If you’re investing for the long haul, fund selection matters, and not just because some might outperform. Instead of identifying the stars in advance, it’s more important to avoid the ones that are almost guaranteed to underperform over time.
Consider a clear historical example: the Fidelity 500 Index Fund (ticker: FXAIX) versus the Guggenheim S&P 500 A Class (RYSOX) over the 14-year period from May 2011 to May 2025.
Both funds track the exact same benchmark, the S&P 500, yet their returns diverged meaningfully. FXAIX delivered an annualized return of 12.8% during this period, while RYSOX lagged at 10.9%.
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That difference might sound small, but compounding over more than a decade adds up. A $10,000 investment in FXAIX would have grown to $53,669, while RYSOX would only have reached $42,753. The gap widens even more if you invested a larger sum or extended the time frame.
What caused the gap? Fees. FXAIX charges a rock-bottom expense ratio of 0.015%, while RYSOX costs 1.62%, more than 100 times higher. Since both funds track the same index, there’s no logical reason to pay that premium.
Fortunately, most of Fidelity’s mutual funds are closer in structure to FXAIX: low-cost passive index trackers with no minimum investment requirements, no sales loads and no transaction fees.
Here are seven of the best Fidelity mutual funds to buy and hold:
| Fund | Expense ratio | Forward dividend yield* |
| Fidelity 500 Index Fund (FXAIX) | 0.015% | 1.3% |
| Fidelity Total Market Index Fund (FSKAX) | 0.015% | 1.1% |
| Fidelity Zero Total Market Index Fund (FZROX) | 0% | 1.2% |
| Fidelity Zero International Index Fund (FZILX) | 0% | 2.7% |
| Fidelity Large Cap Growth Index Fund (FSPGX) | 0.035% | 0.4% |
| Fidelity Large Cap Value Index Fund (FLCOX) | 0.035% | 1.6% |
| Fidelity Real Estate Index Fund (FSRNX) | 0.07% | 2.8% |
*As of May 3 close.
Fidelity 500 Index Fund (FXAIX)
“Savvy investors understand the importance of keeping your costs low and your options open, and Fidelity funds have become popular because they offer just that,” says Andrew Latham, a certified financial planner and director of content at SuperMoney.com. “With no sales loads, low fees and no minimum investment requirements, it’s easier to start investing without breaking the bank.”
It’s hard to beat FXAIX’s value proposition. With a rock-bottom 0.015% expense ratio and disciplined portfolio management, the fund has almost perfectly tracked the S&P 500 over the past decade, delivering a 12.3% annualized return. That puts FXAIX at the very top of the large-cap blend category for risk-adjusted performance, earning it a rare five-star rating from Morningstar.
Fidelity Total Market Index Fund (FSKAX)
“While it truly depends on each individual investor’s specific goals and objectives, I typically advocate for index funds in the accumulation phase, as these give great broad-market exposure with lower fees than actively managed funds,” says Wes Moss, managing partner and chief investment strategist at Capital Investment Advisors. Another great index fund in Fidelity’s lineup is FSKAX, which also charges 0.015%.
FSKAX provides exposure to the entire U.S. stock market, not just the large caps represented by the S&P 500. It tracks the Dow Jones U.S. Total Stock Market Index and holds over 3,800 stocks, including small- and mid-cap companies. However, its top holdings still look similar to FXAIX because both funds are market-cap weighted, meaning the largest companies make up the biggest portions of the portfolio.
Fidelity Zero Total Market Index Fund (FZROX)
“Fidelity introduced zero-expense-ratio index mutual funds and also offered zero-minimum-investment mutual funds, no minimums to open an account and no account fees for retail brokerage accounts,” Moss says. That means even the most cost-conscious investors can build a diversified portfolio without paying a cent in fees. To put this into action, look for funds like FZROX from Fidelity’s “Zero” lineup.
This fund tracks the proprietary Fidelity U.S. Total Investable Market Index, helping avoid benchmark licensing fees that typically add to fund costs. It also uses sampling instead of full replication to further cut expenses and can lend out its securities to generate extra revenue that offsets operating costs. The overall portfolio consists of around 2,500 market-cap-weighted stocks similar to FSKAX.
Fidelity Zero International Index Fund (FZILX)
“International investing can be a great diversifier for investors who are too heavily concentrated in U.S. stocks,” says Henry Yoshida, senior vice president of Retired.com. “With FZILX, you can invest internationally at zero cost — this is a win-win for any serious long-term investor.” Combining FZILX with FZROX gives investors global market-cap weighted equity exposure at virtually zero cost.
FZILX tracks the Fidelity Global ex U.S. Index and uses the same three-part approach seen across the Zero lineup: a proprietary benchmark to avoid licensing fees, index sampling to minimize trading costs and securities lending to offset fund expenses. The portfolio holds more than 2,200 stocks across both developed and emerging markets and has returned 10.6% annualized over the past five years.
[Read: 7 Best International Stocks to Buy Now]
Fidelity Large Cap Growth Index Fund (FSPGX)
Fidelity also offers more concentrated funds for investors looking to make a style-specific bet, such as on growth outperforming the broader market. For that role, FSPGX is a low-cost option that tracks the Russell 1000 Growth Index with a 0.035% expense ratio. This index recently implemented a capping methodology to reduce single-stock and sector-specific concentration.
Still, FSPGX leans heavily into technology, with a 46% sector weighting and all of the Magnificent Seven stocks prominently represented. Its top 10 holdings make up 56% of total assets. This concentration has historically paid off, with FSPGX delivering a strong 17.2% annualized return over the past five years. Just note that FSPGX tends to be more volatile than broader benchmarks like the S&P 500.
Fidelity Large Cap Value Index Fund (FLCOX)
Rather than betting on continued momentum in growth stocks, contrarian investors may prefer a “buy low” approach with a value-oriented fund like FLCOX. This fund tracks the Russell 1000 Value Index, the polar opposite of the Russell 1000 Growth Index. It carries the same low 0.035% expense ratio but with a very different portfolio in terms of sector composition and company representation.
Instead of a tech-heavy allocation, FLCOX spreads its exposure more evenly across financials, health care and industrials. The fund is also much less top-heavy, with the 10 largest holdings making up just 18.1% of its total weight. It has underperformed over the past five years, with a 13% annualized return, but it could be well positioned to outperform if market sentiment rotates back toward value stocks.
Fidelity Real Estate Index Fund (FSRNX)
FSRNX offers one of the few ways U.S. investors can gain liquid, potentially tax-sheltered exposure to real estate. As a mutual fund, it can be held in a Roth IRA or 401(k) plan if available — something that’s not usually possible with direct property ownership. It’s also far more diversified than the average rental property given its broad scope, which reduces the idiosyncratic risk inherent to real estate investing.
The fund tracks the MSCI U.S. IMI Real Estate 25/25 Index and holds 160 real estate investment trusts and real estate operating companies. Its portfolio spans multiple subsectors, including office buildings, retail spaces, leisure and hospitality, health care, apartments, warehouses, self-storage depots, data centers and telecom towers. All of this comes at a low 0.07% expense ratio.
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The 7 Best Fidelity Mutual Funds to Buy and Hold originally appeared on usnews.com
Update 05/05/25: This story was previously published at an earlier date and has been updated with new information.
