With so many commodities, stocks, bonds, and funds available, which one should you consider for your investment portfolio? Let’s compare FZROX and FSKAX to see which might be right for you.
First, let’s understand what these two mutual funds are so you can decide if they fit your investment strategy. We’ll look at their key differences, composition, performance, and fees to give you a clear idea of how they perform and if they’re suitable for your portfolio.
FZROX and FSKAX are index funds in the US stock market, both managed by Fidelity Investments. They aim to hold about 80% of their portfolios in stocks of publicly listed companies. While they have different names and slightly different investment models, they share many similarities. FZROX, launched in 2018, is the newer of the two, but both funds have shown positive performance in recent years.
FZROX is a Zero Total Market Index Fund designed to provide returns from a wide range of US stocks. It invests at least 80% of its assets in common stocks of publicly traded US companies, reflecting the US equity market. The fund uses statistical sampling based on factors like industry exposure, dividend yields, and earnings growth. While FZROX charges no fees, it’s still subject to market risks, including volatility influenced by political, economic, and regulatory factors.
FSKAX, or the Fidelity Total Market Index Fund, also invests about 80% of its assets in common stocks but focuses on the US Dow Jones. This means its performance is tied to a broad range of stocks in its portfolio. One notable difference is that FZROX investors cannot transfer their investments out of Fidelity without selling their holdings, which could incur capital gains tax unless in a tax-deferred IRA. FSKAX has an expense ratio of 0.02%, while FZROX has no fees.
Both funds have similar compositions, with many overlapping top stocks due to their weighted market cap nature. Their performances since inception have been comparable, with similar returns due to their similar compositions.
FZROX has no fees because Fidelity uses a loss-leader model to attract investors, promoting their brokerage services. Both FZROX and FSKAX require no minimum investment, making them accessible for beginners or those looking to diversify across brokers.
FZROX has performed well since its inception, increasing by 33.95% in one year, and is managed by Fidelity, a trusted brokerage. It pays dividends based on the value of your holdings and the performance of the stocks in the fund. FSKAX, being a mutual fund and not an ETF, is actively managed, with prices changing once a day.
Both funds offer strengths that could benefit your portfolio and financial plans. Your choice should depend on your financial status, capacity, and overall goals. Investing in either of these mutual funds is a solid step towards achieving your financial goals and independence. So, know where you stand and make the right decision for yourself.