FZROX Vs. FSKAX - Which Fund Is For You? (2024)

With all the different commodities, stocks, bonds, and funds available now, which one should you consider for your investment portfolio? Let’s find out by comparing FZROX vs. FSKAX and decide which one is for you?

Let’s discuss these two mutual funds and know what they are so you may determine if these can be something that you too can invest in for yourself.

We will look into the key differences, composition, performance, fees of both funds to give you a fair idea about how they perform and whether they are suitable investments to add to your portfolio.

FZROX Vs. FSKAX – Overview

FZROX and FSKAX are index funds in the US stock market that are basically mutual funds. The managers of these funds aim to have a portfolio of about 80% stocks of publicly listed companies in each fund. Both funds are the creations of Fidelity Investments.

While they have different names and slightly different investment models, they are similar in many aspects. Both FZROX and FSKAX are special mutual funds created by Fidelity, with FZROX being the newer fund created in 2018, and so far so good. Both mutual funds and their performance have been positive over the last couple of years.

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FZROX: Fidelity® ZERO Total Market Index Fund

FZROX is a Zero Total Market Index Fund released and managed by Fidelity Investments to provide investors with ROI from a wide range of US Stocks.

The strategy behind this fund is to invest at least 80% of the fund into buying common stocks of publicly-traded companies in the US stock market. Essentially, the fund is designed to reflect the US equity market.

Managers of FZROX use statistical sampling based on certain key factors like industry exposure, dividend yields, capitalization, price earning ratio, price-book value, and earnings growth, among others. With FZROX, you invest in the broad US market, while paying zero fees.

Like with all financial instruments, FZROX carries its own risk that you should be aware of. This mutual fund is susceptible to the volatility of stock markets not only in the US but international stock markets as well.

In a negative market situation, the value of FZROX can drop. Other factors that may affect its value include political climate, regulation, economic development, the current market situation, among other things. This isn’t any different from other mutual funds and index funds.

FSKAX: Fidelity® Total Market Index Fund

FSKAX or Fidelity Total Market Index Fund is another mutual fund issued by Fidelity Investments. The fund is designed to accommodate a broad range of US-based stocks of publicly-traded companies.

FSKAX invests about 80% of assets into common stocks trades in the US Dow Jones. So, if you go for this fund, expect the fund to react based on a wide range of stocks listed in the portfolio, not a single or few stocks.

FZROX Vs. FSKAX: Key Differences

As a potential investor looking to invest in either of these funds, you need to understand their differences to be well informed before making an investment decision. Now, both funds are more similar than they are different.

The main difference we see between both is that as a holder of FZROX, you cannot take your investments out of Fidelity without selling your holding. And doing that will mean you have to pay capital gains tax. However, if you are on a tax-deferred IRA, you don’t have to do that.

Another difference between both has to do with their expense ratio. FSKAX is much older than FZROX, and it has an expense ratio of 0.02%, which happens to be one of the best of any Total US Stock Market Index fund as of today. However, for FZROX, the expense fee is 0.00%, so holders of this fund pay nothing.

These are the main differences between FZROX and FSKAX.

FZROX Vs. FSKAX: Composition Differences

Another important part when comparing FZROX and FSKAX is their compositional differences. By this, we mean the major features of each fund and how they stack up together.

Now let’s take a look at the company stocks in FSKAX and how they rank:

Company Stocks in FZROX:

We can see that a lot of the top stocks in both indexes are similar. Because of their weighted market cap nature, the funds’ composition is similar.

FZROX Vs. FSKAX: Performance Differences

Now, let’s look at how these funds have performed individually since they were created. As we can see, both indices have similar returns. When we see that the composition is similar, we can expect their returns to be similar as well.

FSKAX Market Performance & Returns

FZROX Performance & Returns

FZROX is Fidelity Investment’s newer zero total market fund. First, let’s look at the funds’ performance.

FZROX Vs. FSKAX: Fees

Before you decide to invest in either FZROX or FSKAX, you must be aware of their fees. As mentioned, FZROX has a 0% fee while the fee for FSKAX is 0.02%.

The fees are compounded over time, but over 30 years, the fee would be about 0.69% of the total value of your portfolio.

As for FZROX, Fidelity Investments does not charge fees because they operate the fund under the loss-leader model. The zero-free marketing strategy is a means of attracting investors to choose their brokerage services to take advantage of their zero-fee fund.

If you’re looking for a low-cost mutual fund, both FZROX and FSKAX would be worth considering.

FZROX Vs. FSKAX: Minimum Investment

For both FZROX and FSKAX there’s no minimum investment. That means that both Fidelity mutual funds are perfect if you’re a beginner to investing or you want to diversify your investments across brokers.

For example, many Vanguard funds have a minimum investment of $3,000. These include:

• VFIAX
• VTSAX

If you want to know how VFIAX vs. VTSAX compares, or how VTSAX compares with other index funds like VTSAX vs. VTI or VTSMX vs. VTSAX you can read more in the respective articles.

Frequently Asked Questions – FZROX Vs. FSKAX

Here are some of the frequently asked questions to guide you in choosing which fund best suits your investment needs.

Is FZROX A Good Investment?

FZROX is a little over three years old after its creation in August 2018. If we looked at its one-year performance, it increased by 33.95%, which translated to $11.3 billion under the management and a twelve-month yield of 1.10%. So based on the results posted, it is an excellent investment.

Besides the data, it is managed by Fidelity Investments, a trusted brokerage with a track record of excellence and years of experience. So investing in this fund is a good idea as your money will be in good hands.

Does FZROX Pay Dividends?

Yes, FZROX does pay dividends. In its few years of existence, it has not failed to pay dividends at the end of a trading year. If you invest in this zero-fee mutual fund, the dividend you will get will depend on two factors. The value of your holdings and the performance of all the stocks in the funds.

Is FSKAX An ETF Or Mutual Fund?

FSKAX is a mutual fund, not an Exchange-Traded Fund (ETF). Mutual funds are often actively managed funds with a team that tries to beat the market. You buy directly from the fund and prices change once a day. An ETF is a passively managed fund that you can actively trade on the stock exchange floors, similar to the way you trade stocks.

In Summary – FZROX Vs. FSKAX

Both these mutual funds offer each their own key strengths and positives that could very well help your portfolio and, ultimately, your financial plans. The decision rests with you since choosing between the two should be based on your financial status, capacity, and overall goals.

One thing is important, investing in either of these mutual funds is a great way to reach your financial goals. So know where you stand now so you make the right decision for yourself. This is one more step towards your financial freedom. So buckle up, and enjoy the ride as you continue your journey to your financial independence.

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• VOO Vs. VOOG – Which One Should You Choose?
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• VUG Vs. VOO: A Comparison Of Two Popular ETF Funds

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