Wealthy PotFTIHX vs FZILX: A Free International Fund, and What It Costs
FZILX charges 0.00%. FTIHX charges 0.06%. If the fee were the whole story this page would be one line long. It is not, for the same two reasons that apply to Fidelity's other ZERO funds: the index is Fidelity's own, and the fund cannot leave Fidelity without being sold.
The Short Answer
- Investing in a Fidelity IRA or 401(k) and staying at Fidelity? FZILX. The lock-in has little bite in a retirement account, and free is free.
- Investing in a taxable account, or might move brokers? FTIHX. 0.06% is a small price for a fund you can move without triggering a tax bill, and it tracks a widely used third-party index.
FTIHX vs FZILX Side by Side
| Feature | FTIHX | FZILX |
|---|---|---|
| Full name | Fidelity Total International Index Fund | Fidelity ZERO International Index Fund |
| Index | MSCI ACWI ex USA Investable Market Index | Fidelity Global ex U.S. Index, Fidelity's own |
| Expense ratio | 0.06% | 0.00% |
| Minimum | $0 | $0 |
| Fund size | About $27 billion | About $13 billion |
| Transferable to another broker | Generally yes | No, Fidelity only |
Two Different Indexes
Both funds state the same objective: track the total return of foreign developed and emerging stock markets. So unlike FSPSX versus FTIHX, this is not a case where one of them quietly omits emerging markets. Both include them.
The difference is who builds the benchmark. FTIHX follows the MSCI ACWI ex USA Investable Market Index, a widely licensed third-party index whose "Investable Market" designation means it reaches well down the company-size scale. FZILX follows the Fidelity Global ex U.S. Index, which Fidelity constructs and maintains itself. Skipping the licensing fee is part of how the 0.00% is paid for.
In practice two broad ex-U.S. indexes will hold much the same companies and move closely together. The honest caveats are that the ZERO fund's index gets less independent scrutiny than a widely used MSCI benchmark, and that two indexes covering the same universe can still differ at the edges in how far down the size scale they reach and how much weight they give emerging markets. Those differences are real but modest.
The Lock-In
ZERO funds cannot be transferred in kind to another brokerage. If you later want your investments at Schwab or Vanguard, you cannot move an FZILX position across. You have to sell it at Fidelity and buy something else at the new broker.
In an IRA or 401(k) that is a minor inconvenience, because selling inside a retirement account triggers no tax.
In a taxable account it is a genuine cost. Selling a position that has gained realises a capital gain and produces a tax bill in that year. The longer you hold and the better it performs, the bigger the exit cost becomes, which means the price of leaving grows over exactly the same years the zero fee is supposedly saving you money.
The Fee, in Dollars
The gap is 0.06% a year:
- On $10,000: $6 a year.
- On $100,000: $60 a year.
- On $500,000: $300 a year.
That is a larger gap than the equivalent U.S. pair, where FSKAX charges only 0.015%. International indexing costs more to run, so the ZERO fund saves you more here in absolute terms. At $60 per $100,000 the saving is no longer trivial, which makes this a closer call than the domestic version.
It still does not change the shape of the decision. A single realised capital gain on a taxable position will usually dwarf several years of that saving.
Your Account Type Decides This
Fidelity IRA or 401(k): FZILX is a sound choice. You keep the full 0.06% saving and the lock-in costs you nothing meaningful, since you can switch inside the account tax-free whenever you want.
Taxable brokerage account: FTIHX is the safer default. You are buying portability and a third-party index for $60 per $100,000 a year.
Already holding FZILX in a taxable account? Do not sell in a hurry, because that realises exactly the tax cost described above. The usual approach is to keep the existing position and point new contributions at a portable fund, letting the ZERO holding become a smaller share of the portfolio over time.
FAQ
Does FZILX include emerging markets?
Yes. Its stated objective covers foreign developed and emerging stock markets, the same as FTIHX.
Is FZILX genuinely free?
The stated expense ratio is 0.00%, so no annual fee is deducted. Fidelity absorbs the cost as a way of attracting and retaining customers.
Can I move FZILX to another brokerage?
No. ZERO funds are Fidelity-only and cannot transfer in kind. You would have to sell first, which is a taxable event outside a retirement account.
Is Fidelity's own index a problem?
There is no evidence that it is. It is simply less scrutinised than a widely licensed MSCI benchmark, and it may differ modestly in how far down the size scale it reaches.
Should I hold both?
No. They cover the same universe, so holding both adds complexity without adding diversification.
This article is for general information and is not investment advice. Fund figures and index descriptions were taken from Fidelity's published fund pages on 2026-09-21 and can change; confirm current figures before you invest. Tax outcomes depend on your own circumstances.