FXAIX is a mutual fund, specifically an index fund run by Fidelity

FXAIX is a mutual fund offered by Fidelity Investments that tracks the S&P 500 index. It holds shares in roughly 500 large U.S. companies and moves in line with how those companies perform as a group. Because it is an index fund, it does not try to beat the market — it tries to match it by holding the same stocks in the same proportions as the S&P 500 itself.

The fund is open to individual investors through Fidelity brokerage accounts. You can buy shares of FXAIX the same way you would buy shares of any other mutual fund: through a Fidelity account online, by phone, or through an advisor. The fund has no sales load, meaning Fidelity does not charge you a commission when you buy or sell.

FXAIX stands for Fidelity S&P 500 Index Fund. The "A" in the name indicates it is the standard share class for individual investors. Fidelity offers other share classes of the same fund (like FUSEX or FXAOX) with different fee structures, but FXAIX is the most common version for people opening their own accounts.

Key Takeaways

  • FXAIX is an index mutual fund that holds the 500 stocks in the S&P 500 and charges a yearly expense ratio of 0.015 percent, which is very low.
  • You can buy FXAIX only through a Fidelity brokerage account; it is not available through other brokers or investment platforms.
  • The fund has no minimum investment amount and no sales commission, so you can start with any dollar amount you choose.
  • Because it is an index fund, FXAIX does not try to outperform the market — it aims to match the S&P 500's return minus its small annual fee.

How FXAIX differs from actively managed mutual funds

Most mutual funds employ a manager or team of managers who pick individual stocks they believe will outperform the market. Those funds charge higher fees — often 0.5 to 1 percent or more per year — to pay for that research and management. FXAIX does not work that way. It simply holds all 500 stocks in the S&P 500 in the same weights, so there is no manager making stock-picking decisions.

This passive approach keeps costs down. FXAIX's expense ratio is 0.015 percent, meaning you pay $1.50 per year for every $10,000 you invest. An actively managed fund charging 0.75 percent would cost you $75 per year on the same $10,000. Over decades, that difference in fees compounds and can significantly affect your total return.

The trade-off is that FXAIX will never beat the S&P 500 — it will only match it (minus the tiny fee). An actively managed fund might outperform in a given year, but research shows most do not beat index funds over long periods once fees are factored in.

What you own when you buy FXAIX shares

When you purchase shares of FXAIX, you own a fractional stake in a pool of money that holds all 500 S&P 500 stocks. You do not own the stocks directly; you own a share of the mutual fund, which owns the stocks. The fund's value rises and falls with the S&P 500 index.

The fund holds major companies across many industries: technology (Apple, Microsoft, Nvidia), finance (JPMorgan Chase, Bank of America), healthcare (Johnson & Johnson, UnitedHealth), consumer goods (Procter & Gamble, Coca-Cola), and many others. The exact holdings change slightly as companies are added to or removed from the S&P 500, but the fund automatically adjusts to stay aligned with the index.

You receive no dividends directly from FXAIX itself. However, the companies in the fund pay dividends, and those dividends are reinvested back into the fund automatically unless you choose otherwise. This reinvestment compounds your returns over time.

Costs and fees associated with FXAIX

FXAIX has an expense ratio of 0.015 percent annually. This is deducted from the fund's assets automatically, so you do not see a separate bill. On a $10,000 investment, you pay about $1.50 per year. On $100,000, you pay about $15 per year.

There is no sales load (commission) when you buy or sell FXAIX shares through Fidelity. Some brokers charge trading fees for mutual fund transactions, but Fidelity does not charge a fee to buy or sell FXAIX. If you hold the fund in a Fidelity retirement account like a 401(k) or IRA, there are no additional fund-specific costs beyond the expense ratio.

If you hold FXAIX in a taxable brokerage account, you will owe capital gains taxes when the fund distributes gains or when you sell shares at a profit. Index funds like FXAIX tend to be tax-efficient because they trade less frequently than actively managed funds, which means fewer taxable events.

Who can invest in FXAIX and how to get your free guide

Anyone with a Fidelity brokerage account can invest in FXAIX. You do not need a minimum balance to open an account, and you can buy as little as one share (or a fractional share). You can open a Fidelity account online in about 10 minutes with your Social Security number, address, and bank information.

FXAIX is available in most types of Fidelity accounts: individual taxable brokerage accounts, IRAs (Traditional, Roth, or SEP), 401(k)s, and custodial accounts for minors. It is not available through other brokers like Charles Schwab, Vanguard, or E-Trade, though those platforms offer their own S&P 500 index funds with similar structures and fees.

Once your account is open and funded, you can buy FXAIX by searching for it by ticker symbol in Fidelity's platform and placing an order. The order executes at the fund's net asset value (NAV) calculated at the end of the trading day. You can set up automatic monthly investments if you want to invest a fixed amount regularly.

FXAIX versus other S&P 500 index funds

Fidelity is not the only company offering an S&P 500 index fund. Vanguard offers VFIAX (Vanguard S&P 500 ETF Index Fund) with an expense ratio of 0.03 percent. Schwab offers SWTSX (Schwab U.S. Large-Cap ETF) with an expense ratio of 0.03 percent. The differences in fees are small — fractions of a percent — but they matter over decades.

FXAIX's 0.015 percent expense ratio is among the lowest available. The main reason to choose FXAIX over a competitor's S&P 500 fund is if you already have a Fidelity account or prefer Fidelity's platform. If you use Vanguard or Schwab, their versions are equally good and slightly cheaper. The difference between a 0.015 percent fee and a 0.03 percent fee is negligible for most investors.

All three funds track the same index and hold nearly identical stocks, so your long-term returns will be very similar regardless of which one you choose. The decision often comes down to which brokerage you already use or prefer.

Frequently Asked Questions

Can I lose money investing in FXAIX?

Yes. FXAIX's value moves with the S&P 500, so if the stock market declines, the fund's value declines too. During major market downturns, the S&P 500 has fallen 20, 30, or even 50 percent. However, historically the market has recovered from every downturn and reached new highs over long periods (10+ years).

Does FXAIX pay dividends?

The companies in FXAIX pay dividends, and those dividends are automatically reinvested into the fund. You do not receive cash dividends unless you change your settings. Reinvestment compounds your returns over time.

What is the difference between FXAIX and FSKAX?

FSKAX is Fidelity's total stock market index fund, which holds roughly 3,500 U.S. stocks (large, mid, and small companies). FXAIX holds only the 500 largest companies. FSKAX is more diversified but has a slightly higher expense ratio of 0.035 percent. Both are low-cost index funds; the choice depends on whether you want exposure to smaller companies.

Can I buy FXAIX through my employer's 401(k)?

Only if your employer's 401(k) plan uses Fidelity as the provider. Many employers do use Fidelity, in which case FXAIX may be one of the fund options available. Check your plan's fund list or ask your HR department. If your plan uses a different provider, you will not see FXAIX as an option.