The 7 Best Fidelity Mutual Funds to Buy and Hold

Vanguard is best known for being one of the most fee-friendly fund managers thanks to its unique cooperative structure. Shareholders of Vanguard’s mutual funds are effectively the owners of the company itself, meaning profits are returned to investors in the form of lower fees rather than distributed to outside shareholders.

However, while Vanguard still maintains some of the lowest costs on average in the industry, it doesn’t hold the title of the absolute cheapest fund provider. That distinction belongs to Fidelity Investments, which offers a unique lineup of zero-cost mutual funds.

Called the Fidelity Zero funds, these products live up to their name with a true 0% expense ratio. Combined with no minimum investment requirements and zero transaction fees on Fidelity’s brokerage platform, they allow investors to gain broad diversification at no cost.

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To understand why this is notable, it helps to know what expense ratios cover. Beyond a management fee for overseeing the portfolio, they also include administrative, operational and marketing costs — from trading expenses to licensing the index benchmark a fund tracks. Fidelity has found several ways to eliminate these costs altogether.

First, Fidelity Zero funds use proprietary indexes developed in-house instead of paying third-party index providers like S&P Global or MSCI. This removes the licensing fee entirely.

Moreover, these funds employ a sampling methodology, meaning they don’t buy every single stock in the index to replicate it. Instead, they purchase a representative subset designed to closely mirror the benchmark’s performance, lowering trading and operational costs.

Lastly, within each fund, Fidelity engages in securities lending, loaning out in-demand stocks to short sellers in exchange for a borrowing fee. This extra revenue further offsets expenses and helps sustain the zero-cost structure.

Even if you decide not to opt for one of Fidelity’s Zero funds, many other Fidelity mutual funds still feature extremely low expense ratios — some as low as 0.015%, or just $1.50 a year in fees on a $10,000 investment.

Here are seven of the best Fidelity mutual funds to buy and hold:

Fidelity Zero Large Cap Index Fund (FNILX)

“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.”

FNILX is a straightforward option for blue-chip U.S. exposure. This Fidelity fund tracks the Fidelity U.S. Large Cap Index, which simply market-cap weights the largest 500 U.S. companies. This methodology ensures a higher allocation to larger companies, which is currently dominated by both growth and technology sector stocks. FNILX has returned an annualized 16.2% over the trailing five-year period.

Fidelity Zero Total Market Index Fund (FZROX)

“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. For passive core U.S. equity exposure, FZROX is a good option.

Unlike FNILX, FZROX is not limited to the 500 largest U.S. stocks by market cap. This fund tracks the broader Fidelity U.S. Total Investable Market Index, which includes an additional 2,000-plus mid- and small-cap stocks. However, FZROX has slightly lagged FNILX over the last five years, with a 15.9% annualized total return due to the relative outperformance of large-cap U.S. stocks.

Fidelity Zero Extended Market Index Fund (FZIPX)

For historically harder-to-access segments of the stock market like small and mid-cap stocks, Fidelity’s Zero funds have democratized exposure for retail investors. For this role, consider FZIPX.

This fund is designed as a complement to large-cap-only solutions like FNILX. It tracks the Fidelity U.S. Extended Investable Market, which spans the 2,000 mid- and small-cap stocks that come after the 500 tracked by FNILX. It has underperformed over the last five years, with a 13% annualized total return, but it could see a comeback if large-cap stocks begin to falter.

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.” Combining FZILX with FZROX provides a globally diversified, market-cap-weighted portfolio with no fees.

FZILX tracks the Fidelity Global ex U.S. Index, which spans over 2,180 market-cap-weighted international equities. Crucially, it is diversified across both developed and emerging markets. Developed markets include countries such as Japan, the U.K., Switzerland, Germany, Australia and Canada, while emerging markets encompass nations like China, Taiwan, India and Brazil.

[READ: 7 Best International Stock Funds to Buy for 2025]

Fidelity 500 Index Fund (FXAIX)

If brand-name exposure is important to you, FXAIX remains a strong, though slightly more expensive, alternative to FNILX. It tracks the renowned S&P 500 index and has existed in various forms since 1988, with the current share class debuting in 2011. The fund charges a minimal 0.015% expense ratio.

Unlike FNILX, which passively captures the 500 largest U.S. stocks by market capitalization, the S&P 500 index is overseen by a committee that ultimately decides which companies are included or removed. The methodology also imposes stricter requirements for liquidity and consistent profitability, making it a bit more selective — and more actively curated — than many investors realize.

Fidelity Total Market Index Fund (FSKAX)

Similarly, if you prefer a brand-name alternative to FZROX, FSKAX is the Fidelity fund to consider. It tracks the Dow Jones U.S. Total Stock Market Index, holding more than 3,800 small-, mid- and large-cap stocks weighted by market capitalization. Like FXAIX, it charges a 0.015% expense ratio, so even though it is not one of Fidelity’s Zero funds, the long-term cost difference is minimal.

One practical use for FSKAX if you already own FZROX is as a tax-loss harvesting partner. Since the two funds track different benchmarks, the IRS does not consider them substantially identical. However, their performance, top holdings and sector composition are similar enough. Thus, you can sell one to realize a capital loss and immediately reinvest in the other without waiting 30 days or triggering wash-sale rules.

Fidelity U.S. Bond Index Fund (FXNAX)

The Fidelity Zero lineup does not yet include an option for bond exposure, so if you want to reduce portfolio risk at a low cost, the best choice is FXNAX. This Fidelity fund tracks the well-known Bloomberg U.S. Aggregate Bond Index, which holds more than 10,000 bonds across U.S. Treasurys, investment-grade corporate bonds and mortgage-backed securities for a 0.025% expense ratio.

While the income potential for FXNAX is decent, with a 4.1% 30-day SEC yield, tax efficiency is not ideal. The interest from corporate bonds in FXNAX is taxed at ordinary income rates, unlike Treasurys, which are exempt from state taxes. Investors should also note the fund’s 5.9-year duration, meaning it is moderately sensitive to interest rate changes. That led to sizable price declines in 2022 when rates rose.

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The 7 Best Fidelity Mutual Funds to Buy and Hold originally appeared on usnews.com

Update 10/20/25: This story was previously published at an earlier date and has been updated with new information.