If you are like most investors, you will most likely want to make sure that every single asset on invest in fits your investment portfolio. When discussing index funds, two examples that fund their way into the discussion are FXAIX vs. FSKAX.
Many investors are looking to diversify their investment portfolios because it’s a well-known method to improve and enhance your investment strategies. But which fund will help improve and grow your retirement accounts? There are so many funds available, knowing which funds to invest in is very important.
Proper allocation is as important as knowing and having suitable asset classes. So let’s discuss two publicly-traded funds that may help your total return down the line.
FXAIX Vs. FSKAX – Overview
FXAIX and FSKAX are index funds created by Fidelity Investments, and they remain top choices for investors looking to invest in long-term holdings. FSKAX has a lower rate of return over the last five years at 17.98% compared to FXAIX’S 18.52% returns for the same period.
However, they both have the same expense ratio of 0.02%, which is relatively low. So the question many will begin to ask themselves is which one they would rather go for.
Essentially, that is what reviews like this are meant for. We will take the time to review both FSKAX and FXAIX in great detail. We will provide you with their current data, and in the end, the choice will be yours to make.
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FSKAX: Fidelity® Total Market Index Fund
FSKAX or Fidelity Total Market Index Fund is created by Fidelity Investments. This fund covers a wide range of assets in the US stock exchange. FSKAX tracks common stocks in the Dow Jones US Total Market Index and invests about 80% of assets into such stocks.
Due to the broad range of stocks, it is one of the most diversified funds in the market today. Known in full as Fidelity Spartan Total Market Index Fund, investing in it is a no-brainer.
We say this because it has a very low expense ratio of 0.02% and holds more than 3,000 stocks covering many industries. It means that the poor performance of a few stocks will not affect the fund’s overall value much, which is great news for long-term investors.
It explains why many portfolio managers and retirement investment planners use it as a core fund due to its diversity and value.
FSKAX had asset holdings worth almost $71.51 billion across 3,964 different stocks, most of which are Dow Jones Index stocks. Some of the high percentage assets you will find in FSKAX include Microsoft, Apple, Johnson & Johnson, and many others.
So if you initially had any doubt about investing in FSKAX or FXAIX, you may want to think again. Fidelity is a household name as far as fund management is concerned, and FSKAX is one of its most popular funds to date.
You will find almost all the funds in the Dow Jones as part of its holdings with positive returns posted over their last few years and beyond, as you will see from our data table.
For those looking for long-term investments or those who wish to invest in a retirement fund like 401(k), funds like FSKAX are outstanding securities to invest in because they offer long-term value.
Let’s take a look at FSKAX’s top holdings to give us a fair idea about just how valuable the fund could be.
FSKAX top 10 holdings representing 21.48% of all assets:
|Meta Platforms Inc. Class A||1.81%|
|Alphabet Inc. Class A||1.62%|
|Alphabet Inc. Class C||1.59%|
|Berkshire Hathaway Inc. Class B||1.26%|
|JPMorgan Chase & Co.||1.14%|
|Johnson & Johnson||1.02%|
FXAIX: Fidelity® 500 Index Fund
The second Fidelity Investments fund we want to review is FXAIX or Fidelity 500 Index Fund. Fidelity has a track record of creating popular funds for investors, and FXAIX is another success story.
FXAIX is an index fund that tracks the returns of stocks in the S&P 500 Index. For those who don’t know the S&P 500 index, this is a class created for the 500 highest market cap companies in the US stock market. These stocks are highly valued and less volatile.
FXAIX seems to invest nothing less than 80% of its investment into stocks in the S&P 500 to generate income. Another way managers earn income for the fund is to lend some of its securities. Managers also use statistical sampling techniques to identify the right stock to invest in and what proportion.
Just like in FSKAX, most of the stocks you will find in FXAIX are large-cap stocks of mega-companies like Apple, Amazon, NVIDIA, and many more. FXAIX can withstand price and industry shocks with stocks spread across different industries due to its strong diversification features.
If some selection of stocks performs poorly, it will not affect the overall performance of FXAIX as much.
FXAIX has more than 500 different holdings to the value of $399.36 billion. Since 2011 when it was launched, it has also done quite well for investors, posting a return of 18.52% over the last 5 years.
Let’s now review the top ten holdings of FXAIX. Here are FXAIX’s top 10 holdings representing 29.08% of all assets:
|Alphabet Inc. Class A||2.27%|
|Alphabet Class C||2.13%|
|Meta Platforms Inc. Class A||1.97%|
|Berkshire Hathaway Inc. Class B||1.36%|
|JPMorgan Chase & Co.||1.30%|
FXAIX Vs. FSKAX: Key Differences
FXAIX vs. FSKAX are index funds, but they have certain differences. The first difference you will notice is that FXAIX has a much larger asset volume and market cap than FSKAX.
Then when we dig into the technical details, you will realize that while FXAIX tracks stocks in the S&P 500, FSKAX tracks assets in the Dow Jones Index. This difference is perhaps the most evident between the two.
Besides these two differences, there is very little or nothing to separate them since they have the same expense ratio of 0.02% and seem to track the same company stocks.
Furthermore, they are issued by the same issuer, so there is nothing much to separate them.
FXAIX Vs. FSKAX: Composition Differences
Let’s review their composition differences to have a clear understanding of FXAIX vs. FSKAX.
|Type||Index Fund||Index Fund|
|Issuer||Fidelity Investments||Fidelity Investments|
|Net Assets||$77.51 billion||$399.36 billion|
FXAIX Vs. FSKAX: Performance Differences
But how do both stack up against each other in terms of their performance? Let’s have a look.
FSKAX Performance & Returns
FXAIX Performance & Returns
FXAIX Vs. FSKAX: Fees
FXAIX and FSKAX have the same expense ratio of 0.02%. Their management fees are quite affordable, so they are called low-cost index funds.
FXAIX Vs. FSKAX Frequently Asked Questions
Here are some questions that can help you better understand FXAIX and FSKAX.
Is FXAIX A Good Investment?
FXAIX is indeed a good investment to make because its expense fee is very low, and the stock holdings are quite valuable. Moreover, the fund has paid investors consistent dividends over the past 10 years.
Does FXAIX Pay Dividends?
Yes, it does. The current dividend payout is at 1.54%. Now those are good capital gains for your investment.
Is FXAIX Better Than FSKAX?
It depends on who you ask. FXAIX has a much larger market cap and tracks more stocks than FSKAX. However, it posts the same returns similar to FSKAX. Moreover, they also have the same expense ratio, so very little separates them in value and performance.
FXAIX Vs. FSKAX – Which Fidelity Index Fund Should You Buy?
Now that we have run through the different details of these index funds let’s answer which one you should buy? The answer is simply dependent on you as an investor.
These commodities each have their own pros and cons to help your passive investing needs. Both can boost your portfolios which will ultimately help your long-term goal for financial independence and financial freedom.
Both funds offer the possibility of a high yield based on their past performance. The main thing to consider is which fund is aligned to your current personal finance and overall plans and goals.
Investing can really help boost your money down the line. So make the choice now and grow your net asset value through this investment strategy. You have started understanding these trades, now is the time to act and enhance your prospectus.
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Marjolein is a financial consultant who has built over €4,000 monthly passive income and saves over 70% of her income. Read Radicals’ inspiring story, from stuck in the 9-to-5 to loving life. Feel free to send Radical a message at the bottom of this page