FSKAX vs. VOO - A Comprehensive Guide
In this article, we’ll take a deep dive into FSKAX vs. VOO to help you determine which is best for your portfolio.
FSKAX vs. VOO Overview
FSKAX and VOO may appear similar at first glance due to their broad market representation.
However, FSKAX seeks to replicate the performance of the Dow Jones U.S. Total Stock Market Index, which includes small, mid, and large-cap growth and value stocks in the U.S.
On the other hand, VOO seeks to mirror the performance of the S&P 500 Index, which consists of large-cap U.S. stocks only.
Expense Ratio Comparison
FSKAX - 0.015%
VOO - 0.03%
For investors looking to maximize every dollar, the difference in expense ratios, even on a small scale, could be significant.
FSKAX boasts an extremely minimal expense ratio of 0.015%. The VOO, although low in its own right, has a marginally higher expense ratio of 0.03%.
That implies that for a hypothetical investment of $10,000 in a year, you’d pay $1.50 for FSKAX and $3.00 for VOO.
Dividend Yield Comparison
VOO - 1.45%
FSKAX - 1.30%
The dividend yield is another crucial factor to consider when comparing FSKAX and VOO, as it significantly impacts total returns.
Both funds have relatively similar dividend yields, but the yield VOO provides is a bit higher. VOO only holds stable large-cap companies, which more commonly pay dividends.
FSKAX invests in nearly the entire stock market, meaning many more of its companies may not even offer a dividend.
Holdings Comparison
FSKAX holds a diverse range of over 3,500 different stocks across the entire U.S. equity market. Thus, it provides wider diversification in the U.S. market, including small, mid, and large-cap stocks.
VOO, on the other hand, holds about 500 stocks, those that make up the S&P 500 Index. Therefore, VOO essentially offers exposure to large-cap U.S. equity market sectors only.
Performance Comparison
When it comes to performance, the viewpoint will largely depend on market conditions. In flourishing market conditions where small and mid-cap stocks outperform, FSKAX may offer superior returns because of its wider market exposure.
On the other hand, in a bearish environment where large-cap stocks often perform better, VOO might deliver better performance. Therefore, understanding the potential market trends and personal risk tolerance remain vital while opting for either FSKAX or VOO.
Which is Better for You?
Deciding between FSKAX and VOO boils down to your personal preference and investment goals. If you want broader diversification that exposes you to the entire U.S. market (including the growth potential of smaller companies), the FSKAX might be ideal.
In contrast, if you prefer focussing on more stable and established large-cap companies, especially for executing strategies like covered call writing or selling cash-secured puts, VOO might work better.
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FAQ
Q: What is Fidelity’s equivalent of VOO?
The Fidelity equivalent of Vanguard’s VOO is the Fidelity 500 Index Fund (FXAIX). Just like VOO, FXAIX is designed to track the S&P 500 Index.
Q: What ETF is the FSKAX equivalent to?
FSKAX is similar to the Vanguard Total Stock Market ETF (VTI) as both aim to track the performance of the entire U.S. stock market.
Q: Is FSKAX a good index fund?
Yes, FSKAX is considered an excellent index fund due to its comprehensive exposure to the U.S. stock market, low fees, and robust long-term performance.
