Imagine paying roughly $1.50 per year to invest $10,000 in a fund that tracks 500 of the largest companies in America. That is what FXAIX offers. It has one of the lowest expense ratios of any S&P 500 index fund in existence, no investment minimum, and a track record that mirrors the index almost perfectly.
For anyone starting a long-term investment portfolio, FXAIX is worth understanding in detail.
What Is FXAIX?
FXAIX stands for Fidelity 500 Index Fund. It is a mutual fund, not an ETF, that tracks the S&P 500 index. The S&P 500 includes 500 of the largest publicly traded U.S. companies weighted by market capitalization. Companies like Apple, Microsoft, Amazon, NVIDIA, and Alphabet typically make up the largest positions.
Because FXAIX passively tracks an index rather than relying on a fund manager to pick stocks, it keeps costs extremely low and largely removes human judgment from the investment process.
How It Works
FXAIX buys the same stocks in roughly the same proportions as the S&P 500 index. When the index goes up, the fund goes up by nearly the same amount. When the index falls, the fund follows. The goal is not to beat the market but to match it as closely as possible.
As a mutual fund, FXAIX does not trade on an exchange during market hours the way an ETF does. Instead, all buy and sell orders for mutual funds are processed once per day after the market closes, at the fund's net asset value (NAV). If you are weighing the tradeoffs between the two structures, a detailed look at index funds vs ETFs covers what each approach means in practice.
Key Details
- Expense ratio: 0.015%
- Investment minimum: None
- Fund type: Mutual fund (not an ETF)
- Available at: Fidelity only
- Benchmark: S&P 500 Index
- Dividend schedule: Quarterly
The expense ratio of 0.015% means you pay $1.50 per year for every $10,000 invested. This is among the lowest of any fund tracking the S&P 500. Among Fidelity-specific options, a side-by-side look at FSKAX vs FXAIX is worth reading if you are deciding between Fidelity's total market fund and its S&P 500 fund.
Because FXAIX is a mutual fund rather than an ETF, it is only purchasable through a Fidelity account. You cannot buy it at Robinhood, Schwab, or most other brokerages. However, you can access Robinhood and buy comparable ETFs like VOO, SPY, or IVV that track the same S&P 500 index with similarly low costs.
Robinhood
Robinhood
Robinhood is a trading platform that brings stocks, ETFs, options, futures, prediction markets, crypto, and retirement accounts together in one app.
Standout feature
One platform for stocks, ETFs, options, futures, prediction markets, and crypto
Fees
$0 commission on stocks, ETFs, and options.
Pros
Zero-commission trading on stocks, ETFs, and options
Cons
Best perks (high APY, lower margin rates) require Gold subscription ($5/month)
FXAIX vs Comparable ETFs
If you do not have a Fidelity account or prefer to trade on another platform, several ETFs track the same S&P 500 index:
| Fund | Type | Expense Ratio | Minimum | Available At |
|---|---|---|---|---|
| FXAIX | Mutual Fund | 0.015% | None | Fidelity only |
| VOO | ETF | 0.03% | None (fractional shares available) | Any brokerage |
| SPY | ETF | 0.0945% | None | Any brokerage |
| IVV | ETF | 0.03% | None | Any brokerage |
VOO and IVV are the closest ETF equivalents to FXAIX, with nearly identical holdings and very low costs. SPY has slightly higher fees but trades with extremely high volume, making it popular for active traders. A direct comparison of SPY vs VOO can help you decide between the two most widely held S&P 500 ETFs. For long-term investors, FXAIX, VOO, and IVV are all excellent choices. When evaluating which broker to use, Fidelity vs Charles Schwab is a useful read for investors who have not yet settled on a platform.
Pros and Cons of FXAIX
Pros:
- Extremely low expense ratio (0.015%)
- No investment minimum
- Automatically diversified across 500 large U.S. companies
- Tracks a well-known, time-tested index
- Dividend reinvestment is easy within Fidelity
Cons:
- Only available at Fidelity
- Does not trade intraday like an ETF
- Concentrated in large-cap U.S. stocks (no international or small-cap exposure)
- Performance mirrors the S&P 500, so it will fall during broad market downturns
Who FXAIX Is For
FXAIX works well for investors who already have or plan to open a Fidelity account, prefer a set-it-and-forget approach, want the lowest possible fees, and are comfortable with the ups and downs of the U.S. stock market. Investors who want to compare all major providers together can reference this breakdown of Schwab vs Fidelity vs Vanguard before deciding.
It is not ideal for investors who want international exposure, need to trade during market hours, or use a brokerage other than Fidelity.
Common Scenarios
New investor starting a Roth IRA at Fidelity: FXAIX with automatic monthly contributions is a simple, low-cost strategy that many financial planners recommend for beginners. If you want to compare the full lineup of best S&P 500 mutual funds, including FXAIX, VFIAX, and SWPPX, that guide covers all the major options side by side.
Investor at Robinhood who wants similar exposure: VOO or IVV are practical alternatives with nearly identical S&P 500 exposure and very low expense ratios.
Investor who wants broader U.S. coverage: Pair FXAIX with a small-cap or total market fund to extend beyond the 500 largest companies.
Frequently Asked Questions
Is FXAIX the same as an S&P 500 ETF?
FXAIX tracks the same index as ETFs like VOO, SPY, and IVV, but it is a mutual fund rather than an ETF. The practical differences include when trades execute (end of day for FXAIX vs throughout the day for ETFs), where you can buy it (Fidelity only for FXAIX vs any brokerage for ETFs), and how shares are priced. Long-term performance is nearly identical across all of them.
Does FXAIX pay dividends?
Yes. FXAIX distributes dividends quarterly. These come from the dividends paid by the underlying S&P 500 companies. Inside a Fidelity account, you can choose to have dividends automatically reinvested to buy more fund shares, which can help compound growth over time.
Can I buy FXAIX in an IRA?
Yes. FXAIX is available in Fidelity Traditional IRAs, Roth IRAs, and other account types. Many investors hold FXAIX as the core holding in a retirement account due to its low cost and broad diversification. Holding it inside an IRA shelters dividends and capital gains from taxes each year.
What is the minimum amount I need to invest in FXAIX?
FXAIX has no minimum investment requirement. You can start with as little as $1 at Fidelity. This makes it accessible to investors who are just getting started and want to build their position gradually over time.
