Everyone in the investment industry wants a slice of your returns. That’s why, as a long-term buy-and-hold investor, it pays to follow a few basic rules when picking mutual funds.
Start by choosing a low- or no-commission brokerage. Competition has brought trading costs down across the board. The days of paying $9.95 per trade are largely gone.
You also shouldn’t be paying sales loads. These are extra fees charged on some mutual funds, either when you buy (front-end loads) or when you sell (back-end loads). Load funds don’t offer better returns than no-load funds and mostly benefit the broker selling them.
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Next, keep an eye on expense ratios. These are annual fees expressed as a percentage of your invested assets and deducted automatically. Many index funds charge as little as 0.02% , and the Fidelity Zero line of funds has no charge (see below). Actively managed funds usually cost more, but fees can still vary widely.
“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.
Finally, pay attention to turnover. This measures how frequently a fund buys and sells holdings, expressed as a percentage of the portfolio replaced in a year. High turnover can lead to large taxable capital gains distributions at year-end, which you’ll owe taxes on if the fund is held in a regular brokerage account rather than a tax-sheltered one like a Roth IRA or 401(k).
“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 Mark 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.”
Here are seven of the best Fidelity mutual funds to buy and hold:
| Fund | Expense ratio |
| Fidelity 500 Index Fund (ticker: FXAIX) | 0.015% |
| Fidelity Total Market Index Fund (FSKAX) | 0.015% |
| Fidelity Zero Large Cap Index Fund (FNILX) | 0% |
| Fidelity Zero Total Market Index Fund (FZROX) | 0% |
| Fidelity Zero Extended Market Index Fund (FZIPX) | 0% |
| Fidelity Zero International Index Fund (FZILX) | 0% |
| Fidelity U.S. Bond Index Fund (FXNAX) | 0.025% |
Fidelity 500 Index Fund (FXAIX)
FXAIX is one of Fidelity’s longest-running funds, originally launched in 1998, with this particular share class debuting in 2011. It’s also one of the cheapest ways to gain exposure to the S&P 500, charging just 0.015%. That means an investor with $10,000 in the fund pays only $1.50 a year in fees. On Fidelity’s platform, there’s no minimum investment requirement and no transaction fee.
The fund is also extremely tax efficient. Its turnover rate is just 3%, far lower than most actively managed funds. Because it tracks a broad index with minimal changes and has no active manager deciding when to buy or sell stocks, the fund generates few taxable capital gains. Distributions in April and December have consistently been under $1 per share, with regular dividends taxed at the qualified level.
Fidelity Total Market Index Fund (FSKAX)
While the S&P 500 is often viewed as a broad-market benchmark, it isn’t as purely rules-based as many believe. It follows objective criteria on size, liquidity and earnings consistency, but also relies on a selection committee to decide which companies to add or remove. This adds a subjective element to the benchmark. And with just 500 stocks, it doesn’t fully capture the total U.S. market.
A more complete benchmark is the Dow Jones U.S. Total Stock Market Index, which includes more than 3,800 companies. Because it’s also market-cap weighted, its top holdings are nearly identical to those in the S&P 500, but it extends exposure farther down the market cap spectrum. Fidelity’s fund tracking this broader index is FSKAX, which matches FXAIX with a 0.015% expense ratio and low 3% turnover rate.
Fidelity Zero Large Cap Index Fund (FNILX)
“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. With the right mix of Fidelity funds, an investor could theoretically build a fully passive portfolio at virtually no cost. FNILX is the no-fee, large-cap U.S. equity alternative to FXAIX.
This fund tracks the proprietary Fidelity U.S. Large Cap Index, allowing Fidelity to avoid paying licensing fees to a third-party index provider. The fund also uses sampling, meaning it doesn’t hold every single stock in the index but instead holds a representative mix to closely match index performance. Additionally, the fund can lend out securities to short sellers and earn interest income.
Fidelity Zero Total Market Index Fund (FZROX)
FZROX is Fidelity’s zero-fee counterpart to FSKAX. Like FNILX, it combines a proprietary in-house benchmark with a sampling strategy and securities lending program to fully offset operating costs and deliver a true 0% expense ratio. It also has an ultra-low turnover rate of just 1%, which enhances tax efficiency for long-term investors by minimizing the size and frequency of capital gains distributions.
Practically speaking, the portfolio looks nearly identical to FSKAX. Both are market-cap weighted and share the same top holdings. The exclusion of some less liquid small-cap names to accommodate sampling doesn’t materially affect performance for FZROX. The key difference comes down to whether you’re comfortable relying on Fidelity’s benchmark over those from brand-name index providers.
[10 Best Low-Cost Index Funds to Buy]
Fidelity Zero Extended Market Index Fund (FZIPX)
The practical difference between FZROX and FNILX comes down to coverage. FNILX focuses strictly on large-cap stocks, excluding thousands of small- and mid-cap companies. FZROX includes these smaller names, but because it’s still market-cap weighted, those stocks receive only minimal allocations. For investors who want more meaningful exposure, an ultra-low-cost way to do so is by adding FZIPX.
FZIPX tracks the Fidelity U.S. Extended Investable Market Index, which includes roughly 2,500 U.S. stocks outside the largest 500. However, the fund does have a higher turnover rate of 15%. That’s partly due to the nature of the small- and mid-cap space, where companies frequently grow into or fall out of the top 2,500, requiring more regular portfolio adjustments. This added churn can reduce tax efficiency.
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.” FZILX tracks over 2,200 international developed- and emerging-market equities with the usual zero expense ratio.
Funds like FZILX make global investing far easier. In the past, investors had to rely on American depositary receipts, with limited selection and wide spreads, or convert currency to buy foreign-listed stocks, often incurring steep fees. FZILX removes those barriers with broad international exposure at zero cost and a low annual portfolio turnover rate of just 3%.
Fidelity U.S. Bond Index Fund (FXNAX)
Long-term investors don’t need complex alternatives or expensive hedging strategies to manage risk. A straightforward way to reduce overall portfolio volatility is by adding a high-quality bond fund like FXNAX. This Fidelity bond fund charges a low 0.025% expense ratio. That low cost helps reduce return drag and puts it ahead of many actively managed bond funds on fees alone.
FXNAX tracks the Bloomberg U.S. Aggregate Bond Index, a broad benchmark covering investment-grade U.S. bonds including Treasurys, corporate bonds, mortgage-backed securities and other government-backed debt. While not perfect since it excludes high-yield and international bonds, it still offers wide coverage of the core U.S. bond market and has a strong track record dating back decades.
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The 7 Best Fidelity Mutual Funds to Buy and Hold originally appeared on usnews.com
Update 07/14/25: This story was previously published at an earlier date and has been updated with new information.