Are you in your 20s or 30s? Are you in your 30s or 40s? Are you in your 40s or 50s? Are you in your 60s or 70s? Are you in your 70s or 80s? If you are, chances are you have a lot on your mind. You need to think about retirement, and figuring out how to save for your retirement is a daunting task. However, there is a solution – investing – and it starts with a mutual fund.
You are probably aware that investing in the stock market is risky. Most people are very careful not to lose too much money during the course of their lifetime. But let’s say that you are an average person who is still under 30 years old. If you are completely new to investing, you may not know what you are doing. On the other hand, if you have been investing for a few years, you may feel confident you can do it on your own.
Fidelity is one of the world’s largest investment companies, with both personal and institutional assets. The firm manages over $1.3 trillion in assets, and its mutual funds provide investment choices for all stages of life.
This guide will help you choose the right Fidelity mutual fund for you, whether you’re looking to retire or grow money.
I’ll discuss some of my favorite Fidelity mutual funds for seniors, young people, and those seeking to beat inflation and withstand the next downturn.
I’ll also go through the differences between Fidelity and Vanguard investing, as well as how to choose between index funds and actively managed funds.
Fatfire woman’s picks for the greatest fidelity mutual funds
Overview of Fidelity Investments
Fidelity Investments was founded in 1946 by Edward Johnson. Fidelity Investments is still flourishing and managing billions of dollars after more than 75 years.
Edward Johnson is from Boston, and he’s a true New Englander, complete with a waspish name like Edward Johnson.
The Johnson family is descended from Puritans, early immigrants who came to Martha’s Vineyard to work hard and afterwards vacation since the Church of England was not pure enough for them.
Johnson, like all good (and white) New Englanders, attended Harvard. And he attended there twice: first as an undergraduate and again as a law student.
It’s essential to understand Fidelity’s ownership structure and how it affects your net worth before deciding whether or not to invest with them.
Fidelity’s current CEO, Abigail Johnson, is the granddaughter of the company’s founder.
A (Very Profitable) Family Business is Fidelity.
Fidelity is a private business owned by a single family.
When Edward Johnson resigned, he handed the reins to his son, who in turn passed them on to Abigail Johnson, Fidelity’s current CEO.
The Johnson family controls 49 percent of Fidelity’s common stock (workers hold the remainder) and the majority of the company’s voting stock, and they vote together.
This implies that the Johnsons have complete control of Fidelity. While the Johnson family has done an excellent job operating Fidelity, let’s be clear: Fidelity exists to serve the Johnson family’s interests.
Every business exists to serve its owners. The stockholders of a public business are protected. Vanguard safeguards mutual funds since its shareholders are mutual fund investors.
Fidelity is loyal to its ruling family, the Johnsons.
And the company’s ownership structure determines how much and where it makes money.
Profit Sharing and Ownership
Compare and contrast the ways Vanguard, Charles Schwab is a hedge fund manager., and Fidelity earn money.
The assets, revenue, and profit generated by each business are shown in the table below:
|Managed Assets||$7,100 billion dollars||$4,900 billion dollars||$296 billion dollars|
|Revenue||6.94 billion dollars||18 billion dollars||ten billion dollars|
|Earnings per $1000 Asset Managed||$0.98||$3.67||$33.73|
|Profitability Margin ( percent )||3.21%||38.33%||33.29%|
What do you think you’ve noticed? Vanguard is by far the largest asset manager, with more than $7.1 trillion in assets under management, almost twice as much as Fidelity.
Vanguard, on the other hand, does not generate nearly as much income or profit as Fidelity or Charles Schwab.
Vanguard earns less than a dollar ($0.98) for every $1,000 in assets handled, whereas Fidelity earns $3.67.
Vanguard’s profit margin is virtually nothing, while Fidelity’s profit margin is a staggering $38 percent.
Given Vanguard’s ownership structure, this is not unexpected. Vanguard, as a mutual fund business, strives to operate at a low cost so that it can pass on all of the advantages to its shareholders, the mutual fund holders, in the form of reduced fees.
Vanguard is not obligated to generate money for its owner.
Fidelity, on the other hand, earns almost $7 billion in profit each year. Why? Because it is a family-owned company looking to expand.
What is the source of the profit? From customers like you.
This implies that you must use caution while dealing with Fidelity. Fidelity does not always look out for its customers — at a cost of $7 billion each year, Fidelity tries to maximize profits for the Johnson family.
This makes choosing a mutual fund at Fidelity even more essential since you don’t want to wind up with a mutual fund that doesn’t help you but instead costs you a lot of money in fees.
Low fees are seen in the top Fidelity mutual funds.
Which Fidelity mutual funds should I stay away from? And which ones should I purchase? Now I’ll tell you.
Mutual Funds with the Highest Fidelity
Fidelity has historically exclusively offered actively managed funds with a hefty dose of fees (thus its $7 billion profit).
However, in recent years, Fidelity has begun to provide index funds as a result of its customers’ migration to Vanguard.
Fidelity also has a few of excellent index products to consider. I believe its index funds outperform its well-known actively managed funds.
Here are some of my personal favorites:
The Fidelity 500 Investing in an Investing in an Investing in an Investing in an Index Fund is a mutual fund that invests in the S& (FXIAX) is the best index fund for the lazy and wealthy.
The S&P 500 index fund is a growth fund for rich people because it tracks the stocks of the largest 500 public companies in the U.S.
As a result, it’s reasonably safe while yet being growth-oriented.
The S&P 500 has done really well in the past 10 years thanks to the big technology companies such as Apple, Microsoft, Amazon, Google, and Netflix.
Blue-chip businesses are included in this index fund, and affluent individuals like blue-chip equities since they are less volatile and riskier.
Warren Buffett put all of his inheritance to his wife into the S&P 500 index fund. If the S&P 500 is good enough to take care of Warren Buffett’s wife, it’s good enough for any rich person.
Fidelity’s index fund for the S&P 500 is FXIAX. This fund is nearly identical, down to the symbol, to the iconic Vanguard 500 Index Fund VFIAX.
Fidelity developed the FXIAX, predictably, to prevent its clients from switching to Vanguard.
And to Fidelity’s credit, it really went above and beyond to make the FXIAX fund the most attractive S&P 500 index fund on the market today:
- FXIAX has no investment minimums, while Vanguard’s VFIAX has a $3K minimum.
- At 0.015 percent, FXIAX has the lowest management fee on the market, even lower than Vanguard VFIAX’s rock-bottom cost of 0.04 percent.
Fidelity’s S&P 500 index fund has the same performance as any other S&P 500 index fund, and this index fund has performed well lately.
So if you’re in the market to buy an S&P 500 index fund, Fidelity’s is my #1 recommendation.
S&P 500 vs. Fidelity Fund vs. Magellan Fund
What’s more? The S&P 500 beats two of Fidelity’s most famous actively managed funds at Fidelity: the Fidelity Fund and the Fidelity Magellan Fund is a mutual fund managed by Fidelity Investments..
See this comparison table of the S&P 500 vs. Fidelity Fund vs. Magellan Fund (you may need to scroll on phone to see everything).
|Fidelity 500 Index Fund (FXIAX)||Fidelity Fund is a mutual fund that invests in stocks and bonds (FFIDX)||Fidelity Magellan Fund|
|Fund Type||Index Fund||Fund that is actively managed||Fund that is actively managed|
|Created for the first time||2011||1930||1963|
|Allocation||Stocks in their entirety||Stocks in their entirety||Stocks in their entirety|
|Description||S&P 500 companies, top 10 accounts for 27%||The top ten stocks, including growth and value, account for 43% of the top 100 stocks.||90 companies, a third in technology, no energy, and the top ten stocks account for 32% of the market.|
|Ratio of Expenses||0.015%||0.48%||0.77%|
|Return during a ten-year period (2011-2021)||13.90%||13.15%||12.95%|
|Return on Investment Over a Year (2020-2021)||56.34%||51.30%||49.27%|
The Fidelity Fund (FFIDX) was Fidelity’s inaugural fund. It began in the 1930s and continues to this day.
The fund only has 110 holdings and concentrates on large-cap equities, with 40% of its holdings in the top ten firms. As a result, it’s a large-cap fund.
But this fund’s 10-year performance is just slightly worse than the S&P 500. Sure, there may have been periods of time when the Fidelity fund beats the S&P 500 index fund, but it is unclear whether this fund is superior in the long-term, especially if you take into account taxes and fees.
The Fidelity Magellan Fund (FMAGX) is another famous fund with more than 50 years of history. It was managed by a famous mutual fund manager, Peter Lynch, who, between 1977 and 1990, produced growth that doubled the S&P 500 market index, making the Magellan Fund the world’s best-performing mutual fund.
But that’s no longer the case today. Since 2011, the Magellan fund has performed somewhat similarly to the S&P 500.
I hope you now see the power of the S&P 500 and why Fidelity has no choice but to offer it. S&P 500 is the simplest way to invest, and it’s beating out two of the most iconic, actively managed funds at Fidelity!
Next, we’ll look at another well-known index fund and why Fidelity’s version is an excellent option to consider.
The Only Index Fund You Need Is Fidelity Total Market Index Fund is a mutual fund that invests in the stock market (FSKAX).
Investing may be as simple as A, B, and C. JL Collins suggests a one-fund portfolio, using the Total U.S. Market index fund as the one-fund.
That’s right: put 88 percent of your net worth into the Total US Stock Market while keeping the remaining 12 percent in cash and an emergency fund.
For this purpose, Fidelity has created the Fidelity Total Market Index Fund (FSKAX):
|Fund Name||Fidelity Total Market Index Fund (FSKAX)|
|Fund Type||Index Fund|
|Created for the first time||1997|
|Allocation||Stocks in their entirety|
|Description||Tracks the whole stock market in the United States.|
|Ratio of Expenses||0.015%|
|Return during a ten-year period (2011-2021)||13.76%|
|Return on Investment Over a Year (2020-2021)||62.68%|
Fidelity launched FSKAX to fight against Vanguard’s similarly famous Total Stock Market Index Fund, VTSAX, for the second time.
Fidelity’s FSKAX also offers a lower management fee (0.015 percent vs. 0.04 percent) and no investment minimum ($0 vs. $3,000) than Vanguard.
But there’s more!
ZERO Fidelity Funds
Fidelity introduced a new index fund in 2018 called Fidelity ZERO Total Market Index Fund for money in a brokerage account (that is, money that isn’t in a retirement account) (FZROX).
This new index fund (FZROX), which is exclusively accessible via inside brokerage accounts, is identical to FSKAX (Total US Stock Market), with the exception that FZROX has no management costs, while FSKAX charges 0.015 percent.
While 0.015 percent is already so low that a $1 million investment costs just $150 per year, zero is still $0, which is quite remarkable.
You may wonder how Fidelity manages to avoid charging fees. Fidelity is almost certainly losing money on this investment.
However, it is hoped that those who come to Fidelity for zero-fee index funds would also purchase additional services and more costly mutual funds, resulting in Fidelity earning more money overall rather than losing clients to Vanguard.
FZROX does not charge any fees to monitor the stock market in the United States.
You, on the other hand, know better. Take advantage of Fidelity’s no-fee index funds and avoid purchasing anything else you shouldn’t.
For the Young and Ambitious, the Best Fidelity Mutual Funds
For any young individual wanting to take some chances, I usually suggest a modest investment in small-cap value companies.
I go through small-cap value funds in more detail in my Best Vanguard Funds article.
We witnessed how the epidemic wreaked havoc on small-cap value funds, with shares plummeting by more than 40%.
However, small-cap value has recovered the fastest since then, increasing by almost 100% in 2021 alone.
Consider small-cap value if you are young and ambitious, want to invest in riskier businesses, and have a lengthy investing horizon.
The Fidelity Small Cap Value Index Fund is a mutual fund that invests in small companies (FISVX) is a high-risk long-term investment fund.
Fidelity’s small-cap value index fund, FISVX, is a rival to Vanguard’s small-cap value funds, about which I previously wrote.
This is Fidelity’s only index fund that is both small-cap and value.
The cost on FISVX is just 0.05 percent, and there are no minimums.
|Fund Name||Fidelity Small Cap Value Index Fund (FISVX)|
|Fund Type||Index Fund|
|Created for the first time||2019|
|Allocation||Stocks in their entirety|
|Description||The Russell 2000 Value Index is followed.|
|Ratio of Expenses||0.05%|
|Return on Investment Over a Year (2020-2021)||96.89%|
The FISVX has approximately 1,500 equities in its portfolio, with the top ten holdings accounting for less than 6% of the total.
Investing in small-cap value funds should be done with caution. These stocks have a high level of volatility.
Small-cap value stocks should not make up the bulk of your portfolio. However, there are instances when it may be wise to buy in small-cap value, particularly after it has plummeted in value!
For Those Who Believe Software Is Eating the World, Fidelity Nasdaq Composite Index Fund is a mutual fund that invests in the Nasdaq stock market (FNCMX)
If you think that robots will take over and that technology will change our world in ways we can’t even fathom now, you should consider investing in Nasdaq.
Some individuals choose to invest in the Nasdaq 100 rather than the whole Nasdaq stock market. The Nasdaq 100 is an index that monitors the 100 biggest non-financial firms on the Nasdaq stock exchange.
The Nasdaq 100 is only tracked by one Fidelity ETF, which is QQQ.
In the past decade, QQQ has essentially been the best-performing index fund. Why? Because technology stocks such as Apple, Microsoft, Amazon, Tesla, Google, Facebook, NVIDIA, and others have outperformed the market over the past decade.
So why don’t I suggest the QQQ? Because I believe it is too hot. For the last ten years, the index has risen by an average of 20% each year.
For the first time in 2021, the entire Nasdaq index outperformed the Nasdaq-100.
I believe that big tech will continue to rule, but their innovation is currently sluggish, and their culture is more corporate than dynamic. I believe in technology, and I believe that the next wave of innovation will emerge from sources other than big tech.
For individuals who prefer to take chances and invest in the technology industry, I suggest the Fidelity Nasdaq Composite Index Fund.
|Fund Name||Fidelity Nasdaq Composite Index Fund (FNCMX)|
|Fund Type||Index Fund|
|Created for the first time||2003|
|Allocation||Stocks in their entirety|
|Description||The Nasdaq index is followed.|
|Ratio of Expenses||0.29%|
|Return during a ten-year period (2011-2021)||18.02%|
|Return on Investment Over a Year (2020-2021)||73.22%|
Again, a word of caution: never put all of your money into a single business or area, even if you think it will consume the whole globe.
I work in technology and believe in it, but it is also inherently unpredictable and harsh. The tech bubble will collapse, as I predicted in my “dot-com bubble” advice, and you should diversify your risks.
Retirees’ Favorite Fidelity Mutual Funds
You desire less danger and greater protection if you are approaching retirement, have retired, or wish to retire early.
You’ve undoubtedly amassed enough money that you’re more concerned with preserving it than with substantially increasing it.
Fidelity suggests the following allocation, which I believe is excessively cautious and too dependent on the bond market, which has failed to provide any returns in our present zero-interest-rate environment.
distribution of fidelity mutual funds at its finest
Normally, I would suggest a Fund that is well-balanced like Vanguard’s 60/40 VBIAX. However, none of Fidelity’s balanced funds are very impressive.
Fidelity offers a Four-in-One Fund that invests almost 85% of its assets in stocks and has a 0.11 percent cost ratio, but its performance isn’t great.
Similarly, the Fidelity Balanced Fund (FBLAX) has almost 72 percent equity and a decent but not exceptional track record. It also has a 0.52 percent charge attached to it.
Last but not least, Fidelity offers a fund that has been actively managed for over 70 years. It’s called the Fidelity Puritan Fund (FPURX), and it invests about 70% in equities and 30% in bonds.
The Puritan Fund is a well-known institution. However, for the reasons I’ll describe below, I don’t believe it’s worth investing in since its performance hasn’t been much superior to that of basic, stupid index funds.
Furthermore, since all three funds listed above are frequently traded, you will pay higher capital gains taxes.
So, what should you do if you require a Fidelity balanced fund?
Make Your Own Balanced Fidelity Fund
If you want a fund that includes both stocks and bonds since you can’t afford to put everything in stocks as a retiree, you may transfer your money to Vanguard and invest in VBIAX or Vanguard Wellington.
I suggest purchasing 60% Fidelity Total Market Index Fund (FSKAX) and 40% Fidelity U.S. Bond Index Fund if you wish to keep your money in Fidelity (FXNAX).
If 60/40 isn’t for you, try a stock/bond mix that is more appropriate.
This is why.
If I invest 72 percent of my money in the Fidelity Total Market index fund and 28 percent in the Fidelity U.S. Bond index fund, my 10-year growth rate will be somewhat higher than the Fidelity Balanced Fund or Fidelity Four-in-One, as indicated in the table below.
Similarly, investing 70/30 in two simple, stupid index funds yields a greater return than investing in the Fidelity Puritan, which has a considerably higher cost ratio and turnover rate (higher taxes).
Overall, I don’t believe expensive Fidelity mutual funds are worthwhile investments.
(To compare, you may need to scroll on your phone.)
|Balanced Fund||Four-in-One||Puritan||Total Stock: 72 percent The total bond is 28 percent.||70% of the total stock Total Bond 30 percent|
|Symbol of the Fund||FBALX||FFNOX||FPURX||FXNAX, FSKAX||FXNAX, FSKAX|
|Ratio of Expenses||0.52%||0.11%||0.52%||0.018%||0.018%|
|Growth during a 10-year period||10.85%||10.20%||10.47%||10.90%||10.68%|
As you can see, Fidelity is charging you more fees for no improved outcomes in order for the owners to earn more money.
Please only use Fidelity’s finest index funds and mix them together manually to create your ideal retirement plan.
But I couldn’t wrap off this article without providing an in-depth look at Fidelity’s actively managed mutual funds, which have been doing well recently…
Fidelity Actively Managed Mutual Fund with the Best Growth + Yolo Potential
Actively managed funds set Fidelity apart and generate returns.
Thousands of actively managed mutual funds are available via Fidelity, the most of which are terrible. I’ll also exclude funds that are less than 30 years old since they haven’t weathered the test of time.
I’ll speak about three funds, each of which has the following characteristics:
- a person who is more over 30 years old
- Have beaten the S&P 500 in the past 10 years
- Still beat the S&P in the past 10 years after removing taxes
(To compare, you may need to scroll.)
|Contrafund Fidelity||Fidelity Trend Fund is a mutual fund that invests in trends.||Fidelity Blue Chip Growth Fund is a mutual fund that invests in blue-chip stocks.||S&P 500 Index Fund|
|Symbol of the Fund||FCNTX||FTRNX||FBGRX||FXAIX|
|Ratio of Expenses||0.86%||0.73%||0.79%||0.015%|
|Growth during a 10-year period (pre-tax)||15.120%||16.31%||19.12%||13.90%|
|Growth during a 10-year period (post-tax)||12.31%||12.79%||15.84%||11.51%|
This does not imply that I recommend you purchase these ETFs. None of these funds are owned by me personally.
I’m only pointing out that over the last decade, certain Fidelity products have beaten index funds. It’s great for them. I wish they provided more information than simply the last ten years.
After that, I’ll explain why I think they’ve succeeded (hint: might be luck).
Fidelity Blue Chip Growth Fund is a mutual fund that invests in blue-chip stocks (FBGRX)
FBGRX invests in high-quality businesses with above-average growth, as the name suggests.
Personally, I believe this fund benefited greatly from its investments in NVIDIA and TESLA.
But even removing taxes, this fund grew by 15.84% over the past 10 years, compared to the S&P 500 growing by 11.51% after removing taxes.
However, I would not presume that previous success would foretell future success in this case. With NVIDIA and TESLA, this fund may have struck gold.
My advice is to avoid this fund unless you want to yolo: take some chances with 5% of your money since you are young and only live once.
Fidelity Trend Fund is a mutual fund that invests in trends (FTRNX)
The Fidelity Trend fund invests in the most popular stocks. Technology accounts for almost half of its assets, with foreign holdings accounting for just a tiny part.
The Trend Fund, like the Blue Chip Growth Fund, has been successful, I believe because it includes NVIDIA and TESLA among its top 10 holdings.
And, sure, I believe this is due to chance rather than ability. As a result, you may not want to put all your money into the Trend Fund.
Again, an intriguing investment, but unless you’re ready to yolo, I suggest sticking with index funds.
Contrafund Fidelity (FCNTX)
The Contrafund was founded in 1967 and has been managed by William Danoff, the same portfolio manager since 1990.
The Fidelity Contrafund invests in large-cap stocks with a focus on undervalued stocks.
This fund is also heavily invested in technology.
This is my favorite of Fidelity’s actively managed funds.
It has a reliable portfolio manager and does not only depend on technology to succeed.
It doesn’t have the most impressive growth, but it could beat the S&P 500 without major allocations to Tesla and NVIDIA.
Furthermore, during the 1960s, the fund has grown at a compound annual growth rate of 12.90 percent.
Unfortunately, with an expenditure ratio of 0.86 percent, it’s also one of the more costly funds.
However, if you want to make a high-risk wager, I’d advise investing with care and sparingly, albeit Contrafund seems to be a superior option.
Summary of the Best Fidelity Mutual Funds
Fidelity offers over 10,000 mutual funds, the majority of which are useless actively managed funds that you should avoid at all costs.
It’s difficult to choose the finest funds for you from so many options.
The best answer is the simplest one.
A wise investing approach avoids complication, makes a straightforward choice, and maintains the resolve to do nothing while emotions fluctuate.
Two index funds, the S&P 500 and the Total U.S. Stock Market, are enough as long as you make sure to keep ample cash. And if you want to lower risk, mix in a little bit of the Total U.S bond index fund.
The finest Fidelity mutual funds are as follows:
- For lazy, affluent individuals, the best Fidelity index fund is:
- This is the only Fidelity index fund you’ll ever need.
- For the young and ambitious, the best Fidelity index fund is
- Retirement funds with a high level of fidelity
- None of them are really impressive.
- Solution: 60% FSKAX (Fidelity Total Market Index Fund), 40% FXNAX (Fidelity Total Market Index Fund) (Fidelity U.S. Bond INdex Fund)
- Actively managed mutual fund from Fidelity (BUY WITH CAUTION)
- Contrafund Fidelity (FCNTX)
Do you have any additional questions or ideas? Please let me know in the comments section below!
Investing with fidelity
So, what’s next?
Do you know what the Vanguard Wellington Fund is? Find out why the Vanguard Wellington Fund (VWELX) is a favorite among retirees.
This resource will provide you a macro view of wealth and inequality: Despite Wealth Inequality, Here’s How to Make Money
Consider selling your assets to fund a home purchase. Use The Ultimate Rent vs Buy Calculator to see whether it’s worth it.
When it comes to investing, the one thing that tends to be universally agreed upon by everyone is that one should invest in mutual funds. These funds are meant to be a collection of stocks, bonds, gilts, and other assets, all of which are pooled together to make a portfolio. If you are planning to do this for the first time, the process will seem overwhelming.. Read more about best vanguard managed funds and let us know what you think.
Frequently Asked Questions
Which mutual funds are best for next 5 years?
The best mutual funds for the next 5 years are those that have a low expense ratio.
Which Fidelity funds pay the highest dividends?
Fidelity funds pay the highest dividends.
Which is the best performing mutual fund?
The best performing mutual fund is the Fidelity Magellan Fund.
This article broadly covered the following related topics:
- fidelity mutual funds performance
- best fidelity mutual funds
- fidelity mutual funds
- best fidelity index funds
- best fidelity mutual funds for 2018