Fidelity, one of the largest index mutual fund providers, made waves in the investment community when it announced the introduction of two no-fee funds. Among these funds is FZROX, an index fund that has gained attention for its unique no-fee structure. This article aims to explore FZROX, its features, and whether it is a suitable investment option for individuals.
Index funds have gained popularity due to their simplicity and low costs. These funds aim to track the performance of a specific index, such as the S&P 500, by investing in a diversified portfolio of stocks. FZROX follows a similar strategy but distinguishes itself by charging investors absolutely nothing in expense ratios. This is in contrast to other index funds, such as VTI, which charges a minimal expense ratio of 0.03%.
CEFs, or closed-end funds, are often associated with bond funds. However, FZROX surprises investors by offering a higher average yield of 9.4% compared to equity CEFs. This makes it an attractive option for those seeking income from their investments.