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Forget Active Large-Cap Funds. This Passive Large-Cap Growth Index Fund Is A Winner!


Active fund managers dream of beating the market. Unfortunately, only a select few are successful. Should you then pay for active management or go with passive investing? What are some of the best large-cap growth index funds out there? If you use Fidelity®'s platform and prefer a passive strategy, we have a stellar large-cap growth index fund for your  401k, IRA or brokerage account. This index fund stacks up pretty well against some of Fidelity®'s active Goliaths!

Fidelity® Large Cap Growth Index Fund, FSPGX

The Fidelity® Large Cap Growth Index Fund, FSPGX, is an excellent mutual fund to suit your large-cap needs. The fund "seeks to provide investment results that correspond to the total return of stocks of large capitalization U.S. companies." FSPGX is extremely cheap. It has an expense ratio of 0.035%! Check out the table below (data as of 02/29/2020. NAV as of 03/30/2020. Source Fidelity®)

Fund Ticker Fund Name NAV YTD (%)1 Yr Avg. Returns (%)3 Yr Avg. Returns (%)
FSPGX Fidelity® Large Cap Growth Index Fund $15.25 -15.88+15.08+15.61

FSPGX vs 3 of Fidelity®'s active heavyweight large-cap growth funds: Performance

The Fidelity® Large Cap Growth Index Fund holds its ground againts 3 of Fidelity®'s active large-cap goliaths: Fidelity® Blue Chip Growth Fund (FBGRX), Fidelity® OTC Portfolio (FOCPX), and Fidelity® Focused Stock Fund (FTQGX). See figure 1 below.

Figure 1. Performance Comparison. FSPGX vs FBGRX vs FTQGX vs FOCPX. Source: MarketWatch. 03/30/2020

FSPGX vs 3 of Fidelity®'s active heavyweight large-cap growth funds: Expense Ratio

The Fidelity® Large Cap Growth Index fund is an extremely cheap large-cap index fund to own. How does it measure up against 3 of its active counterparts? Well, take a look below and see for yourself (Figure 2). With an appallingly low expense ratio of 0.035%, you can expect to pay about $3.50 for every $10,000 invested in FSPGX! This compares to $80.00 for FBGRX and $89.00 for both FTQGX and FOCPX. 

Figure 2. Expense Ratio Comparison: FSPGX vs FBGRX vs FTQGX vs FOCPX. Source: Fidelity. 03/30/2020

The bottom line

Investing should be cheap. If you are a passive investor looking for a large-cap growth index fund to add to your portfolio, the Fidelity® Large Cap Growth Index Fund is a solid choice. It stacks up pretty well against some of Fidelity®'s best active large-cap growth mutual funds. There are numerous advantages to active mutual fund management. Unfortunately, a discussion of such benefits is beyond the scope of this article. If you don't mind not outperforming the market, and most active fund managers struggle to do so, FSPGX should meet your large-cap needs.

[Recommended: Not comfortable picking up your own large cap mutual fund? Hire a financial advisor!]

What do you think of FSPGX? Let us know in the comment section. Please subscribe.

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