Trend Report
Fidelity 500 Index Fund: A Low-Cost Way to Own the S&P 500
Updated August 18, 2026
The Fidelity 500 Index Fund has become a go-to choice for investors seeking broad U.S. market exposure without high fees. With an ultra-low expense ratio of 0.015%, it's no surprise this fund is trending among both novice and seasoned investors. Here's what you need to know about this popular index fund and why it might fit into your investment strategy.
Key takeaways
- ✓The Fidelity 500 Index Fund offers a 0.015% expense ratio, making it one of the cheapest ways to invest in the S&P 500.
- ✓It provides instant diversification across 500 of the largest U.S. companies, suitable for long-term growth.
- ✓You can invest with no minimum through Fidelity, making it accessible to all investors.
- ✓Consider pairing it with other funds to achieve global and small-cap exposure for a balanced portfolio.
- ✓Always evaluate your risk tolerance and investment timeline before committing.
What Is the Fidelity 500 Index Fund?
The Fidelity 500 Index Fund (ticker: FXAIX) is a mutual fund that aims to mirror the performance of the S&P 500 Index, which includes 500 of the largest U.S. companies by market capitalization. This means by investing in this single fund, you get instant diversification across major sectors like technology, healthcare, and finance.
Because it's an index fund, it doesn't try to beat the market but rather replicate its returns. This passive management approach keeps costs low and has historically delivered solid long-term growth, making it a staple in many retirement and taxable accounts.
Why Is It Gaining Popularity?
One of the main reasons for its surge in popularity is its rock-bottom expense ratio of just 0.015%. That means for every $10,000 you invest, you pay only $1.50 per year in fees. Over time, low fees can significantly boost your returns compared to higher-cost actively managed funds.
Additionally, with the S&P 500's strong performance in recent years, investors are flocking to index funds as a simple, low-effort way to participate in the stock market's growth. The trend reflects a broader shift toward passive investing and a preference for transparent, low-cost options.
How to Invest in the Fidelity 500 Index Fund
You can purchase the Fidelity 500 Index Fund directly through a Fidelity brokerage account, either as a taxable investment or within tax-advantaged accounts like an IRA or 401(k). There's no minimum initial investment for most accounts, making it accessible to beginners.
If you're comparing it to similar options like Vanguard's 500 Index Fund, you'll find Fidelity's expense ratio is slightly lower, and there's no account minimum for the mutual fund version. However, be sure to consider your overall investment strategy and how this fund fits into your asset allocation.
Key Considerations Before Investing
While the Fidelity 500 Index Fund offers many benefits, it's important to remember that it only tracks large-cap U.S. stocks. That means you won't have exposure to small-cap companies or international markets. For a fully diversified portfolio, you may want to pair it with other funds.
Also, past performance doesn't guarantee future results. The S&P 500 has had periods of significant volatility, so it's crucial to have a long-term perspective and a risk tolerance that aligns with market fluctuations. Consider consulting a financial advisor if you're unsure how to proceed.
How to Get Started
Ready to explore the Fidelity 500 Index Fund further? Our comprehensive guide breaks down the fund's performance, fees, and how it compares to other index funds. We also provide tips on how to integrate it into your investment plan.
Check out our [fidelity 500 index fund buying guide] for detailed insights and actionable steps. It's designed to help you make an informed decision, whether you're a first-time investor or looking to rebalance your portfolio.
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