Fidelity's Investment Philosophy: A Guide To Their Strategy

Fidelity Investments is an American multinational financial services corporation based in Boston, Massachusetts. It is one of the largest asset managers in the world, with $5.8 trillion in assets under management and $15 trillion in assets under administration as of September 2024. Fidelity offers a wide range of financial products and services, including brokerage, mutual funds, fund distribution, investment advice, retirement services, index funds, wealth management, securities execution, and life insurance. With a focus on innovation and customer-centricity, Fidelity has established itself as a leading player in the financial industry. The company's commitment to providing valuable investment solutions while maintaining transparent and competitive pricing has solidified its position as a trusted partner for investors at various stages of their financial journeys.

Zero expense ratio index funds

Fidelity is a financial and investment broker with a range of products and services for all types of investors. The company has a strong commitment to innovation and delivering value to its customers, and this is reflected in its introduction of zero expense ratio index funds. These funds offer a range of benefits to investors, including:

• No account fees for retail brokerage accounts
• No minimum investment
• 24/7 live customer service
• Lower expenses than comparable funds at Vanguard

Fidelity currently offers four zero expense ratio index mutual funds to individual retail investors who purchase their shares through a Fidelity brokerage account:

• Fidelity® ZERO Large Cap Index Fund (FNILX)
• Fidelity® ZERO Extended Market Index Fund (FZIPX)
• Fidelity® ZERO Total Market Index Fund (FZROX)
• Fidelity® ZERO International Index Fund (FZILX)

These funds seek to provide investment results that correspond to the total return of a broad range of companies, including large-capitalization U.S. companies, mid- to small-capitalization U.S. companies, publicly traded companies in the US, and foreign developed and emerging stocks, respectively.

While these funds offer a range of benefits, there are also some potential drawbacks to consider. For example, they are not portable to another brokerage, and they are only available in Fidelity retail accounts, such as IRAs and taxable brokerages. Additionally, they may not be as comprehensive as non-zero funds and have fewer total stocks.

Overall, Fidelity's zero expense ratio index funds can be a great option for investors looking to save money on fees and access a range of investment opportunities. However, it is important to carefully consider the potential drawbacks and how these funds fit into your overall financial strategy.

No account fees

Fidelity Investments is a brokerage firm with a strong reputation for its mutual funds and no-commission stock, ETF and options trades. The company offers a range of tools, research and resources for making trades, and is considered investor-friendly, especially for those with a "buy and hold" approach.

Fidelity has no account fees and no minimums to open a retail brokerage account, including IRAs. The company also offers a selection of more than 3,300 no-transaction-fee mutual funds.

Fidelity's self-directed brokerage account serves active traders who want complete control of their investments. This account offers commission-free trades, fractional shares, and smart trading technology.

Fidelity Go is the company's robo-advisor service, which offers low-cost diversification strategies, online planning tools, and access to an advisor if your account balance exceeds $25,000. There is no account minimum and no fee for accounts under $25,000. For accounts with balances of $25,000 or more, there is an annual advisory fee of 0.35%.

Fidelity also offers managed accounts with access to human advisors, including Fidelity Wealth Services and Fidelity Strategic Disciplines. These accounts have higher minimums and fees but provide more comprehensive financial management services.

Overall, Fidelity's lack of account fees and low-cost investment options make it a compelling choice for investors seeking to minimize costs.

Investment advice

Fidelity Investments is one of the largest asset managers in the world, with a long history of providing investment advice and services. Here is some investment advice based on their philosophy:

Investment Philosophy

Fidelity's investment philosophy is centred around putting their customers first. They aim to help individuals feel confident in their financial goals, offering financial planning, advice, and educational resources to support investors in achieving their goals. With a focus on long-term value creation, they continuously innovate and challenge the status quo to meet their customers' evolving financial needs.

• Straightforward pricing and no account fees: Fidelity prioritises transparent and straightforward pricing with no account fees, minimum balances, or commissions on stock, ETF, or options trades. This helps investors keep more of their money invested and growing.
• Diversification: Fidelity offers a wide range of investment options, including stocks, bonds, mutual funds, ETFs, options, and more. Diversifying your portfolio across different asset classes can help manage risk and maximise returns.
• Educational resources: Fidelity provides extensive educational resources and research tools for investors of all levels, from beginners to active traders. Take advantage of these resources to make informed investment decisions and stay updated with market trends.
• Retirement planning: Whether you want to manage retirement planning yourself or seek guidance, Fidelity offers various retirement account options, such as Roth and traditional IRAs. Start planning for retirement early to benefit from compound interest and maximise your savings.
• Fractional shares: Fidelity allows investors to purchase fractional shares, enabling you to invest in higher-cost stocks by buying a fraction of a share. This feature makes investing in diverse companies more accessible, especially for those with limited funds.
• Cryptoassets: Fidelity has entered the cryptocurrency space, offering custody and trading services for digital assets. Consider adding crypto to your portfolio if it aligns with your risk tolerance and investment goals.
• Customised plans: Fidelity offers customised investment plans tailored to your specific needs and goals. Working with a dedicated advisor can help you create a strategy that aligns with your risk profile and financial objectives.
• Technology and innovation: Fidelity continuously invests in new technologies to enhance the customer experience. Take advantage of their online platforms, virtual assistant, and mobile app to access your investments and stay connected with the latest market information.
• Customer service: Fidelity is known for its strong customer service, providing 24/7 support through various channels such as phone, email, chat, and in-person at their branch locations. Don't hesitate to reach out for assistance or guidance.
• Security and protection: Fidelity prioritises the protection of your portfolio and personal information. They utilise advanced technology to safeguard your investments and sensitive data, giving you peace of mind.

Retirement services

Fidelity offers a range of services to help individuals plan for their retirement. The company provides guidance, tools, and resources to help people save for and live in retirement.

Fidelity's retirement services include:

• Free personalized plans: Fidelity offers a free, flexible plan for retirement that can be adjusted as life changes. This includes a savings and investment roadmap to help individuals meet their retirement goals.
• Timely tips: The company provides saving and investing tips to help individuals make progress towards their retirement goals.
• Retirement accounts: Fidelity offers various retirement account options, such as rollover IRAs, Roth IRAs, and traditional IRAs, which allow individuals to choose and manage their own investments, including mutual funds, stocks, bonds, and ETFs. There are no account fees or minimums to open these accounts.
• Investment advisory services: Fidelity provides access to a team of advisors and dedicated advisors with supporting teams to help individuals with their investment strategies and portfolio management.
• Planning tools: Fidelity offers online planning tools to help individuals select from a range of investment options and build their own portfolios.
• Retirement calculators: The company provides retirement calculators to help individuals estimate how much they need to save for retirement.
• Educational resources: Fidelity offers educational articles, videos, and webinars to help individuals make informed decisions about their retirement planning.
• Virtual assistant: Fidelity has a virtual assistant that can provide basic information and guidance on retirement planning. However, live help is also easily accessible if needed.

Fidelity's retirement services are designed to help individuals at any stage of their retirement journey, whether they are just starting to save or already living in retirement. The company's goal is to provide clear guidance and customized plans to help individuals achieve their desired retirement goals.

Wealth management

Fidelity Wealth Management offers a dedicated advisor to help you create a financial plan that is tailored to your needs. This includes comprehensive planning that covers topics like retirement, taxes, health care, and estate planning.

The company's wealth management services are designed to help you grow and protect your wealth. Fidelity takes into account your investment preferences, current portfolios, and tax situations to create a strategy that aligns with your goals. The company offers a range of investment options, such as funds managed exclusively for eligible clients, index products, or individual securities.

Fidelity's wealth management team can provide extensive financial experience and comprehensive planning guidance. They will work with you to understand your long-term vision, feelings about risk, and current portfolio to develop an appropriate investment strategy. The company also offers access to investment specialists who can explain the investment decisions made on your behalf.

Fidelity Wealth Management also provides a range of specialized services, such as trust solutions for inheritance and estate planning, as well as fixed income and bond investing. The company's advisors can help you integrate bonds and CDs into your investment approach, with strategies designed to preserve wealth, generate income, and manage taxes.

The company's services are accessible to a wide range of investors, with a minimum account balance of $50,000 for Fidelity Wealth Services and $2 million for Fidelity Private Wealth Management.

Frequently asked questions