Wealthy PotFXAIX vs VTI: S&P 500 Mutual Fund or Total Market ETF?
FXAIX and VTI are two of the most popular low-cost stock funds in the country, and people often compare them as if they were the same thing from different companies. They are not quite. FXAIX is Fidelity's S&P 500 index mutual fund. VTI is Vanguard's total U.S. stock market ETF. They differ in what they own, how you buy them and what they cost, although in practice their results have been close, because the S&P 500's giants dominate both.
The Short Answer
- Coverage: FXAIX holds the S&P 500; VTI holds the whole U.S. market, about 3,500 stocks, including every S&P 500 company.
- Wrapper: FXAIX is a mutual fund priced once a day; VTI is an ETF that trades all day.
- Fee: FXAIX charges 0.015%, VTI 0.03%.
- Access: FXAIX is cheapest at Fidelity; VTI trades commission-free at most brokers.
FXAIX vs VTI Side by Side
| Feature | FXAIX | VTI |
|---|---|---|
| Full name | Fidelity 500 Index Fund | Vanguard Morningstar Total Stock Market ETF |
| Index | S&P 500 | Morningstar US Total Market Index |
| Number of holdings | 500-plus | 3,507 |
| Expense ratio | 0.015% | 0.03% |
| Wrapper | Mutual fund | ETF |
| Minimum | $0 | Price of one share (fractional shares at some brokers) |
Difference 1: What They Own
The S&P 500 covers large U.S. companies. VTI's index covers the whole investable market: those same large companies plus thousands of mid-sized and small ones. So everything FXAIX owns is inside VTI, and VTI adds about 3,000 more stocks.
Because both funds weight by market value, the large companies make up most of VTI too. That is why the two have tended to produce similar returns. The extra mid and small companies in VTI mean it does a little better when smaller companies lead and a little worse when the giants lead. If you want to own the entire market in one fund, VTI does that; if you are content with the S&P 500's large companies, FXAIX covers most of the market's value. The same trade-off is explored in VTI vs VOO.
Difference 2: Mutual Fund vs ETF
- Trading: you buy FXAIX at the day's closing price; VTI trades during market hours like a stock.
- Automatic investing: mutual funds make it easy to invest an exact dollar amount on a schedule. Many brokers now offer the same for ETFs through fractional shares, but not all.
- Taxes: in a taxable account, ETFs are generally more tax-efficient than mutual funds because of how they handle redemptions. In an IRA or 401(k), this does not matter.
- Portability: VTI can be bought and held at almost any broker. FXAIX is Fidelity's fund; other brokers may charge to buy it or not offer it.
For a fuller explanation, see ETF vs index fund.
Difference 3: The Fee
FXAIX costs 0.015% a year and VTI 0.03%, so VTI charges twice as much. In dollars that is $1.50 a year on every $10,000, or $15 on $100,000. It is a real advantage for FXAIX, and worth having if your account is at Fidelity. It is also small enough that coverage and convenience should usually decide first.
Which One Fits You
- Choose FXAIX if your account is at Fidelity, you like automatic dollar-amount investing, and the S&P 500 is the exposure you want.
- Choose VTI if you want the whole U.S. market, might change brokers, or invest in a taxable account where ETF tax efficiency helps.
- At Fidelity but want total market? FSKAX is Fidelity's total market mutual fund at the same 0.015% fee; see FSKAX vs VTI.
- Do not hold both expecting diversification. VTI already contains everything in FXAIX.
FAQ
Is FXAIX the same as VTI?
No. FXAIX tracks the S&P 500 as a mutual fund; VTI tracks the total U.S. market as an ETF. VTI contains every S&P 500 company plus about 3,000 more.
Which is cheaper, FXAIX or VTI?
FXAIX, at 0.015% a year against VTI's 0.03%.
Can I buy FXAIX outside Fidelity?
Some brokers offer it, often with a transaction fee. It is cheapest at Fidelity.
Is VTI more diversified than FXAIX?
Yes, in number of companies. By value the difference is smaller, because the largest companies dominate both.
Should I hold FXAIX and VTI together?
There is little reason to. Everything in FXAIX is already in VTI, so combining them mainly increases your weight in large companies.
This article is for general information and is not investment advice. Fund figures were taken from Fidelity's and Vanguard's published fund pages and can change; confirm current figures before you invest.