FNILX vs. VOO: ETF or Mutual Fund? Which Is Suitable For You?

Should you invest in an index fund or an ETF? In a face-off between FNILX vs. VOO, which one should you choose for your investment portfolio to diversify and earn money through passive investing? 

Many investors try to find the best way to manage their portfolios. They seek investment strategies that fit their budget and lifestyle and can earn money passively. If you want to invest your hard-earned money like them, you can opt to invest in stocks or bonds or through passively-managed funds like an index fund or exchange-traded fund (ETF) investing.

While there are plenty of options for mutual funds and ETFs, this article compares two prominent funds, the Fidelity Zero Large Cap Index Fund (FNILX) and the Vanguard ETF VOO. 

Having a basic idea about the primary aspects of VOO and FNILX, you can use the information provided in this article to assess which is a better option for you before investing in funds.

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FNILX: Fidelity® ZERO Large Cap Index Fund

FNILX is a Fidelity Zero Large Cap Index Fund established in 2018. 

FNILX aims to provide investment results that parallel the total returns of the US-based large-capitalization companies’ stocks. It tracks the S&P 500 Index and has 503 stocks in its portfolio.

The Fidelity US Large Cap Index is a market capitalization-oriented index, which is float-adjusted and mirrors the stock performance of the large-capitalization US-based companies. Around 80% of the FNILX portfolio comprises assets in the common stocks of the companies in the Fidelity US Large Cap Index.

The FNILX portfolio comprises approximately $5.4 billion in net assets. This investment fund is characterized by consistent returns while maintaining costs at zero and investment in 100% local equity. It implies that, currently, this fund charges no management fees, with an expense ratio of FNILX is 0%. 

The mutual fund FNILX is only offered by the investment management and fund company Fidelity. If you want to invest in FNILX, you may have to open an account in Fidelity. There is no minimum initial investment for FNILX, so you can even begin with an investment as low as $100.

VOO: Vanguard 500 Index Fund ETF

The exchange-traded fund, VOO, is offered by the Vanguard Group and also tracks the S&P 500 Index. The S&P 500 Index represents the largest 500 publicly-traded US-based companies. VOO has around 508 stocks and net assets amounting to around $816 billion.

Vanguard states that VOO is envisioned to closely track the return of the S&P 500 Index, which is a measure of the overall returns of the US stocks. Thus, VOO is considered a diverse fund, having stocks from various sectors. VOO has a yield of 1.28%.

85% of the total portfolio of VOO is composed of large-cap names, while the remaining portfolio consists of mid-cap names. 

It is considered one of the most cost-efficient ETFs, with a low-cost expense ratio of 0.03%. The minimum requirement for investing in VOO is equivalent to one share.

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Image Credit: iwatchwater/Depositphotos.

FNILX vs. VOO: Key Differences

The major difference between FNILX and VOO is that while FNILX is a mutual fund, VOO is an ETF or exchange-traded fund. Some of the other key differences are mentioned below.

  • FNILX is offered by Fidelity, while the Vanguard Group offers VOO.
  • As for expense ratios, FNILX has zero transaction costs, while VOO has 0.03%.
  • FNILX does not require a minimum initial purchase requirement, while VOO’s minimum investment requirement is equivalent to 1 share. 
  • FNILX is a medium-size fund and has $5.8 billion in total net asset value, while VOO is a much bigger fund in comparison with almost $816 billion in total asset value.
  • While other platforms offer ETFs like VOO, including investment websites and apps, a mutual fund like FNILX is offered by the platforms that have issued them; in this case, the Fidelity Funds. 
  • Since VOO is an ETF, it is traded all day. On the other hand, since FNILX is a mutual fund, it is traded once a day.
  • FNILX has an average yield of 1.04%, while VOO has 1.28%.

FNILX vs. VOO: Composition Differences

FNILX and VOO are large blend funds of US stocks and comprise more or less the same investments. 

Here are the top 10 holdings for FNILX. These holdings comprise approximately 28.44% of the total assets portfolio of FNILX.

S.NOCompany NameAssets Percentage
1Apple Inc6.95%
2Microsoft Corp5.95%
3Amazon Inc3.33%
4Alphabet Inc A2.08%
5Tesla 1.94%
6Alphabet Inc Class C1.93%
7Meta platforms1.89%
8Nvidia Corp1.56%
9Berkshire Hathaway Class B1.46%
10Johnson and Johnson1.35%

Now let’s look at the top 10 holdings for VOO. They constitute approximately 28.42% of the entire portfolio.

S.NOCompany NameAssets in Percentage
1Apple Inc6.92%
2Microsoft Corp6.03%
3Amazon Inc3.60%
4Alphabet Inc A2.18%
5Alphabet Inc Class C2.03%
6Tesla 1.90%
7Nvidia Corp1.64%
8Berkshire Hathaway Class B1.58%
9Meta Platforms1.34%
10UnitedHealth group1.20%

As you can see from the comparison of the portfolio composition, it is more or less the same for both the funds in terms of the companies and their respective percentage composition. It implies that despite the differences in the nature of funds, they offer exposure to more or less the same large-cap stocks, and both have a large number of different stocks in their portfolio.

FNILX vs. VOO: Performance Differences

In earlier sections, we have seen that both funds have differences and similarities. If we look at the performance of the two funds, they have displayed more or less similar results. 

Here is a performance overview for FNILX:

S.NOPeriod Percentage Return
1Year-to-date-5.16%
21-month return3.63%
33-month return-5.16%
41-year return14.37%
53-year return19.05%
65-year returnN.A.
710-year returnN.A.

Since it was incepted in 2018, there has been no performance review for the 5-year and 10-year mark. From the table above, we can see that FNILX has performed well since its inception, while for the past 3 years, it has displayed an average annual return of 19.05% without any significant downs. 

Its composition as a large blend fund and the total return rates make FNILX a viable long-term investment option.

Now let’s look at the performance analysis of VOO. 

S.NOPeriod Percentage Return
1Year-to-date-12.97%
21-month return0.14%
33-month return-4.42%
41-year return-1.21%
53-year return15.03%
65-year return13.85%
710-year return14.28%

As for the past performance of VOO for the last 10 years, the performance of VOO has been quite strong, having gained around 14.28%, then losing -1.21% during one year and gaining 15.03% over 3 years, respectively.

FNILX vs. VOO: Fees

Funds fee review is an important comparison component. While a fee difference may not seem too significant in the short term, it can have a significant impact in the long run.

Stock Market Graph Financial Data Statistic finance Background
Image credit: wing-wing/Depositphotos.

For instance, consider two funds having an expense ratio of 1% and 0.02%. Considering the long-term scenario, the fee difference over 30 years may result in the portfolio with a higher fee having half of the total value.

In this case, FNILX and VOO have a similar fee ratio, with FNILX having a 0% fee and VOO having 0.03%. Thus, we can assume that FNILX is marginally better in this aspect. It offers you the opportunity to track the S&P 500 Index performance at no cost, while VOO charges some fees for the purpose.

In terms of performance, FNILX has exceeded VOO; however, VOO is more popular even though it has a 0.03% expense ratio. Both funds comprise roughly the same number of holdings and offer exposure to large-cap funds. Therefore, both VOO and FNILX are viable options for investment.

If you want to invest in FNILX, you can purchase it directly through Fidelity. However, if you want to purchase VOO, you can do so through Vanguard and other platforms like M1 Finance and Bux Zero.

Frequently Asked Questions (FAQs) – FNILX vs. VOO 

Is FNILX The Same As VOO?

Both FNILX and VOO track the performance of the S&P 500 Index. Both also have no minimum investment requirements. 

Their main difference is that while FNILX is an index mutual fund offered by Fidelity, VOO is an ETF from Vanguard. 

Is FNILX A Good Investment?

FNILX has shown impressive performance since its inception in 2018 and does not have a fee. In its best year, it has given returns of around 20.20%. 

Does FNILX Track the S&P 500? 

Yes, Fidelity Zero Large Cap Index Fund tracks the S&P 500 Index.

Is Tesla in FNILX?

Tesla is among the top 10 holdings of FNILX and constitutes around 1.94% of its net assets.

Conclusion – FNILX vs. VOO, 

The fund with the lowest associated costs, with adequate returns, would be the most sensible choice. While most people consider the S&P 500 ETFs and index funds the same in terms of functionality, the two have significant differences.

Index funds are bought or sold at a single point in a day; ETFs are traded throughout the day. ETFs are considered to have a lower management fee; not all index funds come with a higher expense ratio. The minimum investment for ETFs is lower than that of the mutual fund. However, exceptions are always there. It is also noteworthy that very few ETFs are available for fractional share purchase.

Whether you invest in an S&P 500 index fund or an ETF, they are both viable options to provide exposure and allow you to add large-cap stocks to your more diversified portfolio. To make the best choice, consider your own investment strategy and financial goals.

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