Which Fidelity International Index Fund Should You Buy?

Updated on February 2nd, 2023
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The backbone of a three-fund portfolio consists of a domestic stock fund (usually the S&P 500 or a total stock market index fund), an international stock fund, and a U.S. bond fund.

For Fidelity investors, there are many international stock funds to choose from, which can make it difficult for new investors to decide which one they should buy. In this article, I’ll break down the Fidelity international index fund options, so that you can pick the one that is right for you.

Who This Article Is For

Before we dive into the analysis, I wanted to highlight who this analysis is intended for. This article applies primarily to Fidelity investors or those who have Fidelity index funds as part of their retirement investment options.

Vanguard investors should use Vanguard international index funds, such as Vanguard FTSE All-World ex-US Index Fund (VFWAX, ER = 0.11%) or ETF (VEU, ER = 0.11%). Vanguard Total International Stock Index Fund Admiral Shares (VTIAX, ER = 0.11%) or ETF (VXUS, ER = 0.11%) is another option.

Schwab investors should use Schwab international index funds, such as Schwab International Index Fund (SWISX), which has an expense ratio of 0.06% and tracks the MSCI EAFE index.

The reason why you shouldn’t buy Fidelity funds from a Vanguard or a Schwab account is because there is a transaction fee to purchase Fidelity funds from Vanguard (typically $8-$20 if you buy online) or Schwab ($76 transaction fee for online purchases).

For investors with other brokers that might also charge transaction fees to buy Fidelity funds, you should purchase a low-cost index ETF, such as Vanguard’s VXUS or VEU or iShares’s IEFA or IXUS, and pay the usual low commission fee that you would pay to buy any other stock.

Fidelity International Index Funds — What You Should Not Buy

Using Fidelity’s mutual fund screener, you can quickly filter for international equity funds offered by Fidelity. There are a whopping 44 of them:

There are over 40 Fidelity international equity funds, but you should avoid most of them since they are actively managed.

When I’m reviewing a new mutual fund, the first thing I look at is its expense ratio. It’s easy to do this with Fidelity, as you can simply sort by net expense ratio to find the lowest cost mutual funds. These will almost always be the index funds.

Fidelity does offer a number of actively managed mutual funds — I would avoid them because of their high fees and lower diversification compared to the index fund options.

They also have introduced “smart beta” international ETFs such as Fidelity International High Dividend ETF (FIDI) Fidelity International Value Factor ETF (FIVA). I would avoid these as well. Stick with the international index funds that I will discuss below.

Fidelity International Index Fund (FSPSX)

This index fund (FSPSX) tracks the MSCI EAFE (Europe, Asia, Far East) index, which tracks developed markets. It has the lowest expense ratio of all of the Fidelity international index funds at 0.045%. One downside of the fund is that it does not give you exposure to emerging markets. It also does not give you access to small-cap international stocks. These differences are small and probably won’t make a big difference in the long-run, but if you can get access to these international stock markets with a minimal increase in expense ratio, why not?

Fidelty International Index Fund gives exposure to developed international markets, but does not invest in emerging markets like India.

Fidelity Global ex U.S. Index Fund (FSGGX)

FSGGX is an older version of Fidelity’s total international index fund. It has an expense ratio of 0.06%, and tracks the MSCI All Country World Ex-US Index. It gives exposure to large-cap developed and emerging markets stocks.

In my opinion, because it has the same expense ratio as the Fidelity Total International Index Fund, with slightly less diversification (no small-cap exposure), I don’t think FSGGX makes sense for most investors unless you have a particular aversion to small cap international stocks.

Fidelity Total International Index Fund (FTIHX)

FTIHX tracks the MSCI ACWI (All Country World Index) ex-USA Investable Market Index. It was only introduced in 2016, and already has $1.9 billion in assets under management. Because it gives you the broadest exposure to international stocks (developed and emerging markets, small-cap and large-cap), all at a very low expense ratio of 0.06%.

Fidelity Total International Index Fund (FTIHX) offers the broadest exposure to international stocks (developed and emerging markets, small-cap and large-cap), all at a very low expense ratio of 0.06% Click To Tweet

Fidelity Emerging Markets Index Fund (FPADX)

For investors who may have the Fidelity International Index Fund (FSPSX) in their 403(b), or just want to slice and dice and get more or less exposure to emerging markets, Fidelity offers a low cost emerging markets index fund (FPADX). It has an expense ratio of just 0.08%.

To get direct exposure to emerging markets like China at Fidelity, use the Fidelity Emerging Markets Index Fund.

Fidelity ZERO International Index Fund (FZILX)

In 2018, the buzz in the index fund world came from the introduction of zero expense ratio index funds at Fidelity. For international stock exposure, Fidelity introduced the Fidelity ZERO International Index Fund (FZILX). It has an expense ratio of (you guessed it!), 0.00%. It tracks the Fidelity Global Ex US Index, an index designed to track the performance of international large- and mid-cap stocks. Therefore, it does not give you exposure to international small-cap stocks like FTIHX.

iShares Core MSCI EAFE ETF (IEFA)

iShares Core MSCI EAFE ETF (IEFA) is essentially the ETF version of the Fidelity International Index Fund (FSPSX), but it is managed by iShares. They are commission-free to trade within Fidelity accounts. Like FSPSX, it tracks the MSCI EAFE index. It has an expense ratio of 0.08% and currently has $55.2 billion under management.

iShares Core MSCI Total International Stock (IXUS)

iShares Core MSCI Total International Stock (IXUS) tracks the same index as the Fidelity Total International Index Fund (FTIHX), but in an ETF form. Like IEFA, it is commission-free to trade within Fidelity accounts. It has an expense ratio of 0.10% and currently has $13.3 billion in assets.

Conclusion

Here’s a summary table of your Fidelity international index fund options:

Fund Ticker Expense Ratio Developed Markets Emerging Markets Large-Cap Small-Cap
Fidelity International Index Fund FSPSX 0.045% X X
Fidelity Global ex-US Index Fund FSGGX 0.06% X X X
Fidelity Total International Index Fund FTIHX 0.06% X X X X
Fidelity Zero International Index Fund FZILX 0.00% X X X
Fidelity Emerging Markets Index Fund FPADX 0.08% X X

As you can see, Fidelity has many international index fund options. I would pick either the Fidelity Zero International Index Fund (FZILX) or Fidelity Total International Index Fund (FTIHX). FZILX has the lowest expense ratio (zero!) and gives exposure to developed international and emerging markets stocks, while FTIHX gives exposure to small-cap and large-cap developed international and emerging markets stocks at a low expense ratio of 0.06%.

My preference at Fidelity is to use mutual funds in retirement accounts and ETFs in taxable accounts, because mutual funds are less tax-efficient than ETFs at Fidelity. My preferred ETFs for Fidelity investors are the iShares ETFs IXUS or IEFA, which have low fees and are commission-free at Fidelity.

What do you think? If you are a Fidelity investor, which international index fund do you use?

11 COMMENTS

  1. Thank you so much for your research! I was glad to see FTIPX since that’s the fund I have, too! Any plans for a similar article on bond funds (pleeeeease)! The Fidelity advisor I spoke with recommended Guggenheim Investmend Grade Bond (SIUPX). It has a high net ER and will have a higher gross ER next year, although returns looked good. Now I’m trying to decide if I should get out and look for a different bond fund with lower ER.

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  2. Nice article! I did the same research earlier this year to build a list of tax-loss harvesting “groups” and it definitely took some digging to get all the Fidelity/iShares funds straight.

    One typo: “(for example, IEFA and VXUS are commission-free at Fidelity)”
    Should be: “(for example, IEFA and IXUS are commission-free at Fidelity)”

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