FXAIX vs VOO: Which S&P 500 Fund Should a Developer Buy?

FXAIX vs VOO at a glance

Both funds hold the same large US companies in nearly the same proportions, so their returns land very close together. One 2026 comparison puts six-year returns at 150.03% for VOO against 149.67% for FXAIX, as reported by 24/7 Wall St. (that piece includes sponsored content, so treat its framing with some caution). The differences that matter in a VOO vs FXAIX decision are structural.

Expense ratios shift over time, so confirm both on the funds' own pages before deciding. Fidelity lists FXAIX on its fund page, and Vanguard lists VOO on its ETF page.

Cost: a gap too small to decide on

FXAIX is cheaper, but 0.015% versus 0.03% is about $1.50 a year difference on a $10,000 balance. At $100,000 that's $15 a year. It's real and it compounds, but it rarely outweighs the other factors below, and it could flip if either fund changes its fee.

Why is FXAIX cheaper than VOO?

Both fees sit near the floor for any fund. Fidelity is competing with Vanguard for brokerage accounts, and a very low fee on a flagship index fund is a common way to bring investors onto a platform. Nothing in the fee gap points to a difference in what the funds hold.

Auto-investing: where FXAIX is strongest

A developer paid on a fixed schedule often wants a fixed amount going into the market every month without opening an app. A mutual fund suits that well. FXAIX has no minimum and accepts exact dollar amounts, so $400 on the 1st buys exactly $400 of the fund, fractions included, with no thought about share price.

VOO can do something similar, but it depends on the broker. A single share costs several hundred dollars, so a broker without fractional shares forces whole-share purchases and leftover cash. Most large brokers now support fractional ETF buying, though recurring ETF purchases are sometimes less polished than recurring mutual fund purchases. Checking how a specific broker handles it takes a few minutes and is best done before committing.

A $400-a-month example

Take $400 going in on the 1st of every month, which is $4,800 a year. With FXAIX, each deposit becomes exactly $400 of the fund with no leftover cash. With VOO at an illustrative $700 a share and no fractional buying, the first month buys zero shares, and the second buys one with about $100 left over. With fractional buying on, the result matches FXAIX. The fee difference on a $50,000 balance would be $7.50 a year for FXAIX against $15 for VOO, which is smaller than the hassle cost of a missed or partial purchase.

Taxes: where VOO has the structural edge

In a regular taxable brokerage account, ETFs tend to pass along fewer capital gains than mutual funds. When investors sell a mutual fund, the fund may have to sell holdings to raise cash, and the resulting gains are distributed to everyone who still holds it. ETFs can instead hand over low-cost-basis shares in kind, which keeps those gains from reaching holders. That is the main reason VOO is often called the more tax-efficient option, as explained by My ETF Journey.

FXAIX isn't a bad actor here, though. Index funds trade very little, so their capital gains distributions tend to be small, even if the structural advantage belongs to VOO. For exact figures, Fidelity publishes the fund's distribution history, and it takes a few minutes to check.

Inside an IRA or 401(k), the whole point is moot, since capital gains distributions are not taxed there. That is why where the account sits, covered in the Roth IRA vs brokerage account breakdown, often matters more than which fund goes in it.

FXAIX vs VOO for a Roth IRA

In a Roth IRA the tax edge disappears, so the decision comes down to fees and convenience. At Fidelity, FXAIX usually fits best: the lower fee, exact-dollar contributions and no fractional-share question. At a different brokerage, VOO is the practical choice. Either fund can take a full-year contribution in one purchase, though a fractional-share-capable broker is needed for VOO to use every dollar.

Trading and flexibility

VOO trades all day, which allows limit orders and intraday prices. FXAIX fills at the end-of-day price regardless of when the order goes in. For a monthly buy-and-hold investor, that difference is close to irrelevant, and intraday pricing may even encourage more tinkering than is useful. A developer building a portfolio tracker in Python will find either ticker equally easy to pull.

Portability is the other point. FXAIX is a Fidelity fund. Some other brokers can hold it after a transfer, but new purchases there often carry a transaction fee, while VOO can be held and bought at essentially any broker without one.

Can you own both, and what about SPY?

Owning both FXAIX and VOO adds no diversification, because they hold the same 500 companies. Splitting between them only makes sense for a practical reason, such as keeping one in a Fidelity account and one elsewhere.

SPY is the third name that shows up in these comparisons. It is an older S&P 500 ETF with a higher expense ratio, around 0.09% at last check, which is why VOO tends to be the ETF pick for long-term holders. SPY's main draw is heavy trading volume, which matters to active traders and not to someone buying monthly.

Which one fits which setup

• For automatic monthly buys in a Fidelity retirement account, FXAIX tends to fit best. The lower fee and exact-dollar investing line up, and the tax difference doesn't apply.
• A taxable account at Fidelity is a closer call. FXAIX's small distributions and exact-dollar buys are a fair trade for VOO's structural tax edge, and either choice is defensible. VOO also keeps options open if the account moves later.
• Anywhere outside Fidelity, taxable or retirement, it's VOO. FXAIX is often unavailable there or carries a transaction fee, and in a taxable account VOO's tax edge applies too.

Nothing here says one fund is a mistake. Both give the same exposure at a cost near zero.

FAQ

Is VOO or FXAIX better?

Neither wins outright, since both track the S&P 500 and their returns are nearly identical. FXAIX has a slightly lower expense ratio (0.015% vs 0.03%) and suits automatic monthly investing at Fidelity. VOO has a structural tax edge in taxable accounts and can be bought at any brokerage.

Is the Fidelity 500 Index Fund the same as the S&P 500?

FXAIX, the Fidelity 500 Index Fund, is built to track the S&P 500, so it holds the same companies in nearly the same proportions. Small differences in returns come from fees and cash handling.

Is it good to invest in both VOO and FXAIX?

It adds no diversification, since both hold the same 500 companies. Holding both only makes sense for account-level reasons, such as one fund in a Fidelity account and one at another broker.

Does the difference between FXAIX and VOO matter in an IRA or 401(k)?

The tax difference mostly disappears inside an IRA or 401(k), because capital gains distributions are not taxed there. In those accounts the choice comes down to fees, convenience and which brokerage holds the account.

The bottom line

Picking between these two takes less effort than it feels like. Match the fund to the account: FXAIX for automatic buys in a Fidelity retirement account, VOO anywhere outside Fidelity, and either one in a taxable Fidelity account. Whichever one goes in the account, the habit of buying every month will do far more for the balance than the 0.015% gap between them.