Both FXAIX and VOO track the S&P 500 Index and both cost almost nothing. FXAIX is Fidelity’s 500 Index Fund with a 0.015% expense ratio. VOO is Vanguard’s S&P 500 ETF at 0.03%. In pure performance terms, the difference is negligible. But there are real structural differences that matter depending on where you invest and how you prefer to buy.
Quick Comparison: FXAIX vs. VOO
| Feature | FXAIX | VOO |
|---|---|---|
| Fund type | Mutual fund | ETF |
| Index tracked | S&P 500 | S&P 500 |
| Expense ratio | 0.015% | 0.03% |
| Minimum investment | $0 | 1 share (or fractional) |
| Trades | Once daily (EOD NAV) | Intraday (stock exchange) |
| Available at | Fidelity only | Any brokerage |
| Dividends | Reinvested automatically | Quarterly cash (can DRIP) |
| Tax efficiency | Good | Slightly better (ETF structure) |
The Key Difference: Mutual Fund vs. ETF
FXAIX — Mutual Fund Structure
FXAIX is a traditional mutual fund. When you buy FXAIX:
- Your order executes at end-of-day NAV (the fund’s net asset value), regardless of when you place the order
- Dividends can be automatically reinvested in fractional shares
- You can invest exact dollar amounts ($100.00 buys exactly $100 of FXAIX)
- Available only through Fidelity
Best for: Automated investing, dollar-cost averaging, Fidelity account holders.
VOO — ETF Structure
VOO is an exchange-traded fund. When you buy VOO:
- It trades intraday at a market price, like a stock
- You buy in shares (though many brokers now offer fractional ETF shares)
- Available at any brokerage with $0 commission (Fidelity, Schwab, Merrill Edge, etc.)
- Slightly more tax-efficient due to the ETF creation/redemption mechanism
Best for: Investors at any brokerage, those who want intraday price flexibility, taxable accounts.
Expense Ratio Deep Dive
FXAIX’s 0.015% vs. VOO’s 0.03% — let’s see what that actually costs:
| Portfolio value | FXAIX annual fee | VOO annual fee | Difference |
|---|---|---|---|
| $10,000 | $1.50 | $3.00 | $1.50/yr |
| $100,000 | $15.00 | $30.00 | $15/yr |
| $500,000 | $75.00 | $150.00 | $75/yr |
| $1,000,000 | $150.00 | $300.00 | $150/yr |
Over 30 years, the compounding effect of that $150/year difference on a million-dollar portfolio is meaningful — but it pales compared to the drag of higher-cost funds (many active funds charge 0.5%–1.0%). Choosing between FXAIX and VOO should be driven by account location and investment mechanics, not by the tiny fee gap.
Performance: Are They Identical?
Both funds track the same index, so their gross returns should be almost exactly equal. The difference: FXAIX keeps 0.015% more of its gross return, while VOO keeps 0.030% less. The practical performance gap over 10 years on a $50,000 investment is less than $200.
Both funds have tracked the S&P 500 with extremely tight error (tracking error < 0.05% per year).
Tax Efficiency Comparison
In a tax-advantaged account (Roth IRA, traditional IRA, 401(k)): Tax efficiency is irrelevant. Both FXAIX and VOO are equally fine.
In a taxable account: VOO has a slight edge. ETFs use an in-kind creation/redemption mechanism that avoids realising capital gains internally. Mutual funds, including FXAIX, can occasionally distribute capital gains to shareholders even if you haven’t sold. Fidelity has managed FXAIX extremely well and has historically distributed minimal capital gains — but the structural advantage belongs to VOO.
Verdict: For taxable accounts, give VOO a slight edge. For tax-advantaged accounts, choose based on convenience.
Which Should You Choose?
Choose FXAIX if:
- You have a Fidelity account and want the absolute lowest expense ratio
- You prefer automatic dividend reinvestment in exact dollar amounts
- You set up automatic monthly contributions and want exact-dollar investing
- You’re comfortable with a mutual fund structure
Choose VOO if:
- You invest at a brokerage other than Fidelity (Schwab, Merrill Edge, etc.)
- You want the portability of an ETF (VOO works the same at any broker)
- You’re investing in a taxable account and want maximum tax efficiency
- You want intraday trading flexibility
At Fidelity Specifically
If you’re a Fidelity investor, FXAIX is the marginally cheaper option and works seamlessly with Fidelity’s automatic investment tools. You can also use Fidelity ZERO funds (FZROX for total market, FZILX for international) at 0.00% expense ratio — though these are only available at Fidelity.
Alternatives to Consider
| Fund | Type | Expense ratio | What it tracks |
|---|---|---|---|
| FXAIX | Mutual fund | 0.015% | S&P 500 (Fidelity only) |
| VOO | ETF | 0.03% | S&P 500 (any broker) |
| VFIAX | Mutual fund | 0.04% | S&P 500 (Vanguard, $3,000 min) |
| IVV | ETF | 0.03% | S&P 500 (any broker) |
| SPY | ETF | 0.0945% | S&P 500 (any broker) |
| FZROX | Mutual fund | 0.00% | US Total Market (Fidelity only) |
Internal Links
- VOO ETF 2026 Review
- VOO vs. VTI: which Vanguard ETF is better?
- Fidelity ZERO funds guide
- Best Roth IRA investments
- Fidelity vs. Vanguard: full comparison
- Open a Fidelity account
Bottom Line
FXAIX and VOO are two of the best investment options available to US investors. The 0.015% cost difference is real but small. The more important question is where you invest: if you’re at Fidelity, FXAIX is the natural choice. If you’re at any other broker, VOO is the universal option. Either way, tracking the S&P 500 at near-zero cost puts you ahead of the majority of actively managed funds over any 10+ year period.
This article is for educational purposes only and does not constitute personalised investment advice. All investments carry risk, including the possible loss of principal.
The content on Wealthvieu is for informational purposes only and should not be considered financial, tax, or investment advice. Consult a qualified professional before making financial decisions. Full disclaimer · Editorial policy