Top 5 Fidelity Mutual Funds | Best Fidelity Funds
Investing can be tough and confusing at-times and one may require to dedicate lot of time and energy for their research. In order to simplify this process one can opt to invest in broad market and there invest in index fund. Today in this article, we will cover 5 Best Fidelity Funds you should consider investing your money.
Table of Contents
Understanding the Fund selection
We have selected 3 funds that will diversify your money into 3 broad sectors, A) Bond Fund B) Equity Fund C) International Equity Fund.
Bond Fund
A bond fund will invest your money into debt instruments, which are considered safe options and will give your portfolio stable returns and reduce overall risk.
One should invest their emergency fund in these bond funds.
Equity Fund
An equity fund is a fund which invests their money in shares of various companies.
This will help your money to be invested into broad market and help you generate good returns.
International Equity Fund
An international fund will help you to diversify your money into international stock market, which might give your better returns by investing into emerging market.
This will help to hedge against turbulence in domestic economy.
This diversification will not only protect your money, but also will exponentially grow your money with the help of equity and caters to different market conditions
1) Fidelity U.S. Bond Index Fund (FXNAX)
The first fund recommended is the Fidelity U.S. Bond Index Fund (FXNAX). This fund is tracking the Bloomberg Barclays U.S. Aggregate Bond Index which includes a variety of investment grade Government bonds, corporate bonds, and mortgage-backed securities. This fund includes around 8,430 Bonds in its portfolio. This fund helps to bring stability in your investment portfolio which invests it majority of funds in US Treasury and mortgage giants like Fannie Mae and Freddie Mac, contribute to its robust performance.
| Key Information | Value |
| Expense Ratio | 0.03% |
| Inception Date | 1990 |
| Average Annual Total Returns | 5.33% |
Investing in bonds and fixed income instruments is very important in market turbulence as bonds act as a cushion and bring stability with predictable returns in a volatility market condition
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2) Fidelity Total Market Index Fund (FSKAX)
A pioneer and most popular fund in Fidelity lineup is Section 5: Fidelity Total Market Index Fund (FSKAX). This fund tracks Dow Jones US. This fund represents approximately 4,000 US based companies, which means your money will be diversified into approximately 4,000 companies. We would recommend this fund as a robust option to grow your money in long term.
| Key Information | Value |
| Expense Ratio | 0.015% |
| Inception Date | 1997 |
| Average Annual Total Returns | 8.29% |
3) Fidelity Zero Total Market Index Fund
Selection For investors who are interested in a zero cost equity solution, they can look into Fidelity Zero Total Market Index Fund (FZROX) as a worthy option. With an expense ratio of just 0%, FZROX tracks Fidelity’s in-house U.S. Total Investable Market Index, representing approximately 2,661 U.S.-based companies.
| Key Information | Value |
| Expense Ratio | 0.00% |
| Inception Date | 2018 |
| Average Annual Total Returns | 11.82% |
The downside of this fund is that, it excludes smaller companies from its index which has a minimal impact on its performance. Second, transferring shares to another firm incurs a tax consequence. While the zero-expense ratio is attractive, investors must be aware of the strings attached.
4) Fidelity Total International Index Fund
For investors who are looking to invest their funds in overseas market, Fidelity Total International Index Fund (FTIHX) is the fund they should look into. This fund captures the essence of global diversification which tracks MSCI All countries World Index excluding United States. This fund helps its investors to get exposed to approximately 5,042 international companies. It is important to have international exposure in your portfolio to avoid any domestic specific market turbulence.
| Key Information | Value |
| Expense Ratio | 0.06% |
| Inception Date | 2016 |
| Average Annual Total Returns | 5.99% |
This fund’s holdings include global giants like Taiwan Semiconductor, Nestle, and ASML holdings. Its role extends beyond borders, providing investors with diversification across countries, sectors, and currencies.
5) Fidelity 500 Index Fund
If an investor wants to track 500 Largest publicly traded companies in the United States, then he can choose to invest in Fidelity 500 Index Fund. This fund invests his funds in S&P 500 Index which tracks broad US Equity market. This fund has only 0.015% as its expense ratio with 10.66% as historical return.
| Key Information | Value |
| Expense Ratio | 0.02% |
| Inception Date | 1988 |
| Average Annual Total Returns | 10.66% |
This fund was launched back in 1988 and Fidelity 500 Index Fund holds a special place in the investment landscape. Its ability to mirror the performance of the US Stock market is the highlight that attracts investors.
Conclusion
If one wants to track broad market with long term investment vision in most cost efficient way, achieve diversification and keep investing simplified then he should invest in index funds.
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