FZILX vs VXUS: Best Low-Cost International Index Fund in 2026?

Both funds cover developed and emerging markets outside the U.S. FZILX (Fidelity ZERO International Index Fund, launched 2018) tracks the Fidelity Global ex U.S. Index and holds about 2,200 large and mid-cap stocks. VXUS (Vanguard Total International Stock ETF) tracks the FTSE Global All Cap ex US Index, adding thousands of smaller companies. By weight, large caps dominate both, so the portfolios behave similarly.

Over the five years ending September 2026, FZILX returned 9.97% a year and VXUS 9.37%, with similar volatility (15.6% vs 15.2%). Their dividend yields are nearly identical at about 2.3%. FZILX pays its distribution once a year in December; VXUS pays quarterly.

International funds pay foreign taxes on their dividends, and in a taxable account you may be able to claim the foreign tax credit, so many investors hold international funds in taxable accounts and bonds in tax-advantaged ones. If that is your plan, an ETF like VXUS keeps you portable. Inside a Fidelity IRA, FZILX's zero fee is hard to beat.

Building a zero-fee portfolio at Fidelity? Pair FZILX with FZROX. Investing elsewhere, or want small-cap international exposure and an ETF you can move? VXUS, usually paired with VTI. The 0.05% difference matters far less than simply holding some international stocks consistently.