It can be tempting to bet the house on a star portfolio manager, and Fidelity’s mutual fund lineup has no shortage of famous, historically outperforming examples.
Investors still recall the legendary Peter Lynch era at the Fidelity Magellan Fund (ticker: FMAGX), or William Danoff’s decades-long run at Fidelity Contrafund (FCNTX).
But active funds are run by people who eventually age and retire, and that reality introduces what analysts call succession risk.
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While fund companies try to manage transitions carefully by appointing co-managers and grooming replacements in advance, the results can still vary widely, making future performance difficult to predict.
Still, while managers can certainly influence a fund’s results, Morningstar research suggests another factor may be even more predictive: fees.
Specifically, the expense ratio, which represents the annual percentage of assets deducted from a fund to cover operating costs. Lower expenses leave more of a fund’s returns in the hands of investors.
Morningstar highlighted this relationship as part of a 2021 revamp to its Medalist rating methodology. The firm examined a large sample of funds in the Australian market, grouping them by investment style and geographic focus to allow for apples-to-apples comparisons. The funds were then sorted into five fee tiers, or quintiles, based on their fees.
For each group, Morningstar calculated what it calls a “success ratio,” defined as the percentage of funds that both survived and outperformed their peer category over time.
The results were striking. Funds in the lowest-cost quintile consistently posted higher success ratios than those in the most expensive tier. In one example cited by the firm, global large-cap equity funds in the cheapest quintile achieved a success ratio of 60%, compared with just 23% for the most expensive group.
While the data came from the Australian fund market, there is little reason to believe the relationship between fees and outcomes would differ significantly in the U.S.
In fact, given the larger scale and longer history of the U.S. fund industry, the precedent may be even stronger. As a result, investors who take Morningstar’s findings seriously may want to prioritize low fees when selecting mutual funds, whether from Fidelity or other asset managers.
Here are seven of the best Fidelity mutual funds to buy and hold in 2026:
| Fund | Expense ratio |
| Fidelity 500 Index Fund (FXAIX) | 0.015% |
| Fidelity Total Market Index Fund (FSKAX) | 0.015% |
| Fidelity International Index Fund (FSPSX) | 0.035% |
| Fidelity Zero Large Cap Index Fund (FNILX) | 0.00% |
| Fidelity Zero Total Market Index Fund (FZROX) | 0.00% |
| Fidelity Zero Extended Market Index Fund (FZIPX) | 0.00% |
| Fidelity Zero International Index Fund (FZILX) | 0.00% |
Fidelity 500 Index Fund (FXAIX)
“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. FXAIX is one of Fidelity’s most popular index funds, with $749 billion in assets.
FXAIX passively tracks the S&P 500, a benchmark of blue chips selected based on guidelines for size, liquidity and earnings, with input from an index committee. The fund charges a very low 0.015% expense ratio, or $1.50 in annual fee drag for a $10,000 investment. FXAIX also has no minimum required investment, which makes it accessible for new investors starting out with limited capital.
Fidelity Total Market Index Fund (FSKAX)
The S&P 500 is one of the most widely cited benchmarks for U.S. equity performance, but it is not the most comprehensive. By focusing on 500 large-cap companies, the index excludes thousands of mid- and small-cap stocks that make up much of the broader U.S. economy. In addition, company inclusion in the index is determined by a committee, which introduces a degree of subjectivity.
Investors seeking a more complete “buy the haystack” approach may prefer FSKAX, which tracks the Dow Jones U.S. Total Stock Market Index at a 0.015% expense ratio. This Fidelity mutual fund holds more than 3,700 stocks spanning large-, mid- and small-cap companies. Because the portfolio is market capitalization-weighted, the same blue-chip stocks found in the S&P 500 still dominate the top holdings.
Fidelity International Index Fund (FSPSX)
FXAIX and FSKAX rank among the most popular U.S. equity index mutual funds thanks to their low fees and strong long-term performance. However, while American stocks have dominated over the past decade, that has not always been the case. Some investors may remember the “lost decade” from 1999 to 2009, when U.S. equities produced negative real returns after accounting for inflation.
To help hedge against the risk of another similar period, many investors allocate part of their portfolio to international stocks. That exposure can be obtained affordably through FSPSX. The fund tracks the MSCI EAFE Index (EAFE stands for Europe, Australasia and the Far East). FSPSX holds roughly 700 market cap-weighted companies and remains highly cost efficient, charging a 0.035% expense ratio.
Fidelity Zero Large Cap Index Fund (FNILX)
Consumer staples beverage companies such as Coca-Cola Co. (KO) and PepsiCo Inc. (PEP) have long faced competition from lower-priced generic cola brands. Fidelity has taken this concept further through its proprietary lineup of “Zero” index funds, which charge no expense ratio, no transaction fees and have no minimum investment requirements. The option most comparable to a S&P 500 index fund is FNILX.
FNILX tracks the Fidelity U.S. Large Cap Index. This benchmark holds the 500 largest publicly traded companies in the U.S. Unlike many index funds that replicate an external benchmark, FNILX tracks a proprietary Fidelity index, allowing the firm to control licensing costs. The fund also lends securities within its portfolio to short sellers, which further helps offset operational costs.
[Read: 5 Best S&P 500 Index Funds to Buy for 2026]
Fidelity Zero Total Market Index Fund (FZROX)
Many investors seeking U.S. equity exposure choose either an S&P 500 fund or a total U.S. stock market fund. Fidelity’s Zero lineup reflects this same philosophy. Investors who want broader exposure beyond what FNILX provides may consider FZROX, which tracks the Fidelity U.S. Total Investable Market Index. The portfolio currently includes roughly 2,500 companies spanning large-, mid- and small-cap stocks.
However, FZROX does not precisely replicate its benchmark exactly down to the final holding. Instead, FZROX uses a statistical sampling approach designed to closely mirror the benchmark’s risk and return characteristics while requiring fewer trades. This approach, alongside the use of securities lending helps offset transaction costs, which supports the fund’s rare zero-expense-ratio structure.
Fidelity Zero Extended Market Index Fund (FZIPX)
Both FNILX and FZROX use market-capitalization weighting, meaning larger companies receive a greater share of the portfolio. This methodology is highly efficient and allows investors to benefit as successful companies naturally grow to represent larger positions. However, late in market cycles it can introduce concentration risk, particularly in sectors that have recently performed well, such as technology.
Investors looking to diversify further into smaller companies can use FZIPX as a tactical allocation. The fund tracks the Fidelity U.S. Extended Investable Market Index, which includes 2,500 companies but excludes the largest 500. Because companies frequently grow into or fall out of this segment, the fund experiences a somewhat higher turnover rate of 13% as firms enter or leave the benchmark.
Fidelity Zero International Index Fund (FZILX)
International investing used to be expensive and cumbersome. Investors often had to convert currencies and purchase foreign-listed securities directly or rely on American depositary receipts (ADRs), which sometimes carried additional pass-through administrative fees. Today, the growth of low-cost index mutual funds has made global diversification far more accessible, especially in workplace 401(k) plans.
Rounding out Fidelity’s Zero lineup is FZILX, which tracks just over 2,100 international stocks represented by the Fidelity Global ex U.S. Index. Unlike funds that are limited to developed markets such as those in the EAFE benchmark, FZILX also includes emerging markets. As a result, the portfolio also holds companies from faster-growing regions like China, India, South Korea and Brazil.
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The 7 Best Fidelity Mutual Funds to Buy and Hold originally appeared on usnews.com
Update 03/18/26: This story was previously published at an earlier date and has been updated with new information.
