FXAIX Review 2026

By WealthIQ Editorial  |  Last Updated: March 2026

With an expense ratio of just 0.015%, FXAIX is one of the cheapest ways to own the S&P 500 — cheaper, in fact, than the index funds most advisors recommend by default. Whether that razor-thin cost advantage changes your long-term outcome is worth understanding.

What Is FXAIX?

The Fidelity 500 Index Fund (FXAIX) is a passively managed mutual fund that tracks the S&P 500 Index — the benchmark that represents 500 of the largest publicly traded U.S. companies by market capitalization. Launched in 1988, FXAIX is one of the oldest and most established index funds in the U.S. market, with over $500 billion in assets under management as of early 2026.

Related: FSKAX review.

FXAIX is a mutual fund, not an ETF. This distinction matters in a few ways:

• It can only be purchased at end-of-day NAV (net asset value), not intraday
• There are no bid-ask spreads — you get the exact NAV price
• It’s only available directly through Fidelity — you cannot buy FXAIX at Vanguard, Schwab, or another broker
• Fractional “shares” are inherently supported — any dollar amount can be invested

The fund uses a full replication strategy, meaning it holds all 500 companies in the S&P 500 in proportion to their market capitalization. Top holdings include Apple (AAPL), Microsoft (MSFT), NVIDIA (NVDA), Amazon (AMZN), and Alphabet (GOOGL) — collectively representing roughly 25–30% of the fund.

Expense Ratio: Effectively Zero

FXAIX charges an expense ratio of 0.015% — just $1.50 per year on a $10,000 investment. This is among the lowest of any fund in existence, including other S&P 500 index funds.

To put it in perspective: you would need over 40 years of compounding before fees meaningfully eroded your returns at this expense ratio. For all practical purposes, FXAIX costs nothing to hold.

This contrasts sharply with actively managed large-cap funds, which typically charge 0.5%–1.2% annually. On a $100,000 portfolio compounded over 30 years at 10% annual return, a 1% fee difference costs roughly $175,000 in foregone wealth. Cost matters enormously in long-term investing.

Performance vs. the S&P 500

As an index fund, FXAIX’s goal is to match — not beat — the S&P 500. It achieves this with remarkable accuracy. The tracking error (the gap between FXAIX’s return and the index) is typically less than 0.02% annually.

Approximate historical performance (total return including dividends):

• 1-year (2024): ~25.1%
• 3-year (2021–2024): ~10.0% annualized
• 5-year (2019–2024): ~15.6% annualized
• 10-year (2014–2024): ~13.0% annualized
• Since inception (1988–2024): ~10.8% annualized

These returns reflect what the market gave investors — before taxes on dividends and capital gains distributions. FXAIX is quite tax-efficient as a mutual fund, rarely distributing capital gains to shareholders.

FXAIX vs. our VOO ETF review vs. SPY vs. IVV

All four of these funds track the S&P 500. The differences are subtle but worth understanding:

*ETF share prices as of approximate early 2026 levels. Fractional shares available on platforms like Fidelity and Robinhood. All performance figures approximate.

Bottom line on comparisons: FXAIX has the lowest expense ratio of the four. If you’re a Fidelity customer, FXAIX is the obvious default. If you use another broker and want S&P 500 exposure, VOO or IVV are the next cheapest options. SPY is the most liquid but carries a higher expense ratio — it’s mostly used by institutional traders who need options markets, not long-term investors.

Minimum Investment and Accessibility

FXAIX has no minimum investment requirement — a change Fidelity made in 2018 when it slashed minimums across its index fund lineup. You can start with $1 and buy any dollar amount. This makes FXAIX accessible to new investors who cannot afford full ETF shares on other platforms.

The fund is available exclusively through Fidelity brokerage or retirement accounts (401k, IRA, Roth IRA). Many workplace 401k plans include FXAIX as a core investment option. If your plan offers it, it’s typically the lowest-cost way to get S&P 500 exposure within your retirement account.

Tax Efficiency

FXAIX is tax-efficient for several reasons:

• Low turnover: Because it tracks an index, the fund rarely buys or sells securities — only when the S&P 500 adds or removes a constituent
• Low capital gains distributions: Most years, FXAIX distributes little to no taxable capital gains to shareholders
• Qualified dividends: The dividends paid by FXAIX are primarily qualified, taxed at lower rates

That said, ETF structures (like VOO) can be slightly more tax-efficient due to the “in-kind” creation/redemption mechanism that shields ETF investors from capital gains taxes more effectively. For most retail investors in tax-advantaged accounts, this difference is academic.

Who Should Use FXAIX?

FXAIX is ideal for:

• Fidelity account holders who want the lowest possible cost for S&P 500 exposure
• Beginning investors who want a simple, diversified starting point
• 401k participants whose plan includes FXAIX
• Dollar-cost averaging (DCA) investors — the mutual fund structure allows precise dollar amounts to be invested automatically
• Passive investors who don’t need intraday trading flexibility

FXAIX may be suboptimal for:

• Non-Fidelity users (use VOO or IVV instead)
• Investors who want international diversification (pair with VXUS or an international fund)
• Traders who want intraday liquidity (use SPY or VOO ETFs)

Strengths and Weaknesses

Pros

• ✅ Lowest expense ratio of any major S&P 500 fund (0.015%)
• ✅ No minimum investment — accessible to all
• ✅ Excellent long-term track record with near-zero tracking error
• ✅ Automatic fractional investing — invest any dollar amount
• ✅ No capital gains distributions most years
• ✅ Widely available in Fidelity 401k plans

Cons

• ❌ Only available at Fidelity — not portable to other brokers
• ❌ No intraday trading (priced once per day at market close)
• ❌ U.S.-only exposure — no international diversification
• ❌ Heavy technology concentration (~30%) — risk if tech underperforms
• ❌ Slightly less tax-efficient than ETF equivalents in taxable accounts

How to Open a Fidelity Account and Buy FXAIX

1. Open a Fidelity brokerage or IRA account (free, no minimums)
2. Fund your account via bank transfer (usually 1–3 business days)
3. Search for “FXAIX” in the trade ticket
4. Enter the dollar amount you want to invest (any amount works)
5. Set up automatic monthly investments if desired for a DCA strategy

WealthIQ’s Verdict

FXAIX is one of the best investment vehicles available to U.S. retail investors. Period. Its combination of a 0.015% expense ratio, zero minimum investment, and consistent S&P 500 tracking makes it a near-perfect core holding for long-term investors using Fidelity.

The only meaningful limitation is platform lock-in — you can’t take FXAIX to another broker if you ever switch. For investors committed to Fidelity, this is a non-issue. For those who want flexibility, VOO or IVV ETFs provide similar performance with broader portability.

If you’re a Fidelity user and don’t yet hold FXAIX, there’s a very short list of reasons not to start immediately.