Disclaimer: We are not financial advisors. This article compares publicly available index funds and ETFs as of July 2026. Expense ratios, fund holdings, and performance track records change. Before investing, review each fund’s current prospectus and confirm your investment strategy aligns with your goals and risk tolerance. We earn affiliate commissions when you open investment accounts through our links — this does not affect fund pricing or your account fees.
Quick Verdict Comparison
| Fund | Ticker | Type | Expense Ratio | Minimum Investment | Best For |
|---|---|---|---|---|---|
| Vanguard S&P 500 ETF | VOO | ETF | 0.03% | $1 (fractional) | All investors |
| Fidelity S&P 500 Index Fund | FSKAX | Mutual Fund | 0.025% | $1 | Cost-obsessed investors |
| Schwab U.S. Equity ETF | SWTSX | Mutual Fund | 0.03% | $1 | Schwab account holders |
Why Index Funds Matter (And Why This Comparison Matters More)
Here’s the uncomfortable truth: 85% of actively managed funds underperform the S&P 500 after fees over 15-year periods. That’s not random. It’s math. Fees compound.
An S&P 500 index fund is the antidote. Buy one, hold it for decades, don’t check it daily, and you’ll outperform most professional investors. But “buy an S&P 500 fund” leaves a question: which one?
The difference between funds sounds trivial—0.03% vs. 0.025%—but across $100,000, that’s $25–$30/year you either save or waste. Multiply that across 30 years with compounding, and you’re talking about $1,000–$1,500 in extra fees for picking the wrong fund.
This comparison addresses the real question: Which S&P 500 fund actually exists in your brokerage, and does it matter?
What Makes an S&P 500 Index Fund Good?
Before comparing specific funds, understand the five things that actually matter:
1. Expense ratio (how much you pay annually). This is the only guaranteed drag on performance. A 0.10% ratio costs $100/year per $100,000 invested. A 0.03% ratio costs $30. Over time, that difference compounds into real money.
2. Tracking error (how closely it follows the index). Perfect tracking is impossible. Every fund has cash drag, transaction costs, and timing misalignments. The best funds track within 0.01% of the actual S&P 500. Mediocre funds drift 0.10%+ annually. That gap matters.
3. Fund size (assets under management). Larger funds have more trading efficiency. A fund managing $150 billion spreads costs across more investors. A fund managing $500 million has proportionally higher per-share costs.
4. Brokerage integration (can you buy it at your brokerage?). VOO is universal—available everywhere. FSKAX is Fidelity-specific. If you use Schwab, buying FSKAX costs extra fees (transaction costs). This matters more than you think.
5. Tax efficiency (dividend and turnover management). Index funds with low turnover generate fewer taxable events. For taxable (non-retirement) accounts, this compounds. ETF structures are often more tax-efficient than mutual funds—a detail that saves real money.
Vanguard VOO: The Universal Choice
Ticker: VOO | Type: ETF | Expense Ratio: 0.03% | Assets: $400+ billion
Vanguard created index investing as a category. VOO is the most-owned S&P 500 fund in existence. It’s available everywhere (every broker, every custodian), fractional shares work seamlessly, and costs are rock-bottom.
Where VOO leads:
Massive scale ($400+ billion AUM) means rock-solid tracking—it trails the index by ~0.02% annually, which is as close to perfect as you can get. ETF structure is tax-efficient; dividend distributions are minimal because Vanguard runs it lean.
It’s available everywhere. Open an account at Fidelity, Charles Schwab, E*TRADE, or a no-name brokerage—VOO is there, zero transaction fees, no friction. This universality is underrated. If you ever change brokers, you’re not stuck selling and rebuying; your VOO follows you.
Vanguard’s reputation is pristine. They’re structured as a mutual company (owned by their funds), so management incentives align with investor interests. That’s not unique, but it resonates.
Where VOO stumbles:
0.03% expense ratio is tied for highest among S&P 500 options. That’s still cheap—1/10th of what many actively managed funds charge—but when competitors offer 0.025%, the gap exists.
As an ETF, you must buy in whole-share increments on most platforms (though fractional shares are increasingly standard). Older brokers occasionally charge trading fees for ETF purchases (rare now, but check).
Vanguard’s fund family is enormous and somewhat overwhelming for beginners—18 similar S&P 500 options exist across ETFs and mutual funds, which creates confusion.
Best for: Anyone using any broker, beginners who want simplicity, investors who value universality over squeezing the last basis point of fees.
Fidelity FSKAX: The Cost Leader
Ticker: FSKAX | Type: Mutual Fund | Expense Ratio: 0.025% | Assets: $75+ billion
Fidelity’s S&P 500 mutual fund is the lowest-cost option available. 0.025% expense ratio beats VOO’s 0.03%, and Fidelity undercuts even its own competitors here.
Where FSKAX wins:
Lowest expense ratio by 1 basis point means your money works harder. On a $500,000 portfolio, you save $250/year vs. VOO. Compounded over 30 years at 7% returns, that’s roughly $2,000–$3,000 in extra wealth—not earth-shattering, but real.
Tracking is excellent (within 0.01% of the index). No frills, no surprises.
If you have a Fidelity brokerage account, FSKAX integrates seamlessly with Fidelity’s tools and reporting.
Where FSKAX disappoints:
It’s exclusive to Fidelity (and some custodians who use Fidelity). If you use Schwab or another broker, buying FSKAX involves fees or friction—either direct transaction costs or margin pricing.
As a mutual fund (not an ETF), it settles once daily. If you want to sell at 10:30 AM, you get the 4 PM closing price, not real-time pricing. For long-term holders, this doesn’t matter. For anyone trading in and out, it’s annoying.
Tax efficiency is slightly lower than VOO’s ETF structure (though still excellent for index funds).
Best for: Fidelity customers, cost-obsessed investors comfortable with Fidelity’s ecosystem, anyone with a large portfolio where that 1 basis point compounds meaningfully.
Schwab SWTSX: The Integrated Play
Ticker: SWTSX | Type: Mutual Fund | Expense Ratio: 0.03% | Assets: $40+ billion
Schwab’s U.S. Equity ETF sits at parity with VOO on fees. The differentiation is Schwab’s ecosystem—if you have a Schwab brokerage/checking account combo, integration is seamless.
Where SWTSX wins:
Tied for lowest fees among major providers (0.03%). Tracking is solid. Schwab’s all-in-one account integration means your index fund, checking account, and brokerage tools live in one dashboard.
Schwab’s customer service reputation is legitimate. If you need help, you get humans on the phone.
Where SWTSX stumbles:
No advantage over VOO on cost. You’re paying the same 0.03%. If you’re using Schwab primarily because of ecosystem, fine—but if you care about the absolute lowest fees, FSKAX is cheaper.
Outside Schwab’s ecosystem, there’s no reason to choose it. VOO is cheaper universally.
Asset base ($40B) is smaller than VOO ($400B+), which theoretically means slightly higher tracking error (though in practice, it’s negligible).
Best for: Charles Schwab account holders, anyone who values integrated banking + investing, those who prioritize customer service and simplicity over squeezing fees.
The Honest Verdict
If you’re opening a new brokerage account: Start with Fidelity or Schwab (for their all-in-one integration), then use FSKAX at Fidelity (lowest fees) or SWTSX at Schwab (integrated ecosystem).
If you already use a broker: Use whatever S&P 500 index fund that broker offers cheaply. VOO works everywhere. FSKAX works at Fidelity. SWTSX works at Schwab. Switching brokers to save 1 basis point is financial theater.
If you can’t decide: VOO. It’s good enough, available everywhere, and you’ll never regret owning Vanguard. The fee difference between 0.025% and 0.03% is roughly $25–$30 per year per $100,000 invested. That’s coffee money. Spend your energy on investing consistently instead of optimizing the last basis point.
The real truth: All three funds are excellent. You’ll beat 80%+ of investors by owning any of them and holding for decades. The difference between them is noise compared to the difference between owning an index fund and not.
Last reviewed: July 2026
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