Fidelity's Zero-Fee ETF Is Quietly Keeping Pace With the S&P 500 And Costs Absolutely Nothing

"FZROX is a broad U.S. equity fund designed to own essentially the entire American stock market, from mega-cap technology giants down through small and micro-cap companies. It tracks Fidelity's proprietary U.S. Total Investable Market Index, a benchmark Fidelity created specifically to avoid licensing fees from index providers like CRSP or S&P Dow Jones. That is how the zero expense ratio becomes possible."

"One structural constraint matters: FZROX is available exclusively through Fidelity accounts and has no ETF share class. You cannot hold it at Schwab, Vanguard, or in a brokerage IRA elsewhere. For investors already inside the Fidelity ecosystem, this is a non-issue. For anyone considering switching custodians, FZROX shares cannot transfer in-kind and would need to be liquidated first, a potential taxable event in non-retirement accounts."

"Over the past year, FZROX returned 18.48%, compared to 17.69% for SPY and 17.67% for VTI. Over five years, FZROX returned 81.75%, modestly ahead of VTI's 65.3% and SPY's 75.69%. The five-year comparison uses different start dates, so the gap should be read directionally. What the data confirms is that FZROX has performed competitively."

FZROX is Fidelity's Zero Total Market Index Fund, launched in August 2018 with a 0.00% expense ratio. It provides broad U.S. equity exposure by tracking Fidelity's proprietary Total Investable Market Index, avoiding licensing fees from external index providers. The fund owns the entire American stock market spectrum from mega-cap to micro-cap companies with no leverage, options overlay, or income-enhancement strategies. Technology represents 31.8% of holdings, led by Apple, Nvidia, and Microsoft. The fund offers a 1.08% dividend yield. A key limitation is exclusivity to Fidelity accounts with no ETF option or transfer capability to other custodians. Performance data shows FZROX returning 18.48% over one year and 81.75% over five years, competitive with comparable funds like VTI and SPY.

Read at 24/7 Wall St.