How low can expenses go? In the case of some newer Fidelity funds, including Fidelity ZERO Total Market Index Fund (FZROX), the answer is an expense ratio of 0.00% and a transaction fee of $0. That is very reasonable. Bear in mind, however, that FZROX is a new fund. Therefore, there is no real history to judge it against other investments. Nevertheless, it does contain a nice set of 2,530 different companies, so it is almost a “total market” fund.

FZROX Top Ten Holdings of 2530 holdings

By way of comparison, ETF ITOT (ISHARES CORE S&P TOTAL US STOCK MARKET) has 3,226 positions so it is closer to the total market. ITOT also has a known dividend, more history and an XTF rating of 9.6. You can also trade ITOT on Fidelity’s platform for $0 per trade and the expense ratio is a very low 0.03%.

FZROX Market Sectors

Therefore, if forced to choose between FZROX and ITOT today, I would be more inclined to buy ITOT. I like the broader diversification. Either would be a good way to participate in the total market, which isn’t a bad strategy for the long-term investor. Note: we own shares of ITOT.