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VTSAX vs FSKAX: Which Total Market Fund Is Better?

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We Compare VTSAX vs FSKAX:

Vanguard Total Stock Market Index Fund (VTSAX) vs Fidelity Total Market Index Fund (FSKAX)

Investors may find it difficult when it comes to choosing between VTSAX vs FSKAX.  They are both great total market funds and popular among investors.

I’ll help break down their differences.

VTSAX vs FSKAX Graphic

 

VTSAX vs FSKAX

The primary difference between VTSAX and FSKAX is the brokerage that issues the fund.  VTSAX is a Vanguard fund while FZROX is a fund from Fidelity.

VTSAX 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, VTSAX, 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 U.S. stocks and has a very low expense ratio.

VTSAX

  • Fund Inception: 2000
  • Tracks the CRSP US Total Market Index
  • Expense Ratio: 0.04%
  • Vanguard Fund
  • Minimum Initial Investment: $3,000
  • Number Of Stocks: 3535
  • Equivalent ETF (VTI)

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 made a major push to compete with Vanguard by introducing funds with equally low or no expense ratios such as FZROX.

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

VTSAX expense ratio is 0.04%

FSKAX expense ratio is 0.015%

 

VTSAX vs FSKAX Performance

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

VTSAX vs FSKAX Performance Comparison

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

VTSAX vs FSKAX Performance Chart

As you can see VTSAX and FSKAX performance is identical.  Their performance chart overlaps over the last 10 years.

 

VTSAX vs FSKAX Expense Ratio

The difference in expense ratio between VTSAX and FSKAX is only 0.025%.  Vanguard’s VTSAX has an expense ratio of 0.04% 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 each year, over the 30 years.

You will have $12,000 less in your account because of the extra 0.025% expense ratio.

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

Winner: FSKAX with the lowest expense ratio of 0.015%

 

VTSAX vs FSKAX Dividend

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

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

FSKAX Dividend Distributions: April and December

Both VTSAX and FSKAX have a similar dividend yield.  VTSAX 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: VTSAX with a higher dividend yield and quarterly dividend distributions

 

VTSAX Minimum Investment

For a first-time investment in VTSAX, you need to have a minimum of $3,000.  After that, you are at liberty to invest any amount you want.

As a first-time investor in FSKAX, you only need to have the price of one share as a minimum investment.  This means that if FSKAX’s share price is $50, you can invest in the fund with as little as $50.

So if you are starting small or already have a Fidelity account, your best choice might be FSKAX.

As an alternative, you could invest with no minimum requirement into VTSAX’s ETF equivalent, which is VTI, through the Vanguard platform or M1 Finance. (Use this link for a $50 Bonus)

 

VTSAX Profile

  • Fund Inception: 2000
  • Tracks the CRSP US Total Market Index
  • Expense Ratio: 0.04%
  • Vanguard Fund
  • Minimum Initial Investment: $3,000
  • Number Of Stocks: 3535
  • Equivalent ETF (VTI)
  • 10-Year Performance 16.13%
  • Aims For Total Market Exposure

Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) represents close to 100% of the U.S. equity market that is publicly traded.  It also tracks the CRSP U.S. Total Market Index.

Vanguard’s VTSAX has an expense ratio of 0.04%.

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

However, this does not in any way affect the companies represented in the fund.  These stocks have a significant international presence.

 

VTSAX Performance

Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) is popular for so many reasons of which consistent returns are a major part.

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

VTSAX Performance Chart

 

VTSAX Holdings

Vanguard’s VTSAX is largely made up of Apple, Microsoft, Google, Amazon, and Tesla but also provides exposure to over 3500 stocks.

Here are the top 10 holdings for VTSAX:

VTSAX Top 10 Holdings

Major sectors in the index include:

  • Healthcare
  • Technology
  • 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: 3875
  • 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 VTSAX, FSKAX offers investors an extremely low expense ratio of 0.015%.

FSKAX return is nearly the same as VTSAX 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 3500 stocks.

 

Which Is Better VTSAX vs FSKAX?

VTSAX and FSKAX are both very good investments depending on your investment goals.  They are also both low-cost funds with a history of strong returns.

The answer of 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:

VTSAX Advantages:

  • Has An Equivalent ETF (VTI)
  • 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

Having said that, I believe both VTSAX and FSKAX can be great investment options and get you to Financial Independence Retire Early (FIRE).

They both have rock bottom expense ratios (0.04% 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 VTSAX are almost identical.  As a result of mirroring the entire U.S stock market, they hold almost the same assets and therefore have identical exposure.

Their returns are also very similar.

However, their major differences show in 3 areas:

  • Brokerage
  • Minimum Investment
  • 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.

As far as Fidelity, they have a responsibility to their shareholders to continue to increase 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.  They could increase that fee at any time and it 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.

Minimum Investment

You need $3000 as a minimum investment to invest in VTSAX, that’s against the price of a share which is the requirement to start investing in FSKAX.  For beginning investors, this may mean a lot.

Net Assets

VTSAX 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 VTSAX 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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