Fidelity’s Zero-Fee Fund Outpaces Vanguard Total Market ETF With 81.75% Five-Year Return
Fidelity’s FZROX delivered 18.48% over one year and 81.75% over five years with zero expense ratio, versus VTI’s 17.67% and 65.3% respectively. Top holdings include Apple, Nvidia, and Microsoft, and FZROX’s proprietary index avoids licensing fees enabling its zero-cost structure.
1. Comparative Performance Versus Vanguard Total Market ETF
Over the past year, FZROX achieved 18.48% returns versus Vanguard Total Market ETF’s 17.67%, and over five years FZROX’s 81.75% outpaced VTI’s 65.3%. SPDR S&P 500 ETF returned 17.69% and 75.69% over the same periods, highlighting the zero-fee fund’s competitive edge.
2. Zero Expense Ratio Structure
Since its August 2018 launch, FZROX has maintained a 0.00% expense ratio by tracking Fidelity’s proprietary U.S. Total Investable Market Index. This zero-cost structure is made possible by avoiding royalty payments to independent index providers.
3. Concentration in Mega-Cap Technology
FZROX holds over 1,000 U.S. stocks with Information Technology representing 31.8% of its portfolio, led by Apple, Nvidia and Microsoft. Investors should be aware that this tech concentration can amplify drawdowns during sector-specific sell-offs.
4. Custodian Lock-In and Transfer Constraints
The fund is exclusively available through Fidelity accounts and lacks an ETF share class. Shares cannot be transferred in-kind to other custodians, requiring liquidation and potential taxable events for non-retirement accounts.