |
| VXUS | ~7,500+ stocks | 0.07% |
| IXUS | ~4,000+ stocks | 0.07% |
VXUS and IXUS hold more stocks than FZILX, but FZILX covers most of the world’s major markets at zero cost.
The Critical Limitation: Fidelity-Only
This is the most important thing to understand about Fidelity ZERO funds:
FZROX and FZILX are available only at Fidelity. They use proprietary indexes that are not traded on any stock exchange. You cannot:
- Transfer FZROX shares to Schwab, Vanguard, or any other broker
- Hold FZROX in a 401(k) at a different provider
- Sell FZROX at another broker
If you ever want to move your account away from Fidelity, you must sell FZROX first. In a taxable account, this sale triggers a capital gains tax event. In a tax-advantaged account (Roth IRA, traditional IRA), there is no tax on the sale.
Practical implication: FZROX is ideal for long-term Fidelity investors who don’t anticipate moving their accounts. For investors who want maximum portability — or who might consolidate accounts at Schwab or Vanguard someday — ETFs like VTI are more flexible.
FZROX and FZILX: Building a Two-Fund Portfolio at Zero Cost
A simple, globally diversified portfolio using Fidelity ZERO funds:
| Fund | Allocation | Expense ratio |
|---|---|---|
| FZROX | 60–80% | 0.00% |
| FZILX | 20–40% | 0.00% |
| Total | 100% | 0.00% |
This gives global equity diversification — US and non-US stocks — at literally $0 annual cost. No other major fund company offers anything comparable.
For a three-fund portfolio, add:
- FXNAX (Fidelity US Bond Index Fund, 0.025%) for bond exposure
Tax Considerations: FZROX in Taxable vs. Tax-Advantaged Accounts
Tax-advantaged accounts (Roth IRA, traditional IRA): FZROX is ideal — no taxes on growth, no concern about portability triggering a taxable event. Maximally cost-efficient.
Taxable brokerage accounts: Consider the portability risk before using FZROX in a taxable account. If you:
- Plan to stay at Fidelity forever: FZROX is the best choice
- Might move your account someday: VTI (0.03%) or FXAIX (0.015%) give portability with minimal cost
Over a 30-year hold, the 0.03% cost difference between FZROX and VTI in a taxable account is approximately $9,000 on $100,000. Weigh this against the portability risk.
Worked Example: FZROX vs. VTI Over 30 Years
Assume $500/month, 7% gross return, 30-year horizon:
| Fund | Annual cost on $350,000 avg balance | 30-year ending balance (approx.) |
|---|---|---|
| FZROX (0.00%) | $0 | ~$610,000 |
| VTI (0.03%) | ~$105/year | ~$601,000 |
| Difference | — | ~$9,000 |
FZROX saves ~$9,000 over 30 years on this contribution pattern — meaningful but not dramatic. The bigger savings come from choosing FZROX over a higher-cost fund:
| Fund | Annual cost on $350,000 | 30-year savings vs. FZROX |
|---|---|---|
| FZROX (0.00%) | $0 | — |
| VTI (0.03%) | ~$105 | ~$9,000 less |
| Typical active fund (0.75%) | ~$2,625 | ~$220,000 less |
The real enemy of returns is not VOO vs. FZROX — it’s choosing actively managed funds.
FZROX vs. FXAIX: Which Fidelity Fund?
| Fund | What it tracks | Expense ratio |
|---|---|---|
| FZROX | US Total Market | 0.00% |
| FXAIX | S&P 500 | 0.015% |
| FNILX | Large cap (S&P 500-like) | 0.00% |
FNILX is a ZERO fund that tracks a Fidelity proprietary large-cap index similar to the S&P 500 — at 0.00%. For pure S&P 500 exposure, FNILX (0.00%) vs. FXAIX (0.015%) is the cleaner comparison. FZROX covers the entire US market including small and mid caps.
How to Invest in Fidelity ZERO Funds
- Open a Fidelity account (brokerage, Roth IRA, traditional IRA, etc.)
- Search for “FZROX” or “FZILX” in the fund search
- Enter the dollar amount you want to invest (mutual funds accept exact dollar amounts)
- Set up automatic monthly investments if desired
- Dividends reinvest automatically in fractional shares
No minimum investment. No commission. No expense ratio.
Internal Links
- FXAIX vs. VOO: S&P 500 fund comparison
- Fidelity custodial account guide
- Open a Fidelity account
- Fidelity Youth Account for teens
- Fidelity vs. Vanguard: full comparison
- Fidelity investing hub
Bottom Line
Fidelity ZERO funds (FZROX and FZILX) are genuinely zero-cost index funds — something unprecedented among major fund families. For dedicated Fidelity investors, they offer the maximum possible return efficiency. The key trade-off is portability: these funds can only be held at Fidelity. For Roth IRA and 401(k) investors who plan to stay with Fidelity long-term, FZROX and FZILX are the optimal core holdings. For investors who value flexibility to switch brokers, VTI (0.03%) remains the better choice.
This article is for educational purposes only and does not constitute personalised investment advice. All investments carry risk, including the possible loss of principal.
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