VTSAX vs FSKAX: Should You Switch to the Cheaper Index Fund?

VTSAX and FSKAX are the Vanguard and Fidelity total U.S. stock market index funds. FSKAX charges 0.015% a year and VTSAX 0.04%, so on paper the Fidelity fund is the better buy, and investors who hold VTSAX in a taxable account regularly ask whether they should sell it and buy FSKAX. For most of them the answer is no. The two funds hold nearly the same portfolio, the fee gap is $25 a year per $100,000, and the capital gains tax on a sale costs more than the lower fee recovers, often over any horizon a living investor has.

Two funds, one market

Both funds own nearly every listed U.S. company in proportion to its market value. VTSAX tracks the Morningstar US Total Market Index, which was the CRSP US Total Market Index until Morningstar bought CRSP and renamed its indexes in July 2026 without changing their methods. ^{1, 2} FSKAX tracks the Dow Jones U.S. Total Stock Market Index. ³

Sources: each fund’s April 2026 summary prospectus, June 30, 2026 fact sheets and latest annual report. After-tax figures use the SEC’s standard method at the highest historical federal rates.

FSKAX owns about 250 more stocks, but under market-value weighting the extra names are micro-caps with tiny weights, and both funds are dominated by the same large companies; the ten largest made up 32% of FSKAX on June 30, 2026. ⁴ Monthly returns of the two funds, computed from daily prices adjusted for distributions, had a correlation of 0.99998 from late 2011 to October 2026.

Summitward calculation from Yahoo Finance daily closing prices adjusted for distributions. Gaps in percentage points, computed before rounding. Fund-reported returns can differ slightly in the second decimal.

The fee gap is smaller than the noise between the indexes

The fee difference is certain and small: 0.025 percentage points a year, or $25 on $100,000. If both funds earned 7% before fees, a one-time $100,000 investment would grow $459 more in FSKAX after 10 years, $1,799 after 20 and $5,296 after 30. Those are fee effects with returns held equal.

Actual returns were not equal. The year-by-year gap ranged from −0.15 to +0.19 points, about six to eight times the fee gap, and it changed sign six times in 14 years. The monthly difference between the funds had an annualized standard deviation of about 0.11 points. Over the 15 years to October 2026 both funds compounded at about 15.2% a year. The index rules differ at the margin: which micro-caps qualify, and when names are added and removed. Index changes carry real costs for funds that must trade on announced dates; Petajisto estimated them at 21 to 28 basis points a year for S&P 500 index funds from 1990 to 2005. ⁵ The fee advantage is FSKAX’s expected edge. Whether it shows up in a given year depends on index differences of several times its size.

What the research says about cost and indexing

Sharpe’s arithmetic is the reason fees matter at all: before costs, “the return on the average actively managed dollar will equal the return on the average passively managed dollar,” and after costs the active dollar must earn less. ⁶ Fama and French found the aggregate portfolio of U.S. active equity funds sits close to the market, with “the high costs of active management” showing up as lower returns. ⁷ In S&P Dow Jones Indices’ 2025 scorecard, 79% of active large-cap funds trailed the S&P 500 that year and 85.6% over ten years. ⁸ Harvey and Liu argue that the Fama-French test has too little power to detect skill, so some managers may have it; ⁹ identifying them in advance is the hard part.

Owning the whole market also matters because stock returns are concentrated. Bessembinder found that just 42.6% of U.S. common stocks since 1926 beat one-month Treasury bills over their lifetimes, and that 4.3% of companies accounted for all of the net wealth creation. ¹⁰ VTSAX and FSKAX both own those few companies by construction. None of this research picks between two total-market index funds. It says to own one cheaply and keep it.

Switching takes longer to pay off than it looks

In a taxable account, selling one fund to buy another is a sale. IRS Publication 550 says “any exchange of shares in one fund for shares in another fund is a taxable exchange,” even within the same fund family. ¹¹ The common shortcut divides the tax by the yearly fee savings: $10,000 of tax against $25 a year is 400 years. That understates the problem, because the tax paid today would otherwise have stayed invested and compounded.

A cleaner test follows both paths to the same date and compares what each leaves after tax. Keeping lets the whole position grow at the higher fee and taxes the full gain when you sell. Switching pays the tax now and grows a smaller balance at the lower fee. If you never sell and leave the shares to heirs, their basis generally resets to the value at death, ¹² so the deferred tax on the kept position is never paid.

Summitward calculation. Switching’s after-tax wealth minus keeping’s. Assumes a 7% annual return before fees for both funds, a 20% combined tax rate on long-term gains (15% federal plus 5% state), and no dividends. Hypothetical; your basis, rates and horizon change every figure.

With half the position in gains, switching never catches up within 100 years, even if you sell everything at the end. With only $5,000 of gain on $100,000, it takes 41 years. Enter your own position in the calculator; the defaults are set for a VTSAX holder considering FSKAX.

When switching does pay

The same arithmetic favors switching when the fee gap is wide. Moving $100,000 into FSKAX, sold at the end, with the same 7% return and 20% tax rate:

Summitward calculation: years until switching leaves more after-tax wealth than keeping. Hypothetical assumptions as in the table above.

Leaving a 0.60% or 1.00% fund for a total-market index fund usually pays within a decade even with large gains. Switching between two index funds a few hundredths of a point apart does not. Three other cases cost little or nothing:

• IRAs and 401(k)s. Sales inside the account are not taxed, so take the lower fee.
• Positions at a loss. Selling realizes a loss you can deduct. Because a wash sale occurs if you buy substantially identical securities “within 30 days before or after the sale,” and the IRS has not said whether two index funds tracking different indexes are substantially identical, treat a VTSAX-to-FSKAX swap as unsettled. ¹¹ Our tax-loss harvesting guide covers partner choices.
• Lots with high basis. If you bought in pieces, sell only the lots with little or no gain and keep the rest.

Ways to own the cheaper fund without selling

• Send new money to FSKAX. Over time the cheaper fund becomes most of the position with no tax.
• Stop reinvesting VTSAX distributions. Take dividends in cash and invest them in FSKAX. The dividends are taxed either way.
• Convert VTSAX to VTI. At Vanguard the conversion is tax-free when both share classes are held there, and runs one way only. ¹³ VTI charges 0.03% and can move to any broker.
• Transfer in kind. Moving brokers does not require selling. Check that the new firm will hold the fund and what it charges to buy more; Fidelity lists a $100 online transaction fee on each VTSAX purchase. ¹⁴
• Give or bequeath appreciated shares. Donating the shares avoids the gain (see donating appreciated stock), and shares held until death receive a stepped-up basis. ¹²

Taxes inside the funds

VTSAX has paid no capital gains distribution in any of the last ten years. ¹⁵ It shares a portfolio with the VTI ETF, and Vanguard explains that ETF redemptions made in kind let a fund remove low-basis shares without selling them. ¹⁶ FSKAX has no ETF class. It paid capital gains in fiscal years 2017 through 2020, from $0.13 to $0.51 a share, and none in the six fiscal years since. ¹⁷ The standardized 10-year after-tax returns differed by 0.03 points a year in VTSAX’s favor. ^{18, 3} That is a small, historical edge, and it applies only in taxable accounts.

Why investors do not switch, and when that is rational

Fee gaps between nearly identical index funds persist. Hortaçsu and Syverson studied S&P 500 index funds and traced the spread in fees to factors outside the portfolio, including search costs and investors who do not shop. ¹⁹ For new money that inertia is costly, and a few minutes of comparison pays. For an appreciated holding in a taxable account, staying put is often the right answer, because the deferred tax is an interest-free loan from the government that a switch repays early.

What we recommend

Frequently asked questions

Is FSKAX better than VTSAX?

FSKAX is cheaper by 0.025 percentage points a year. Their returns have been nearly identical: 15.04% and 15.03% a year over the ten years to June 30, 2026. Buy the one your broker sells without a fee.

Should I sell VTSAX to buy FSKAX?

In an IRA or 401(k), it costs nothing, so you can. In a taxable account with gains, usually not: the tax on the sale outweighs $25 a year of fee savings per $100,000, often for the rest of your life.

Why does FSKAX own more stocks than VTSAX?

The two indexes set different cutoffs for the smallest companies. The extra holdings are micro-caps with very small weights, so they barely change the fund’s returns.

Can I tax-loss harvest between VTSAX and FSKAX?

Many investors do, because the funds track different indexes from different managers. The IRS has not ruled on whether such funds are substantially identical, so the question is unsettled.

Can I hold FSKAX at Vanguard or VTSAX at Fidelity?

Often yes, but buying a competitor’s mutual fund usually costs a transaction fee. Fidelity lists $100 per online VTSAX purchase.

Did Vanguard change VTSAX’s index in 2026?

Only its name. Morningstar bought CRSP and renamed the CRSP US Total Market Index the Morningstar US Total Market Index, with the same methodology. Our guide to the rename has the details.

Key takeaways

• Same market, same results. Ten-year returns 0.01 points apart, and a monthly correlation of 0.99998.
• The fee gap is $25 a year per $100,000. Year-to-year index noise has been six to eight times larger.
• Judge a switch by after-tax wealth. Tax divided by fee savings understates the wait because it ignores growth on the tax dollars.
• Switch freely in IRAs, rarely in taxable accounts. Leaving an expensive fund can pay; trading one cheap index fund for another with large gains does not.
• Get the cheaper fund without selling. Redirect new money and dividends, convert VTSAX to VTI, or transfer in kind.

Related guides

• VTSAX vs FSKAX is the side-by-side comparison of the two funds.
• QQQ vs QQQM applies the same switching question to two Nasdaq-100 funds.
• Zero Fee, Non-Zero Benchmark Risk explains why FZROX’s zero fee comes with a proprietary index and a Fidelity-only fund.
• Tax-Loss Harvesting covers wash sales and replacement funds.
• Morningstar Bought CRSP: Did VTI Change? covers the 2026 index rename.

Sources

1. Morningstar. “Morningstar Completes Rebrand of CRSP Market Indexes to Morningstar Market Indexes.” Business Wire, July 28, 2026. businesswire.com
2. Vanguard Index Funds. Prospectus supplement on the Morningstar index and fund renaming, July 29, 2026 (SEC Form 497). sec.gov
3. Fidelity Total Market Index Fund. Summary prospectus, April 29, 2026. sec.gov
4. Fidelity. Fidelity Total Market Index Fund fact sheet, June 30, 2026. fidelity.com
5. Antti Petajisto. “The Index Premium and Its Hidden Cost for Index Funds.” Journal of Empirical Finance 18(2), 2011, 271-288. ideas.repec.org
6. William F. Sharpe. “The Arithmetic of Active Management.” Financial Analysts Journal 47(1), 1991, 7-9. stanford.edu
7. Eugene F. Fama and Kenneth R. French. “Luck versus Skill in the Cross-Section of Mutual Fund Returns.” Journal of Finance 65(5), 2010, 1915-1947. ideas.repec.org
8. S&P Dow Jones Indices. SPIVA U.S. Scorecard, Year-End 2025. spglobal.com
9. Campbell R. Harvey and Yan Liu. “Luck versus Skill in the Cross Section of Mutual Fund Returns: Reexamining the Evidence.” Journal of Finance 77(3), 2022, 1921-1966. duke.edu
10. Hendrik Bessembinder. “Do Stocks Outperform Treasury Bills?” Journal of Financial Economics 129(3), 2018, 440-457. ideas.repec.org
11. Internal Revenue Service. Publication 550, Investment Income and Expenses. irs.gov
12. 26 U.S.C. 1014, basis of property acquired from a decedent. law.cornell.edu
13. Vanguard. “What is an ETF?” (converting mutual fund shares to ETF shares). vanguard.com
14. Fidelity. Fund research page for VTSAX, transaction fee. Read October 8, 2026. fidelity.com
15. Vanguard Index Funds. Annual report (Form N-CSR) for the year ended December 31, 2025, financial highlights. sec.gov
16. Vanguard. “Mutual funds and ETFs: Understanding capital gains.” October 1, 2026. vanguard.com
17. Fidelity Concord Street Trust. Annual report (Form N-CSR) for the year ended February 28, 2026, financial highlights. sec.gov
18. Vanguard Total Stock Market Index Fund Admiral Shares. Summary prospectus, April 28, 2026. sec.gov
19. Ali Hortaçsu and Chad Syverson. “Product Differentiation, Search Costs, and Competition in the Mutual Fund Industry: A Case Study of S&P 500 Index Funds.” Quarterly Journal of Economics 119(2), 2004, 403-456. ideas.repec.org

Editor’s note

Fund data were checked against Vanguard and Fidelity filings and fact sheets in October 2026. Fees and transaction charges change; confirm them with your broker. This guide is educational and is not tax or investment advice.