Fidelity Index Funds Offer Low-Cost Alternatives to Active Management

BOSTON, Mass., Sept. 23, 2026 — Fidelity Investments offers actively managed mutual funds alongside index funds, giving investors different ways to gain exposure to U.S. and international equities. Active funds rely on portfolio managers to select securities and make allocation decisions, while index funds generally seek to track defined market benchmarks.

Fidelity’s active-management lineup includes the Fidelity Magellan Fund, Fidelity Contrafund and Fidelity Blue Chip Growth Fund. The company also offers index funds with expense ratios ranging from 0% to 0.035%, including funds that track broad U.S. and international equity markets.

Fidelity’s Active Funds Carry Long Management Histories

The Fidelity Magellan Fund became widely known during Peter Lynch’s 13-year tenure as manager, when the fund generated an annualized return of 29%. After Lynch left in 1990, subsequent managers struggled to match that record. The fund has also been criticized as a “closet index fund” during periods when its portfolio overlapped substantially with its benchmark while charging active-management fees.

Fidelity Contrafund has had a longer period under one manager. William Danoff has managed the fund since 1990, spanning more than 35 years, and the fund has delivered substantial long-term outperformance during his tenure. Danoff is scheduled to step down at the end of 2026, with two co-managers set to take over. The fund’s historical performance under Danoff predates the upcoming management transition.

Active Funds Carry Different Portfolio Considerations

The Fidelity Blue Chip Growth Fund has been a longstanding option in 401(k) plans and has historically outperformed the Russell 1000 Growth Index and the Morningstar large-growth category average. The fund has a 26% portfolio turnover rate, which can contribute to realized gains and taxable year-end capital-gains distributions for investors who hold the fund in taxable accounts.

Index funds generally use rules-based strategies tied to specific benchmarks and tend to have lower expense ratios and portfolio turnover than actively managed funds. Wes Moss, managing partner and chief investment strategist at Capital Investment Advisors, told U.S. News, “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.”

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Seven Fidelity Index Funds Cover Major Equity Segments

Seven Fidelity index mutual funds include the Fidelity Total Market Index Fund, Fidelity 500 Index Fund, Fidelity International Index Fund, Fidelity ZERO Total Market Index Fund, Fidelity ZERO Large Cap Index Fund, Fidelity ZERO Extended Market Index Fund and Fidelity ZERO International Index Fund.

The Fidelity Total Market Index Fund (FSKAX) has a 0.015% expense ratio and tracks the Dow Jones U.S. Total Stock Market Index. The fund holds more than 3,700 stocks across large-, mid- and small-capitalization companies and uses market-cap weighting. Portfolio turnover is 3%. The Fidelity 500 Index Fund (FXAIX) also charges a 0.015% expense ratio and tracks the S&P 500 Index. Portfolio turnover is 3%.

The Fidelity International Index Fund (FSPSX) carries a 0.035% expense ratio and tracks the MSCI EAFE Index, which covers developed markets outside the United States and Canada. Holdings include companies in Japan, the United Kingdom, France, Switzerland, the Netherlands, Spain, Sweden, Italy, Singapore, and Germany. Portfolio turnover is 4%.

ZERO Funds Carry No Expense Ratio

The Fidelity ZERO Total Market Index Fund (FZROX) has a 0% expense ratio and tracks the Fidelity U.S. Total Investable Market Index. The fund provides exposure to U.S. large-, mid- and small-capitalization stocks and uses statistical sampling to track the index. Fidelity also lends securities held by the fund to generate additional income. Portfolio turnover is 2%.

The Fidelity ZERO Large Cap Index Fund (FNILX) has a 0% expense ratio and tracks the proprietary Fidelity U.S. Large Cap Index. The fund uses sampling and securities lending, with portfolio turnover of about 5%. The Fidelity ZERO Extended Market Index Fund (FZIPX) also has a 0% expense ratio and tracks the Fidelity U.S. Extended Investable Market Index. The fund covers roughly the next 2,000 companies below the 500 largest U.S. companies, providing exposure to mid- and small-capitalization stocks.

The Fidelity ZERO International Index Fund (FZILX) has a 0% expense ratio and tracks the proprietary Fidelity Global ex U.S. Index. The fund includes developed and emerging markets, with exposure to countries including China, Taiwan, India, and Brazil.