Choosing between the Fidelity 500 Index Fund (FXAIX) and the Fidelity Total Market Index Fund (FSKAX) can be a key decision for investors who want passive exposure to the U.S. stock market. Both funds are low-cost, diversified, and backed by Fidelity's strong reputation, but they serve slightly different investment purposes.
Here, we compare the two funds in depth based on holdings, diversification, performance, risk, fees, and which type of investor each one suits best.
Quick Overview
| Feature | Fidelity 500 Index (FXAIX) | Fidelity Total Market (FSKAX) |
|---|---|---|
| Tracks | S&P 500 | Dow Jones U.S. Total Stock Market |
| Number of Holdings | ~500 | ~4,000 |
| Expense Ratio | 0.015% | 0.015% |
| Diversification | Large-cap only | Large, mid, and small-cap |
| Historical Volatility | Slightly lower | Slightly higher |
| Minimum Investment | $0 | $0 |
| Launch Date | 1988 | 2011 |
What Is the Fidelity 500 Index Fund (FXAIX)?
The Fidelity 500 Index Fund is designed to mirror the performance of the S&P 500 Index, which represents the 500 largest publicly traded U.S. companies. It includes big names like Apple, Microsoft, Amazon, and Johnson & Johnson.
Benefits:
Exposure to 80% of the total U.S. market cap
Less volatility than smaller-cap funds
Strong historical performance
Best for:
Conservative long-term investors
Those seeking stable, large-cap equity exposure
What Is the Fidelity Total Market Index Fund (FSKAX)?
FSKAX aims to replicate the performance of the Dow Jones U.S. Total Stock Market Index, offering a much broader exposure to U.S. equities, including large-, mid-, and small-cap stocks.
Benefits:
More diversified than FXAIX
Exposure to small and mid-sized companies with higher growth potential
Captures the full U.S. equity market
Best for:
Investors seeking maximum diversification
Those with long time horizons and higher risk tolerance
Performance Comparison (as of Q1 2025)
| Time Period | FXAIX (500 Index) | FSKAX (Total Market) |
| 1-Year Return | 22.1% | 21.6% |
| 3-Year Annualized | 10.9% | 10.8% |
| 5-Year Annualized | 12.2% | 12.1% |
Data: Morningstar, Fidelity
Both funds perform very similarly because large-cap stocks dominate both indexes. However, in strong bull markets, FSKAX may outperform slightly due to small-cap exposure.
Diversification Differences
While FXAIX holds ~500 of the largest companies, FSKAX includes over 4,000. This means:
FXAIX is top-heavy and more concentrated in large-cap stocks.
FSKAX includes sectors and companies that may be overlooked in the S&P 500.
If small-cap companies rally, FSKAX may capture gains that FXAIX misses. But in down markets, small caps tend to underperform, which can add risk.
Fees and Expenses
Both funds have identical ultra-low expense ratios (0.015%), making them among the cheapest in the industry. There are:
No load fees
No minimum investment
No transaction fees when held in Fidelity accounts
This makes either fund ideal for long-term, cost-conscious investors.
Tax Efficiency
Both funds are relatively tax-efficient due to low turnover and index-tracking strategies. FXAIX may be slightly more tax-efficient in some years due to:
Lower trading volume
Lower turnover among large caps
But in most cases, the tax difference is negligible unless you're investing through a taxable account.
Which Fund Is Right for You?
Choose FXAIX (500 Index Fund) if:
You want simple, large-cap exposure
You prefer a lower-risk U.S. equity option
You're new to investing and want a stable core holding
Choose FSKAX (Total Market Fund) if:
You want broader market exposure
You have a longer time horizon and higher risk tolerance
You want a one-fund solution for your entire U.S. stock allocation
Expert Opinions
John Rekenthaler, Morningstar:
"For most investors, total market index funds like FSKAX offer slightly better diversification, but the difference is modest."
Christine Benz, Director of Personal Finance at Morningstar:
"Both FXAIX and FSKAX are excellent choices. The right one depends on whether you want a leaner or broader equity exposure."
Frequently Asked Questions (FAQ)
Q: Is FSKAX better than FXAIX?
A: Not necessarily. FSKAX is more diversified, but FXAIX may be slightly less volatile. Both are excellent low-cost options.
Q: Can I own both funds?
A: Yes, but it may be redundant. FSKAX already includes the S&P 500 companies held in FXAIX.
Q: Which fund is better for beginners?
A: FXAIX is slightly simpler and may suit new investors better. However, both are beginner-friendly.
Q: Do these funds pay dividends?
A: Yes, both distribute dividends quarterly based on the underlying companies.
Final Thoughts
Both the Fidelity 500 Index Fund (FXAIX) and the Fidelity Total Market Index Fund (FSKAX) are top-tier options for low-cost, passive U.S. equity investing. The choice ultimately comes down to your personal goals, risk tolerance, and preference for simplicity vs. diversification.
If you're unsure, FSKAX provides broader exposure and can act as a one-stop-shop. FXAIX, on the other hand, is a tried-and-true large-cap powerhouse. Either way, you’re getting excellent performance, ultra-low fees, and Fidelity’s trusted fund management.