Wealthy PotFXAIX vs VOO: Same 500 Stocks, Two Different Wrappers
FXAIX and VOO hold the same thing: the S&P 500, the same 500 large U.S. companies in the same proportions. Their long-run returns are nearly identical because the index they track is identical. The real difference is the wrapper. FXAIX is a Fidelity mutual fund; VOO is a Vanguard ETF. That one distinction drives how they trade, where you can hold them, how they are taxed, and which one belongs in your account. This guide breaks it down using figures pulled straight from Fidelity's prospectus and Vanguard's fund documents.
The Short Answer
- Investing inside a Fidelity account, especially a 401(k) or IRA? FXAIX. It is a hair cheaper at 0.015%, buys in whole-dollar amounts with no bid-ask spread, and is the natural S&P 500 choice on Fidelity's platform.
- Want a fund you can hold anywhere and trade intraday, or investing in a taxable brokerage account? VOO. As an ETF it is portable across brokers, trades like a stock, and its structure is generally more tax-efficient outside retirement accounts.
Both are among the cheapest, cleanest ways to own the S&P 500 in existence. You will not go wrong with either. The choice is about your account and platform, not about which one performs better.
Same Index, Different Wrapper
Both funds track the S&P 500 Index, so their holdings are effectively the same. What differs is the legal structure around those holdings.
- FXAIX is the Fidelity 500 Index Fund, an open-end mutual fund that launched in 1988. It prices once per day, after the U.S. market closes, and everyone who buys or sells that day transacts at the same closing net asset value.
- VOO is the Vanguard S&P 500 ETF, launched in 2010. It is an exchange-traded fund, so it trades on an exchange throughout the day at a live market price, just like a stock.
If the mutual-fund-versus-ETF distinction is new to you, our mutual funds vs ETFs guide covers the mechanics in depth. Below we focus on what it means specifically for these two.
FXAIX vs VOO Side by Side
| Feature | FXAIX (Fidelity) | VOO (Vanguard) |
|---|---|---|
| Index tracked | S&P 500 | S&P 500 |
| Fund type | Mutual fund | ETF |
| Expense ratio | 0.015% | 0.03% |
| How it trades | Once daily at closing NAV | Intraday, live market price |
| Bid-ask spread | None | Small, but exists |
| Minimum investment | $0 | Price of one share (or fractional) |
| Where to hold it | Best at Fidelity | Any broker |
| Inception | Feb 17, 1988 | Sep 7, 2010 |
| Net assets | ~$827.5 billion | ~$979 billion |
| Taxable-account efficiency | Good (low turnover) | Generally better (ETF structure) |
| Best for | Fidelity accounts, retirement | Portable, taxable, intraday |
The Fee Difference, in Dollars
FXAIX is cheaper on the sticker: 0.015% versus VOO's 0.03%. That is half the fee, but half of an already-tiny number. In real dollars:
| Amount invested | FXAIX annual fee (0.015%) | VOO annual fee (0.03%) | You keep with FXAIX |
|---|---|---|---|
| $10,000 | $1.50 | $3.00 | $1.50/yr |
| $100,000 | $15.00 | $30.00 | $15.00/yr |
| $500,000 | $75.00 | $150.00 | $75.00/yr |
Expense ratio, head to head
FXAIX is literally half the fee, but half of an already-tiny number. In a taxable account, VOO's ETF tax efficiency usually outweighs this gap. Source: Fidelity summary prospectus and Vanguard VOO fact sheet, 2026.
The fee edge is real but small, a few dollars per $10,000 a year. It is easily outweighed by other factors, most notably taxes in a brokerage account, which we cover below. Do not choose between these two on the expense ratio alone. Use our compound interest calculator to see how small the gap stays even over decades.
How They Trade
This is the most noticeable day-to-day difference.
FXAIX trades once a day. You place an order any time, but it fills at the fund's net asset value calculated after the market closes. You can buy an exact dollar amount, say $500, with no leftover cash and no spread. There is no commission at Fidelity and no minimum. The downside: you cannot react to intraday price moves, and it is a Fidelity fund, so holding it at another broker is often unavailable or carries a transaction fee.
VOO trades all day like a stock. You see a live price and can buy or sell whenever the market is open, which matters to active investors and not at all to buy-and-hold ones. As an ETF it is fully portable, holdable at essentially any broker. The minor costs are a bid-ask spread (tiny for a fund this liquid) and, at some brokers, whole-share pricing unless fractional shares are offered.
The Taxable-Account Catch
Here is the factor that often outweighs the fee. In a taxable brokerage account, fund structure affects your tax bill.
ETFs like VOO use an in-kind creation and redemption mechanism that lets them shed appreciated stock without triggering taxable capital gains for shareholders. As a result, broad-index ETFs rarely pass through capital-gains distributions. A mutual fund like FXAIX has no such mechanism; when it sells holdings, it can distribute capital gains to shareholders, who then owe tax on them even if they never sold a share.
In practice, the gap is modest for FXAIX specifically, because it is an index fund with very low turnover (about 3% a year), so it realizes few gains to distribute. But the structural point stands: in a taxable account, VOO's ETF wrapper is generally more tax-efficient. The distinction disappears entirely inside a 401(k), traditional IRA, or Roth IRA, where distributions are not taxed year to year, which is exactly why FXAIX is such a popular default in Fidelity retirement plans.
Which One Fits You
Choose FXAIX if: you invest at Fidelity, especially in a 401(k) or IRA, you like buying exact dollar amounts with no spread, and you want the slightly lower fee. In a tax-advantaged account its one structural drawback does not apply, making it an excellent core holding.
Choose VOO if: you want a fund you can carry to any broker, you value intraday trading, or you are investing in a taxable account where the ETF structure's tax efficiency is worth more than FXAIX's tiny fee edge. If you are weighing VOO against other S&P 500 ETFs, see SPY vs VOO, and against the total U.S. market, VTI vs VOO.
FAQ
Is FXAIX or VOO better?
Neither is better in a vacuum. FXAIX has a slightly lower fee (0.015% vs 0.03%) and is ideal inside a Fidelity account or retirement plan. VOO is a portable, intraday-tradable ETF that is generally more tax-efficient in a taxable account. They track the same index, so returns are nearly identical.
Do FXAIX and VOO hold the same stocks?
Yes. Both track the S&P 500, so they own the same 500 companies in essentially the same weights. Any return difference comes from the small fee gap and structure, not from different holdings.
Is FXAIX good for a taxable account?
It is acceptable but not ideal. As a mutual fund it can distribute capital gains, though its very low turnover keeps those small. For a taxable account, VOO's ETF structure is usually more tax-efficient. In a 401(k) or IRA, FXAIX is a great choice with no tax drawback.
Can I buy FXAIX outside Fidelity?
Often not easily. FXAIX is a Fidelity proprietary fund; other brokers may not offer it or may charge a transaction fee. If you want a fund you can hold anywhere, VOO, as an ETF, trades at virtually every broker.
Which is better for a Roth IRA?
Both are excellent. Inside a Roth, FXAIX's potential capital-gains distributions do not matter, so its slightly lower fee gives it a tiny edge, but VOO is equally sound if you prefer an ETF or may move brokers.
Related comparisons: SWPPX vs VOO · VFIAX vs VOO · SPY vs VOO · IVV vs VOO · VTI vs VOO · All ETF comparisons
Primary sources: FXAIX expense ratio, structure, minimum, and turnover are from Fidelity's SEC summary prospectus (dated Apr 29, 2026) and Quarterly Fund Review (as of Jun 30, 2026); VOO figures are from Vanguard's official VOO fact sheet (as of Jun 30, 2026). For how fund structures are taxed, see the SEC's Investor.gov guide to mutual funds and ETFs.
This article is for educational purposes only and is not investment advice. Investing involves risk, including possible loss of principal, and past performance does not guarantee future results. Tax treatment depends on your individual situation and can change. Expense ratios and fund assets change over time; confirm current figures on the issuer's site before investing. Consult a qualified financial or tax professional before making investment decisions.
