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VTI vs FSKAX: Which Total Market Fund Is Better?

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We Compare VTI vs FSKAX:

Vanguard Total Stock Market ETF (VTI) vs Fidelity Total Market Index Fund (FSKAX)

Investors may find it difficult to choose between VTI vs FSKAX. However, they are both great total market funds and popular among investors.

I’ll help break down their differences.

VTI vs FSKAX Comparison Graphic

 

VTI vs FSKAX

The most significant difference between VTI and FSKAX is the index they track. FSKAX tracks the Dow Jones, and VTI tracks the CRSP Index.

Another difference between VTI and FSKAX is the brokerage that issues the fund. VTI is a Vanguard fund, while FZROX is a fund from Fidelity.

VTI is a Vanguard fund

FSKAX is a Fidelity fund

Both funds provide investors a way to invest in the total U.S. stock market.

Vanguard Total Stock Market Index Fund, VTI, has over $1 trillion in total net assets and has become a favorite of the FIRE community.

Fidelity Total Market Index Fund, FSKAX, seeks to provide investment results equal to the total return of broad range of U.S. stocks and has a very low expense ratio.

VTI

  • Fund Inception: 2000
  • Tracks the CRSP U.S. Total Market Index
  • Expense Ratio: 0.03%
  • Vanguard ETF
  • No Minimum Investment
  • Number Of Stocks: 3535
  • Equivalent Admiral Fund (VTSAX)

FSKAX

  • Fund Inception: 1997
  • Tracks 80% of the Dow Jones US Total Stock Market Index
  • Expense Ratio: 0.015%
  • Fidelity Fund
  • Number Of Stocks: 3875
  • Similar Funds (FXAIX)

Fidelity recently pushed to compete with Vanguard by introducing funds with equally low or no expense ratios, such as FZROX.

VTI and FSKAX have very low expense ratios; however, FSKAX’s expense ratio is lower than VTI’s.

VTI expense ratio is 0.03%

FSKAX expense ratio is 0.015%

 

VTI vs FSKAX Performance

VTI and FSKAX have had almost identical performance returns over the last 10 years. This makes sense since they are both tracking the total U.S. stock market.

VTI vs FSKAX Performance

Here is how $10,000 would have grown in each fund over the last 5 years:

VTI vs FSKAX Performance Chart

As you can see, VTI and FSKAX performance is identical. This is because their performance chart overlaps over the last 5 years.

 

VTI vs FSKAX Expense Ratio

The difference in expense ratio between VTI and FSKAX is only 0.015%. Vanguard’s VTI has an expense ratio of 0.03%, while Fidelity’s FSKAX has an expense ratio of 0.015%.

Example:

Assuming you start with an initial investment of $100,000 and contribute $10,000 yearly over the 30 years.

Your account will have $8,000 less because of the extra 0.015% expense ratio.

This difference isn’t much, and it could be considered insignificant for a long-term investor.

Winner: FSKAX with the lowest expense ratio of 0.015%

 

VTI vs FSKAX Dividend

The main difference between VTI and FSKAX dividend is when it is distributed. VTI has quarterly dividend distributions, while FSKAX has biannual distributions.

VTI Dividend Distributions: March, June, September, and December

FSKAX Dividend Distributions: April and December

Both VTI and FSKAX have a similar dividend yield. However, VTI’s dividend yield is 1.21%, while FSKAX has a dividend yield of 1.18%.

Again, this difference could be considered insignificant for long-term investors.

Winner: VTI with a higher dividend yield and quarterly dividend distributions

 

No Minimum Investment

VTI is an exchange-traded fund (ETF), so there is no minimum investment. Investors looking to buy fractional shares can use platforms like M1 Finance.

Usually, fractional shares are not available for ETFs, but with M1 Finance, you can purchase fractional shares with no commission.

Buying fractional shares allows you to maximize your investment. This is great for shares of VTI due to its high price per share.

There are two easy ways to invest in VTI commission-free.

  1. Vanguard
  2. M1 Finance (Use this link for $50 when you open a new account)

Both of these options are free. This is important because fees can lower our returns.

I like M1 Finance as the best option because it gives you the flexibility to purchase VTI and thousands of other stocks.

I also use Personal Capital to track my investment fees. They have a free Retirement Fee Analyzer that tells you the future impact of fees on your portfolio.

Personal Capital Retirement Fee Analyzer

Personal Capital’s free tools allow you to quickly find which of your investments has high fees so you can switch them to low-cost options. (Get a $20 Amazon Gift Card with this link when you add at least one investment account containing a balance of more than $1,000 within 30 days)

 

VTI Description

  • Fund Inception: 2000
  • Tracks the CRSP US Total Market Index
  • Expense Ratio: 0.03%
  • Vanguard ETF
  • No Minimum Investment
  • Number Of Stocks: 3535
  • Admiral Shares (VTSAX)

Vanguard Total Stock Market ETF (VTI) represents nearly 100% of the U.S. equity market. It also tracks the CRSP U.S. Total Market Index.

Vanguard’s VTI has an expense ratio of 0.03%.

This implies that the fund has limited exposure to several international stocks.

Yet, this does not affect the companies represented in the fund. Moreover, these stocks have a significant international presence.

 

VTI Performance

Vanguard Total Stock Market ETF (VTI) is famous for many reasons, of which consistent returns are a significant part.

VTI Performance Chart

Its risk level is similar to that of the S&P 500.

VTI vs S&P 500 Performance Chart

 

VTI Holdings

Vanguard’s VTI is primarily made up of Apple, Microsoft, Google, Amazon, and Tesla and provides exposure to over 3500 stocks.

Here are the top 10 holdings for VTI:

VTI Top Holdings

Major sectors in the index include:

  • Technology
  • Healthcare
  • Consumer Services
  • Financials
  • Industrials

The top 10 holdings make up 25% of its total net assets.

 

FSKAX Profile

  • Fund Inception: 1997
  • Expense Ratio: 0.015%
  • Number Of Stocks: 3,875
  • No Minimum Investment
  • Fidelity Fund
  • Similar Funds (FZROX)

Fidelity Total Market Index Fund (FSKAX) is a Fidelity broad market fund that mirrors the Dow Jones U.S. Total Stock market and holds over 3,000 stocks. It is a consistent fund for the multi-cap category and offers greater diversity than the typical large-cap fund.

Like VTI, FSKAX offers investors an extremely low expense ratio of 0.015%.

FSKAX return is nearly the same as VTI over the last 10 years. The broad diversity of its holdings helps with its steady returns.

In addition, the fund outperforms its index and the large-blend classification on a three- and five-year basis.

 

FSKAX Performance

FSKAX Performance

 

FSKAX Holdings

FSKAX Top 10 Holdings

Fidelity’s FSKAX is largely made up of Apple, Microsoft, Google, Amazon, and Tesla but also provides exposure to over 3,500 stocks.

 

Which Is Better VTI vs FSKAX?

VTI and FSKAX are both excellent investments depending on your investment goals. They are also both low-cost funds with a history of solid returns.

The answer to which is better depends on your goals and the brokerage you prefer to use.

To make it easier to decide, I’ll lay out the advantages of both of them:

VTI Advantages:

  • Has An Equivalent Admiral Fund (VTSAX)
  • Vanguard Brokerage (Investor Owned)
  • Quarterly Dividend Distributions
  • Higher Dividend Yield

FSKAX Advantages:

  • Lower Expense Ratio
  • Increased Diversification (More Holdings)
  • No Minimum Investment
  • Great For Fidelity Account Holders

I believe both VTI and FSKAX can be great investment options and get you to Financial Independence Retire Early (FIRE).

They both have rock-bottom expense ratios (0.03% vs 0.015%).  So, either option is a great investment for financial independence.

After keeping fees to a minimum, you can work on increasing your savings rate and prioritizing your investments.

Then, you will be well on your way to Financial Independence and Early Retirement!

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My Winner: Both

FSKAX and VTI are almost identical. As a result of mirroring the entire U.S. stock market, they hold virtually the same assets and therefore have similar exposure.

Their returns are also very similar.

However, their major differences show in 3 areas:

  • Brokerage
  • ETF vs Index Fund
  • Net Assets

Brokerage

Vanguard has always been the first to offer very low-cost options for investing; it was one of John Bogle’s pioneering achievements.

Regarding Fidelity, they have a responsibility to their shareholders to continue increasing their profits.

This means they could be using FSKAX as an industry “Loss Leader” in hopes that they can make a profit with other products.

Also, there is no guarantee they will continue to offer the FSKAX fund at such a low expense ratio. So they could increase that fee any time, which wouldn’t be surprising.

On the other hand, Vanguard has a long history of lowering fees for its investors.

That being said, it’s important to choose the fund that best fits your investment goals.

 

ETF vs Index Fund

The most significant difference between an index fund and an ETF is how they are traded.

Investors can only buy and sell index funds once a day. This is usually at the end of the day, during market close.

ETFs trade like regular stocks. You can buy or sell ETFs anytime you want.

As a result, ETFs trade throughout the day.

Since FSKAX is an index fund, you can price each share only at the end of the day.

VTI is an ETF; you can trade the fund anytime during market hours. The price fluctuations happen throughout the day.

FSKAX trades once a day

VTI trades throughout the day

With VTI, you can monitor the price changes throughout the day. However, this isn’t an advantage as it can cause you to fall into trading instead of long-term investing.

 

Net Assets

VTI does provide higher liquidity with over $1 trillion in total net assets compared to $73 billion with FSKAX.

Factors like volatility and expense ratio are usually key metrics, but in this case, the difference between VTI vs FSKAX is insignificant.

The expense ratio difference is likely negligible over the long term.

If you are having trouble meeting the minimum requirement for VTSAX, you can always invest in VTI using the free M1 Finance App.

 


Disclaimer
This post may have affiliate links, which means I may receive commissions if you choose to purchase through links I provide (at no extra cost to you). Thank you for supporting the work I put into this site!

This information is my opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.
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