FXAIX vs. VTI - Which is Better?
FXAIX and VTI are both broad-market ETFs that make a great core investment holding.
However, there are differences you should understand before picking one to invest in.
Overview of FXAIX vs. VTI
FXAIX tracks the S&P 500
VTI tracks the total stock market
FXAIX has historically outperformed VTI
VTI has a higher expense ratio than FXAIX
Analyzing Fund Holdings: Comparing FXAIX and VTI
The critical variation between FXAIX and VTI is the indices they track, translating to differences in their holdings.
The FXAIX mirrors the S&P 500 and, therefore, consists of 500 U.S. large-cap stocks.
On the other hand, VTI provides comprehensive exposure to the entire U.S. market, holding over 3,500 shares across different market capitalizations.
Therefore, VTI is definitely best for investors looking for the most diversification.
FXAIX vs. VTI Expense Ratios
FXAIX - 0.015%
VTI - 0.03%
Another crucial factor to consider when choosing an index fund is the expense ratio or the annual fee that funds charge their holders.
FXAIX’s expense ratio stands at a low of 0.015%. Coincidingly, VTI also exudes competitiveness in this arena, featuring a fee of 0.03% per year.
Both funds, therefore, provide extremely cost-efficient options for investors.
FXAIX vs. VTI - Performance Comparison
Historically, the S&P 500 (FXAIX) has outperformed the total stock market (VTI).
However, VTI is much more diversified than FXAIX, meaning it won’t be as volatile in bearish markets.
Ultimately, both FXAIX and VTI will provide similar returns to the overall stock market, as they are both broad market funds.
FXAIX vs. VTI - Dividends
VTI - 1.60%
FXAIX - 1.55%
When it comes to dividend yields, VTI comes out on top, but not by much. Since the difference is so small, the dividend yield isn’t a significant comparison factor.
For dividend-seeking investors, consider other dividend-focused ETFs like VIG or VYM. Additionally, income ETFs like JEPI are excellent dividend payers also.
FXAIX vs. VTI - Bottom Line
Both FXAIX and VTI have their own set of strengths. FXAIX’s low expense ratio and exposure to large-cap stocks make it a promising choice for market participants focusing on the S&P 500.
In contrast, the VTI provides an excellent tool for investors interested in extensive diversification across the total U.S. market.
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FAQ
What is Fidelity’s Equivalent to VTI?
While Fidelity’s FXAIX aligns with the S&P 500, the closest alternative to VTI is Fidelity’s FSKAX or the Fidelity Total Market Index Fund. It provides investors with comprehensive exposure to the U.S. market with 3,500 different holdings. Like VTI, FSKAX offers a low expense ratio of 0.015%, making it a sound choice for low-cost, diversified exposure to the US market.
