Comparison of Index Funds: Vanguard vs. Fidelity Zero Index Funds

by | Nov 11, 2023 | Vanguard IRA | 17 comments

Comparison of Index Funds: Vanguard vs. Fidelity Zero Index Funds




Let’s look at vanguard vs fidelity and find out who has the best index funds. Fidelity zero index funds are the newest offering to try and dethrone vanguard index funds, but are the fidelity zero funds actually better than vanguards funds? In this video I’ll compare all the pros and cons of fidelity vs vanguard index funds and recommend to you who I think has the best index funds on the market.

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0:00 – Intro
1:07 – Thanks KJ!
1:40 – Round 1 – Expense Ratio
3:15 – Round 2 – Minimum Investment
3:48 – Round 3 – Availability
4:30 – Round 4 – Index ETFs
5:30 – Round 5 – History
6:33 – Round 6 – Benchmark
7:46 – How Can Fidelity Zero Funds Be Free?
9:47 – And the Winner Is…

#vanguardvsfidelity #bestindexfunds #fidelityvsvanguard

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I am not intending to, nor licensed to give personalized financial advice. I’m merely trying to share my knowledge and experience so that you are able to make better financial and investment decisions for yourself based on your own research!

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When it comes to investing in index funds, Vanguard and Fidelity are two of the most well-known and reputable companies in the industry. Both offer a wide range of index funds that cater to different investment goals and risk tolerance levels. However, in recent years, Fidelity has made a big splash in the industry with the introduction of their “Zero” index funds, which come with a 0% expense ratio. This has sparked a debate among investors about which company offers the best index funds – Vanguard or Fidelity Zero index funds.

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Vanguard has long been known as the pioneer of index fund investing, with its flagship index fund, the Vanguard 500 Index Fund, being the first of its kind when it was introduced in 1976. The company has built a strong reputation for offering low-cost, high-quality index funds that provide investors with broad diversification and low tracking error. Vanguard’s index funds are known for their low expense ratios, which helps to keep costs down and maximize returns for investors.

On the other hand, Fidelity has emerged as a strong competitor in the index fund space with the introduction of its Zero index funds. These funds have garnered a lot of attention because they come with a 0% expense ratio, meaning that investors pay no fees to invest in these funds. This has made Fidelity a popular choice for cost-conscious investors who want to minimize expenses and maximize returns.

So, which company has the best index funds – Vanguard or Fidelity Zero index funds? The answer ultimately depends on the individual investor’s specific investment goals, risk tolerance, and preferences.

Vanguard is known for its wide range of index funds that cover various asset classes, including stocks, bonds, and international equities. The company also offers a variety of target date funds, which automatically adjust the asset allocation over time to match the investor’s retirement date. Vanguard’s index funds have a long track record of performance and a strong reputation for low costs, making them a solid choice for long-term investors who want to build a diversified portfolio with minimal expenses.

On the other hand, Fidelity Zero index funds offer a unique value proposition with their 0% expense ratio. This can be very appealing for investors who prioritize cost and want to keep expenses as low as possible. Fidelity’s Zero index funds currently cover large-cap U.S. stocks, mid-cap U.S. stocks, and total U.S. market stocks, so investors may have limited options compared to Vanguard’s broader range of offerings.

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In conclusion, both Vanguard and Fidelity offer excellent index funds that cater to different investment needs. Vanguard is well-established and known for its low-cost, high-quality index funds, while Fidelity Zero index funds offer a unique value proposition with their 0% expense ratio. Investors should carefully consider their individual investment goals, risk tolerance, and preferences before deciding which company has the best index funds for their needs. Ultimately, the best choice will depend on each individual’s specific circumstances and objectives.

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17 Comments

  1. Chess Dad

    I think I would agree that Vanguard by a hair. But both are great.

  2. Mr. Berry

    Team Fidelity Index mutual funds! No barrier to entry and lower expense ratio. Also FZROX has outperformed VTSAX since inception. Also if you want a Fidelity fund that has a long history, go with FSKAX that has a long history and a lower expense ratio than VTSAX. You left that out to spin it in Vanguard's favor.

  3. Bob Wright

    FSKAX is a better comparison to VTSAX. It has an expense ratio of .015%, it has been in operation since 11/05/1997, and it can be purchase at other brokers. (I checked Schwab). The zero funds are for their customers, not the general public, and I personally am not a fan. Fidelity has an S&P 500 fund called FXAIX. It's expense ratio is also .015% and has been around since 1988. I don't think you did Fidelity justice.

  4. Alicia Dion

    Loved this video! Solid, in-depth breakdown!

  5. Six Figure Business Coaching

    Really gave great comparison between the two! This is so helpful for those who don't know the vanguard and fidelity pros and cons 🙂

  6. Yes To Tech

    Wow! This was such an amazing breakdown! Thanks so much for sharing your expertise with us Jay!

  7. Ortal Levitan

    Thanks so much for sharing this information! you clearly know what you're talking about and the amount of detail you go into when explaining this just showcases your expertise

  8. Ak Moore

    Very informative Jay. My wife is investing in fidelity. You now have a new subscriber.

  9. Ashley & JC - Trying to get FIREd

    We just started using fidelity, but only for individual stocks so far. Thanks for the side by side comparison on the 2 for indexes

  10. PierceJP

    Can’t go wrong with either! Great video my man!

  11. Andrew Lopez

    Interestingly, over the past year, the Fidelity fund is up around 2 or so percent more than the vanguard fund but as you mentioned, likely due to the benchmark used and need a longer data set for it

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