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Fidelity ZERO funds are exactly what they imply: mutual funds that cost their investors nothing in annual fees.

Many low-cost index funds out there—including traditional mutual fund investments from Fidelity itself—offer rock-bottom transaction costs that are only a few dollars annually for small account holders. But the Fidelity ZERO lineup has taken the war on low-fee investing to the next level. And until someone out there decides to actually pay you for maintaining an investment account, the expense ratios of 0.00% are the best you will find on Wall Street.

There’s no such thing as a free lunch, however. So why would Fidelity ZERO funds even exist? And if you’re the typical investor just looking for simple ways to play the equity market, are they right for you?

Read on as I provide the answers to these questions, and introduce you to the Fidelity ZERO lineup of funds.

Disclaimer: This article does not constitute individualized investment advice. These funds appear for your consideration and not as personalized investment recommendations. Act at your own discretion.

Why Invest With Fidelity?


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Before we get too far into Fidelity ZERO funds, let’s talk about the money manager itself.

Fidelity is a leader in mutual funds and exchange-traded funds (ETFs), and has been a force in the industry since the launch of its Fidelity Puritan Fund (FPURX) back in 1947.

Today, this premier mutual fund company has $12.4 trillion in assets under administration thanks to many successes over the intervening years. Star money managers include as Peter Lynch, the long-time manager of the Fidelity Magellan Fund (FMAGX) who averaged an incredible 29.2% per year between 1977 and 1990. And over the past three decades, Fidelity has built out its low-cost index funds as part of the movement to reduce expense ratios and transaction costs for individual investors.

That’s where the Fidelity ZERO funds come in.

But the basic reason Fidelity could even consider offering mutual funds with a net expense ratio of zero is because of the firm’s scale and stability. Apart from its thriving mutual fund and ETF product lines, Fidelity also operates one of the biggest brokerage houses in the United States. It’s also the largest record keeper of 401(k) plans, and one of the largest providers of 403(b) plans for nonprofit organizations. Fidelity also provides more than 23,000 companies with defined-contribution and defined-benefit plans.

In short, you have to have a significant size and diversification to offer zero-cost mutual funds as part of your business. And thanks to a rich history and a bright future, Fidelity can do exactly that.

Related: 17 Best Investment Apps and Platforms [Free + Paid]

What Are Fidelity ZERO Funds?


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Fidelity ZERO funds are free to own and have zero minimum investment requirements. But the catch is that you have to put your money at Fidelity to access them. Many mutual fund providers are happy to shop their wares out in the wider world, but the purpose of these investing vehicles is to get you to deposit your cash directly with Fidelity.

So if you’re a dedicated Vanguard or T. Rowe Price customer … you’re out of luck.

But if you’re agnostic about your provider, these mutual funds might be worth changing investment accounts—particularly since they are easy-to-understand and transparent index funds benchmarked to nearly the same list of stocks as other popular mutual funds.

A Quick Look at the ZERO Lineup

The current lineup of the four index funds that make up the Fidelity ZERO lineup right now are:

  • Fidelity ZERO Large Cap Index Fund (FNILX), which focuses on large U.S. companies.
  • Fidelity ZERO Extended Market Index Fund (FZIPX), which focuses on a broad range of mid- to small-capitalization U.S. companies.
  • Fidelity ZERO Total Market Index Fund (FZROX), which covers large, small, and midsized U.S. stocks.
  • Fidelity ZERO International Index Fund (FZILX), which includes stocks from both developed and emerging countries outside the U.S.

These mutual funds give you some of the most popular ways to slice and dice the global equity market.

We’ll get deeper into the details of each in a moment, but keep in mind that these four index funds are formulated independently. They are not necessarily meant to be held together as a group. For instance, the stocks in the Extended Market Index Fund is naturally part of the Total Market Index Fund. So unless you want total-market coverage but then want to amplify your mid- and small-cap exposure, you might want to just pick one or the other.

On the other hand, it might be appropriate to own both the International Index Fund alongside the Large Cap Index Fund, as one holds domestic stock and one owns foreign stock.

And of course, you can layer in any of the some 7,000 other mutual funds out there in the world if you so choose. Just make sure you’re looking closely at the holdings of each, as some index funds might hold almost the exact same stocks as one of these Fidelity ZERO options.

This is a long way of saying that you should think holistically about your portfolio as we dig into each Fidelity ZERO fund. Each is simply one tool in your toolbox, and its appropriateness depends very much on your unique and personal investing goals.

Related: 17 Best Stock Research & Analysis Apps, Tools and Sites

A Deeper Look at Each Fidelity ZERO Fund


Now, let me walk you through each of Fidelity’s four ZERO mutual funds.

1. Fidelity ZERO Large Cap Index Fund


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  • Type: Large-cap U.S. stock
  • Assets under management: $9.0 billion
  • Expense ratio: N/A
  • Dividend yield: 1.2%
  • Minimum initial investment: $0

The Fidelity ZERO Large Cap Index Fund (FNILX) is benchmarked to a proprietary index of 500 large-cap companies. This fund seeks exposure to the biggest names on Wall Street, including trillion-dollar tech titans like Apple (AAPL) and Microsoft (MSFT).

The components in this Fidelity index fund are incredibly similar to the flagship S&P 500 index, and not just because both have the same number of components. As of this writing, nine of the top 10 stocks are exactly the same, and even below that, the overlap is significant.

The allocations are slightly different, however, which also leads to a divergence in performance. For instance, the top 10 stocks represent about 31% of FNILX but 32% of the S&P. As a result of this different formulation, however, the Fidelity ZERO Large Cap Index Fund has actually outperformed, and was up more than 27% over 2023 vs. just under 27% for the S&P 500 Index.

Want to learn more about FNILX? Check out the Fidelity provider site.

Related: 7 Best Fidelity ETFs for 2024 [Invest Tactically]

2. Fidelity ZERO Total Market Index Fund


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  • Type: All-cap U.S. stock
  • Assets under management: $20.4 billion
  • Expense ratio: N/A
  • Dividend yield: 1.2%
  • Minimum initial investment: $0

Fidelity’s no-cost way to invest in a total investable market index, the Fidelity ZERO Total Market Index Fund (FZROX). This mutual fund comprises about 2,650 total U.S. stocks, including nearly every company listed on major domestic exchanges (save those that are very small and at risk of delisting in the near future).

Despite the long list of constituent companies, however, FZROX is decidedly top-heavy because it weights those stocks by their overall market value. As the most explicit examples, mega-cap tech stocks Apple and Microsoft represent more than 12% of the entire portfolio between the two of them. As a group, the top 10 holdings hold sway over about 27% of total assets.

That said, you probably don’t want the smaller and unknown names on Wall Street having too much impact on the portfolio anyway. Like the rest of the Fidelity ZERO lineup, this total market index fund is designed to be a core holding—and as such, reliance on blue-chip stocks might be perfectly aligned with your investing strategy.

Unlike the prior fund that was exclusively focused on these picks, however, FZROX does provide exposure to a wider array of stocks, which adds both some level of diversification and the chance to capture upside from small and midsized players.

Want to learn more about FZROX? Check out the Fidelity provider site.

Related: 11 Best Stock Advisor Websites & Services to Seize Alpha

3. Fidelity ZERO Extended Market Index Fund


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  • Type: Small- and mid-cap U.S. stock
  • Assets under management: $1.7 billion
  • Expense ratio: N/A
  • Dividend yield: 1.3%
  • Minimum initial investment: $0

The Fidelity ZERO Extended Market Index Fund (FZIPX) might not be as intuitive as the prior funds when you look at its name alone. But in a nutshell, FZIPX tracks the Fidelity U.S. Extended Investable Market Index, which looks beyond the usual suspects of big and well-known stocks on Wall Street and into the “extended” market of publicly traded companies.

Or, in other words, small- and mid-cap stocks.

That means the top holdings might be full of names you have never heard of, including asset manager Ares Management (ARES) and regional bank First Citizens Bancshares (FCNCA). But the good news is that this list of about 2,100 stocks is much more diversified than either of the prior funds, with no single position representing more than about 0.4% of the total portfolio, and the top 10 positions only representing 3.3% of total assets.

That’s what happens when you exclude the 500 biggest names on Wall Street, as the top stocks by market value tend to dominate most cap-weighted index funds.

If you’ve put two and two together, you probably have noticed that the extended-market FZIPX plus the first large-cap fund FNILX effectively add up to the total-market FZROX. Some investors prefer to get all their exposure at once, in which case, FZROX fits the bill. But many prefer to fine-tune their allocations by buying the two parts separately … and making them both Fidelity ZERO funds FZIPX and FNILX allows you to do exactly that, at no additional cost.

Want to learn more about FZIPX? Check out the Fidelity provider site.

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4. Fidelity ZERO International Index Fund


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  • Type: International large and midsized stocks
  • Assets under management: $4.1 billion
  • Expense ratio: N/A
  • Dividend yield: 2.8%
  • Minimum initial investment: $0

Looking beyond U.S. borders, the Fidelity ZERO International Index Fund (FZILX) offers international exposure in one simple index fund. There are roughly 2,300 total companies in this fund, too, providing big-time diversification even as it offers an expense ratio of absolutely nothing.

As is the case with U.S. index funds, this global fund is biased toward the largest names out there. The portfolio is led by multinational firms you might recognize, including chipmaker Taiwan Semiconductor Manufacturing (TSM), Swiss consumer giant Nestle (NSRGY) and Korean gadget giant Samsung, among others.

However, as an “ex-U.S.” mutual fund, this vehicle expressly excludes any companies headquartered in the United States. That ensures you’re 100% invested overseas, and that you can layer this Fidelity ZERO fund into any portfolio of domestic stocks without worrying about overlap.

At present, Japan leads the portfolio at about 17% of assets, followed by the U.K. at 9% and Canada at nearly 8%. It does have some weight in emerging markets, too, such as China at 5% of assets, and Taiwan at 5%. However, the average market cap of the stocks in this fund is around $36 billion, so you’re not buying aggressive startups in far-flung corners of the world. Indeed, the risk profile is similar to typical large-cap U.S. funds, just with a geographic twist.

Want to learn more about FZILX? Check out the Fidelity provider site.

Related: The 9 Best ETFs for Beginners

Learn More About These and Other Funds With Morningstar Investor


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If you’re buying a fund you plan on holding for years (if not forever), you want to know you’re making the right selection. And Morningstar Investor can help you do that.

Morningstar Investor provides a wealth of information and comparable data points about mutual funds and ETFs—fees, risk, portfolio composition, performance, distributions, and more. Morningstar experts also provide detailed explanations and analysis of many of the funds the site covers.

With Morningstar Investor, you’ll enjoy a wealth of features, including Morningstar Portfolio X-Ray®, stock and fund watchlists, news and commentary, screeners, and more. And you can try it before you buy it. Right now, Morningstar Investor is offering a free seven-day trial. You can check out the current deal, as well as discounted rates for students and teachers, in our details box below.

Related: How to Get Free Stocks for Signing Up: 13 Apps w/Free Shares

Frequently Asked Questions (FAQs)


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If I invest in Fidelity ZERO Funds, can I also own other mutual funds?

Absolutely! In fact, that may be what Fidelity is after by offering these zero-fee funds to begin with. By enticing you to move your money over to its platform, Fidelity then can enjoy the fees it can collect once you invest in other products.

And the reality is that some of those products are incredibly accessible and cost effective, even if they are not free like the Fidelity ZERO funds. For instance, the Fidelity 500 Index Fund (FXAIX) benchmarked to the popular S&P 500 Index charges just 0.015% in annual fees and has no investment minimums. That’s quite a bargain.

And of course, brokerage platforms like Fidelity are just the “plumbing” for your investment account. It’s completely possible to open a tax-deferred account like an IRA or a straightforward taxable investing account and just buy what you feel like—from individual stocks to ETFs to mutual funds from any provider.

The big question you have to ask yourself, as always, is what your end goals are. If Fidelity ZERO funds help you get there and you’re not opposed to keeping your cash on their platform, then you can invest with confidence and have the flexibility to add whatever other tools you need.

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Jeff Reeves is a veteran journalist with extensive capital markets experience, Jeff has written about the investing world since 2008. His work has appeared in numerous respected finance outlets, including CNBC, the Fox Business Network, the Wall Street Journal digital network, USA Today and CNN Money.

Jeff began his career in print, working at local newspapers in Virginia, Ohio, Arizona and North Carolina. In 2008, he joined InvestorPlace Media to edit monthly stock advisory newsletters and ultimately lead its digital news service for individual investors.