Fidelity ETF vs Vanguard, Which Low-Cost Fund Family Wins in 2025?
Quick Answer
Fidelity and Vanguard both offer exceptional low-cost ETF families, but Fidelity wins in 2025 for investors seeking higher growth potential through active management and thematic funds, while Vanguard remains superior for pure index investors who prioritize rock-bottom expenses and a "set and forget" philosophy. The core difference is that Fidelity's active ETFs have consistently outperformed in recent years, with funds like the Fidelity Blue Chip Growth ETF (FBCG) returning 45.5% in 2024, whereas Vanguard's strength lies in its passive index funds that reliably track the market at the lowest possible cost.
- Best for: Growth-oriented investors who want access to top-performing active management and thematic ETFs, particularly in technology and clean energy.
- Key point: Fidelity's average equity ETF expense ratio of 0.14% in 2024 is competitive with Vanguard, but Fidelity offers a broader range of actively managed funds that have delivered superior returns.
- Bottom line: Choose Fidelity if you trust active management and want exposure to high-growth sectors like tech and clean energy; choose Vanguard if you believe in low-cost passive indexing above all else.
The Performance Showdown Fidelity's Active Edge vs. Vanguard's Passive Consistency
The data from 2024 and 2025 paints a clear picture: Fidelity's actively managed ETFs have been on a tear. The Fidelity Blue Chip Growth ETF (FBCG) returned a staggering 45.5% in 2024, while the Fidelity Enhanced Large Cap Value ETF (FELV) delivered 11.48% year-to-date returns in 2024.
These numbers aren't flukes—they reflect a deliberate strategy by Fidelity to deploy active management in a way that captures outsized gains. Vanguard, by contrast, is built on the belief that low-cost passive indexing beats active management over the long term.The Bogleheads' Guide to Investing would argue that paying even a few extra basis points is a mistake, and Vanguard's funds like the VTI (total stock market) or VOO (S&P 500) have expense ratios around 0.03%. But in 2024 and 2025, Fidelity's active funds have made a compelling counterargument.| Fund | Ticker | Category | 2024 Return (YTD as of Nov 30) | Expense Ratio |
|---|---|---|---|---|
| Fidelity Blue Chip Growth ETF | FBCG | Large Growth | 45.5% | 0.39% |
| Fidelity Enhanced Large Cap Value ETF | FELV | Large Value | 11.48% | 0.18% |
| Fidelity Enhanced Large Cap Core ETF | FELC | Large Blend | 8.91% | 0.18% |
| Fidelity Fundamental Large Cap Core ETF | FFLC | Large Blend | 8.96% | 0.38% |
The FELV and FELC funds, with expense ratios of just 0.18%, are nearly as cheap as many Vanguard index funds. This is the sweet spot Fidelity has carved out: active management at index-like prices.
If you'd invested $10,000 in FBCG at the start of 2024, you'd have roughly $14,550 by November—nearly $4,550 more than a Vanguard S&P 500 fund returning 25%. That's not "it depends" territory; that's a massive outperformance that demands attention.The takeaway here is blunt: Fidelity's active ETFs have earned their fees. For investors willing to accept active manager risk, the rewards have been real and substantial.
Expense Ratios The Price War Intensifies
The narrative that Vanguard is the undisputed king of low costs is being challenged. Fidelity's average expense ratio in 2024 was 0.14% for equity ETFs and 0.10% for bond ETFs, according to industry data.
That's nearly identical to Vanguard's averages. The Investment Company Institute's 2024 report confirms that the average expense ratio for index bond ETFs fell to 0.10%, a figure Fidelity matches.But Fidelity has been aggressive in cutting costs. In October 2024, Fidelity slashed the expense ratio on its Active High Yield ETF from 0.45% to 0.35%, renaming it the Fidelity Enhanced High Yield ETF.This move signals that Fidelity is willing to compete on price even for its active products.| ETF Type | Fidelity Average Expense Ratio (2024) | Vanguard Average Expense Ratio (2024) |
|---|---|---|
| Equity ETFs | 0.14% | 0.05% – 0.15% |
| Bond ETFs | 0.10% | 0.04% – 0.12% |
| Active Equity ETFs | 0.18% – 0.50% | N/A (mostly passive) |
The gap is closing. Vanguard still holds a slight edge on ultra-cheap passive funds, but Fidelity's active funds are priced so competitively that the cost difference is often negligible.
For example, the Fidelity Enhanced Large Cap Value ETF (FELV) charges 0.18%, while Vanguard's Value ETF (VTV) charges 0.04%. On a $10,000 investment, that's $14 per year difference—hardly a deciding factor when FELV returned 11.48% vs.VTV's approximate 8-10% range. The real question is no longer "which is cheaper?" but "which delivers better net returns after fees?" Fidelity's active funds have won that battle recently, and the cost disadvantage is shrinking.If you're a reader of The Little Book of Common Sense Investing, you'd argue that costs are the only thing that matters—but the data shows that paying 0.18% for a fund that outperforms by 2-3% annually is a net win.Sustainability and Thematic Investing Fidelity's Clean Energy Bet
When it comes to thematic ETFs, Fidelity has shown a willingness to take bold bets that Vanguard largely avoids. The standout here is the Fidelity Clean Energy Fund (FRNW), which returned a blistering 52.58% in 2025, making it the top-performing Fidelity ETF that year.
This isn't a one-off fluke; it reflects Fidelity's strategy of offering targeted thematic funds that capture specific market trends. Vanguard, true to its indexing philosophy, doesn't offer thematic funds in the same way.Their approach is to offer broad, diversified sector funds (like VGT for technology) rather than narrow plays on clean energy or artificial intelligence. This is both a strength and a weakness.Vanguard's approach ensures you never get left behind by a sector that falls out of favor, but it also means you miss out on explosive gains like FRNW's 52.58%.| Fund | Ticker | Theme | 2025 Return | Expense Ratio |
|---|---|---|---|---|
| Fidelity Clean Energy Fund | FRNW | Clean Energy | 52.58% | 0.39% |
| Fidelity Blue Chip Growth ETF | FBCG | Large Cap Growth | 45.5% (2024) | 0.39% |
| Fidelity Total Bond ETF | FBND | Active Fixed Income | Not specified | 0.36% |
For investors who believe in specific long-term themes like clean energy, artificial intelligence, or demography, Fidelity offers a compelling toolkit. However, a word of caution: thematic funds are inherently riskier.
FRNW's massive 2025 gain could reverse in a different market environment. The Bogleheads' Guide to Investing would caution against chasing sector bets, but for those who have conviction, Fidelity provides the vehicle.The key decision point is simple: do you want to own the entire market and sleep well, or do you want to place strategic bets on the future? Fidelity gives you the second option; Vanguard gives you the first.The Technology Factor Fidelity's Ace in the Hole
Technology has been the dominant sector driving market returns, and Fidelity's funds are heavily weighted in this area. The Fidelity Blue Chip Growth ETF (FBCG) has a concentrated portfolio, with the top 10 holdings accounting for 54.2% of assets and a 43.7% allocation to technology.
This concentration has been a massive tailwind in 2024 and 2025, as tech giants like Nvidia, Microsoft, and Apple have surged. Vanguard's technology fund (VGT) also performed well, but it lacks the active tweaking that FBCG's managers can apply.When you buy FBCG, you're paying 0.39% for a team that actively selects stocks within the large-cap growth universe. In 2024, that selection process led to a 45.5% return—nearly double what many broad market funds returned.| Fund | Ticker | Tech Allocation | Top 10 Holdings Concentration | Expense Ratio |
|---|---|---|---|---|
| Fidelity Blue Chip Growth ETF | FBCG | 43.7% | 54.2% | 0.39% |
| Vanguard Information Technology ETF | VGT | 100% (sector fund) | ~55% | 0.10% |
The trade-off is clear: FBCG offers active management with higher concentration and higher fees, while VGT offers pure sector exposure at a lower cost. The data shows that in 2024, FBCG's active approach paid off handsomely.
But past performance is not guaranteed, and FBCG's concentrated bets could backfire if tech falls out of favor. The decision here comes down to your risk tolerance.If you believe technology will continue to be the primary driver of market returns and you trust Fidelity's active managers, FBCG is a strong choice. If you prefer a low-cost, diversified approach to tech exposure, stick with VGT.International Exposure Fidelity's Multifactor Approach
Fidelity offers international ETFs that use factor-based strategies to enhance returns, a feature Vanguard generally avoids. The Fidelity Targeted International Multifactor ETF (not ticker-specified in the data but described) tracks an index designed to reflect large- and mid-cap international stocks with lower volatility.
With an expense ratio of 0.19%, a PE ratio of 17.53, and a yield of 2.86%, it's a compelling option for investors seeking international diversification. Vanguard's international funds, like VXUS, are purely passive and charge around 0.07%.But VXUS has a PE ratio closer to 14 and a yield around 3.5%, meaning you're getting cheaper valuations and higher income at a lower cost. However, Fidelity's factor-based approach aims to reduce downside risk, which could be valuable in volatile international markets.| Fund | Ticker | Strategy | Expense Ratio | PE Ratio | Yield |
|---|---|---|---|---|---|
| Fidelity Targeted International Multifactor ETF | Not specified | Multifactor (low volatility) | 0.19% | 17.53 | 2.86% |
| Vanguard Total International Stock ETF | VXUS | Passive total market | 0.07% | ~14 | ~3.5% |
The choice here isn't about cost—it's about philosophy. If you believe factor investing (low volatility, value, quality) can enhance returns in international markets, Fidelity's fund is worth the extra 0.12% in fees.
If you believe in total market exposure at the lowest possible cost, Vanguard wins. For most investors, the Vanguard approach is simpler and cheaper.But for sophisticated investors who want to tilt their international allocation toward lower-volatility stocks, Fidelity's offering is a thoughtful alternative.Frequently Asked Questions
Which has lower fees overall, Fidelity or Vanguard?
Vanguard has a slight edge on ultra-cheap passive index funds, with many charging 0.03% to 0.07%. However, Fidelity's average equity ETF expense ratio was 0.14% in 2024, and bond ETFs averaged 0.10%.
For active funds, Fidelity's 0.18% to 0.39% range is far cheaper than most active managers, and the gap with Vanguard's passive funds is narrowing. The difference of a few basis points is unlikely to be the deciding factor in your investment returns.Is Fidelity's active management worth the higher cost?
Based on 2024 and 2025 data, yes—Fidelity's active ETFs have significantly outperformed. The Fidelity Blue Chip Growth ETF (FBCG) returned 45.5% in 2024, and the Clean Energy Fund (FRNW) returned 52.58% in 2025.
However, active management carries risk, and past outperformance doesn't guarantee future results. For investors who prefer a hands-off, low-cost approach, Vanguard's passive funds remain a solid choice.Can I buy Fidelity ETFs in a Vanguard brokerage account?
Yes, you can buy Fidelity ETFs in any brokerage account, including Vanguard's. Both Fidelity and Vanguard offer commission-free trading for their own ETFs, but you may incur fees when buying the other family's funds.
For example, buying Fidelity ETFs in a Vanguard account may result in a $20 to $50 commission. Consider opening a Fidelity account if you want to invest heavily in Fidelity ETFs.What is the best Fidelity ETF for beginners?
For beginners, the Fidelity Total Bond ETF (FBND) or the Fidelity Enhanced Large Cap Core ETF (FELC) are good starting points. FBND offers diversified bond exposure with active management, while FELC provides large-cap core exposure at a low 0.18% expense ratio.
These funds balance simplicity, cost, and performance.Does Fidelity offer ESG or sustainable investing ETFs?
Yes, Fidelity offers sustainable and ESG-focused ETFs. The Morningstar data shows that Fidelity funds have ESG Risk Ratings available, and the Fidelity Clean Energy Fund (FRNW) is a thematic sustainable fund.
However, Fidelity's ESG lineup is less extensive than Vanguard's or BlackRock's. Check the Fidelity ETF screener for the latest offerings.Fact-check References
This article draws on publicly available reporting and official data. The links below are factual references only — not the source of wording or editorial opinion.
- https://www.etftrends.com/etf-investing-content-hub/3-top-performing-fidelity-et... — checked 2026-06-05
- https://finance.yahoo.com/news/fidelity-top-9-etfs-put-143402940.html — checked 2026-06-05
- https://institutional.fidelity.com/advisors/investment-solutions/performance/fid... — checked 2026-06-05
- https://www.ici.org/files/2025/per31-01.pdf — checked 2026-06-05
- https://www.etftrends.com/etf-investing-content-hub/fidelity-slashes-price-activ... — checked 2026-06-05
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