The Fidelity 500 index fund gained roughly 0.65% on August 13, 2026, tracking the S&P 500’s move to a fresh record close, while its razor-thin 0.015% expense ratio continues to pull further ahead of rival S&P 500 products on cost. The fund, traded under the ticker FXAIX, remains one of the cheapest ways for everyday investors to own the entire S&P 500 index inside a single account.
Thursday’s rally pushed the S&P 500 above 7,800 points for the first time in its history, closing at 7,798.99, up 0.65% on the day. Since FXAIX is built to mirror the S&P 500 almost exactly, the fund’s net asset value moved in lockstep with the benchmark, giving long-term holders another strong session in a summer that has been unusually kind to large-cap U.S. stocks.
What Happened With FXAIX This Week
The broader rally came after softer-than-expected inflation data eased concerns about the Federal Reserve raising interest rates again this year. Cooling price pressures, combined with falling oil prices, gave investors more confidence to buy into large-cap technology and growth names, the same companies that make up the biggest weightings inside FXAIX.
Because FXAIX holds essentially the same 500 companies as the S&P 500 index, in the same proportions, its daily performance almost never strays from the benchmark. Thursday’s session was no exception. The fund’s biggest holdings, including Nvidia, Apple, and Microsoft, all played a role in pushing the broader market higher.
Net assets in the fund stood at roughly $833 billion as of mid-August 2026, making FXAIX one of the largest mutual funds in the world. Its trailing 12-month yield sits close to 1.06%, and Morningstar currently rates the fund four stars within the large-cap blend category.
Why the 0.015% Fee Keeps Widening the Cost Gap With SPY
The headline number driving renewed attention to FXAIX is not its short-term price move but its expense ratio. Fidelity charges just 0.015% annually to manage the fund, which works out to $1.50 a year for every $10,000 invested.
Compare that to SPY, the SPDR S&P 500 ETF Trust, which charges an expense ratio of roughly 0.0945%, or about $9.45 a year on the same $10,000 investment. That gap may look small in isolation, but it compounds meaningfully over decades of investing.
Here is how the two funds stack up on cost:
| Fund | Ticker | Expense Ratio | Annual Cost per $10,000 |
|---|---|---|---|
| Fidelity 500 Index Fund | FXAIX | 0.015% | $1.50 |
| SPDR S&P 500 ETF Trust | SPY | 0.0945% | $9.45 |
On paper, SPY costs roughly six times more than FXAIX to hold every year. Over a 20 or 30-year investing horizon, that difference can add up to thousands of dollars in fees that never get the chance to compound inside an investor’s portfolio.
FXAIX also compares favorably against other popular S&P 500 vehicles. Vanguard’s VOO and BlackRock’s IVV both charge 0.03% annually, meaning FXAIX still undercuts them by half. Fidelity’s own zero-fee alternative, FNILX, charges nothing at all, but it tracks a different, Fidelity-proprietary index rather than the S&P 500 directly, which is why many investors still prefer FXAIX for its direct index-tracking mandate.
FXAIX vs SPY: Structure Still Matters
While the Fidelity 500 index fund holds a clear cost advantage over SPY, the two products are structured differently, and that distinction matters for certain investors.
FXAIX is a mutual fund, which means it can only be bought or sold once per day, after markets close, at its calculated net asset value. SPY, by contrast, is an exchange-traded fund that trades throughout the day like a stock, giving active traders and options investors the ability to move in and out of positions instantly.
That structural difference also affects tax treatment. SPY’s ETF wrapper allows in-kind redemptions, which typically reduce taxable capital gains distributions passed on to shareholders. FXAIX, as a mutual fund, occasionally distributes capital gains that can create a tax bill for investors holding the fund in a taxable brokerage account, even if they never sold a single share.
For investors using tax-advantaged accounts such as a 401(k), Roth IRA, or traditional IRA, this distinction rarely matters, since those accounts are not subject to annual capital gains taxes. In that setting, FXAIX’s lower expense ratio becomes the deciding factor for many long-term savers.
Performance Has Stayed Nearly Identical
Despite the difference in fees and structure, FXAIX and SPY have delivered nearly identical returns over time, since both are designed to track the same underlying index. Over the trailing ten years, FXAIX has returned an annualized figure only marginally ahead of SPY, a gap that traces almost entirely back to the lower expense ratio rather than any difference in stock selection.
Key similarities between the two funds:
- Both track the S&P 500 index and hold the same roughly 500 large-cap U.S. companies
- Both distribute dividends on a quarterly basis
- Both carry a beta close to 1.0, reflecting nearly identical volatility to the broader market
- Both have delivered year-to-date returns within a percentage point of each other in 2026
The main divergence between the two funds over any given year typically comes down to the compounding effect of fees, along with minor timing differences in how each fund processes dividend reinvestment and index rebalancing.
What This Means for Investors Considering FXAIX
For investors who already use Fidelity as their primary brokerage, FXAIX remains one of the simplest and cheapest ways to gain full exposure to the S&P 500. There is no minimum investment requirement, no transaction fee when trading inside a Fidelity account, and the expense ratio undercuts almost every other S&P 500 fund on the market.
Investors who prioritize intraday liquidity, options trading, or tax efficiency in a taxable account may still lean toward SPY or a similarly structured ETF like VOO. But for buy-and-hold investors building a retirement portfolio inside a 401(k) or IRA, the Fidelity 500 index fund’s minimal fee structure continues to make a measurable difference over the long run.
Financial advisors generally note that fee differences of a few basis points rarely move the needle in any single year, but across a multi-decade investing career, lower costs consistently correlate with stronger net returns. That is the core argument fueling renewed attention on FXAIX this week, even as the fund simply does what it has always done: track the S&P 500 as closely and as cheaply as possible.
The fund’s four-star Morningstar rating, its enormous asset base, and its rock-bottom fee structure all point to the same conclusion that has made FXAIX a staple in millions of retirement accounts: consistency and low cost tend to win over time.
What’s your take on FXAIX versus SPY for a long-term retirement portfolio? Share your thoughts in the comments below.