SPAXX: Unlock 3 Cash Management Choices Available to Fidelity Customers

Wondering what the SPAXX position in your Fidelity account is? Or maybe your wondering what other cash management options Fidelity offers, either way you’re in the right place

Updated February 2024
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Fact checked by Cathy Gresham
Person considering their investment options
Note: nothing in this article or anywhere on personalfinanceguru.com is investment advice. The information contained herein is not intended to be investment advice, it’s for educational and informational purposes only and should not be construed as professional financial advice. Financial product information changes rapidly, we recommend checking the rates on third-party sites to confirm the most up-to-date information. The performance represented is historical; past performance is not a reliable indicator of future results and investors may not recover the full amount invested. We are not financial advisors and we recommend you consult with a financial professional before making any financial decisions. If you need professional financial advice, consult a licensed financial or tax advisor, which we are not.

SPAXX executive summary

  • SPAXX is a money market fund operated by Fidelity.
  • It primarily invests in ultra-safe investments like short-duration government back securities.
  • It’s been around since 1990 and has only broken even with inflation on average since that time. (Average return over the life of 2.54% vs. average inflation since 1990 os 2.52%, at time of writing).
  • SPAXX is one of a couple of options Fidelity offers as one option to use as a cash core position.
  • You can change what security is used as your cash management core position, but not every option is available for every type of account.
  • While this is considered an extremely safe investment, it is not FDIC-insured, like some of Fidelity’s other cash-management options. You can technically lose this investment, though we think that’s extremely unlikely. The FDIC and FCASH. The FDIC-insured option still earns a small return, but it is generally less than the money market options.
  • Other core position cash management options include:
  1. FDRXX
  2. FCASH
  3. FDIC
  4. FZFXX

SPAXX: what exactly is it?

SPAXX, otherwise known as the Fidelity Government Money Market Fund is a taxable money market fund operated by Fidelity as one of a few options its clients can use to manage the cash in their accounts. 

Each Fidelity account needs to have a ‘core position,’ which is the position Fidelity uses to “process cash transactions and to hold uninvested cash.”

There’s no transaction fee for buying and selling into or out of this core position, however, SPAXX does have an expense ratio of 0.42%. Unlike certain other money management funds at Fidelity, SPAXX has no minimum investment required

It’s a large fund that appears to be popular with Fidelity clients, with an AUM of ~$250B at writing.

Its holdings are extremely conservative, mostly short-duration government repurchase agreements as well as some treasuries. This is consistent with the objective SPAXX states in its prospectus to “seek current income consistent with preservation of capital and liquidity.”

It appears to be offered in most Fidelity accounts, including retirement accounts, but Fidelity does not publish the specifics of which cash management option is allowed by account type.

SPAXX: historically, performance has roughly broken even with inflation

SPAXX’s annualized historical performance is a bit disappointing at 2.54%. Although to be fair, this is consistent with its mission of capital preservation and liquidity. We would caution investors to remember that this is NOT 2.54% above inflation, so when thinking in real dollars investors are likely to break even. So, while this is a good cash management option, it’s not suitable for long-term investment.

As expected, the return in the decade or so since the financial crisis was nearly zero but has been increasing along with interest rates in 2022-23.

SPAXX performance chart

How does SPAXX’s return compare to other Fidelity cash management options?

We looked at Fidelity’s 3 main core cash management options performance since inception vs. inflation over the same time period and found the following results:

  • SPAXX: return essentially breaking even with inflation.
  • FZFXX: return of about ~0.5% over inflation.
  • FDRXX: return of about ~1% over inflation.

All of these returns are acceptable to us, since these funds are designed to be ‘cash equivalents,’ and only earn what small premium they can get while still being 100% laser-focused on still preserving capital. So they only invest in short-term US government securities, which is about as close to risk-free as you can get.

SPAXX composition

Focus on: what other cash management options does Fidelity offer?

They offer a dizzying array of 31 money market options (see the chart below for the full list).

It’s made more confusing by the fact that not all options are available in every account type. Additionally, most of these funds are not available to use as your Fidelity account’s core cash position. But you could manually invest (and liquidate) in them, if so chose, thereby using them as your cash management fund. What’s more, some of these funds have additional restrictions, like a minimum investment of $100K. Certain funds are only offered in taxable accounts, while others are only offered in retirement accounts. It’s a lot to try to sort through.

All that said, the main options to use as a core position seem to be FDRXX, SPAXX, and FZFXX (apart from the non-invested options described above of FDIC and FCASH). While a full comparison of these three is beyond the scope of this article, they are all very similar.

Note: we couldn’t squeeze the following 3 into the list below:

  • Fidelity® New York Municipal Money Market Fund (FAWXX)
  • Fidelity® New York Municipal Money Market Fund – Premium Class (FSNXX)
  • Fidelity® New York Municipal Money Market Fund – Institutional Class (FNKXX)
Fidelity money market fund list

SPAXX: basic stats

SPAXX only holds investments for an average of 62 days and which makes sense since its weighted average time to maturity is only 8 days.

It has been around for over 30 years and has over $200B under management. 

SPAXX basic stats
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Final thought: will we use SPAXX?

SPAXX is a great option and we do in fact use it as our core position in one of our Fidelity accounts.

Editor's Note:

At Personal Finance Guru, we want to help you maximize your lifestyle through personal finance. You can trust the integrity of our independent financial advice. Our opinions our own and have not been provided, reviewed, approved, or endorsed by any advertiser or financial product provider. To support and grow the site, however, we may receive compensation from the issuers of some products. Visuals and analysis courtesy of Portfolio Visualizer.

Author bio:

Cody Beecham

Cody Beecham

Founder/Owner/Editor/Author

Cody is the founder and owner of Personal Finance Guru. His day job is as a management consultant at one of the Top 3 firms (think Mckinsey, Bain), where he advises Fortune 500 C-suite clients on their most important and pressing business problems. He completed his business education at Harvard Business School. 

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