Fidelity Growth Fund: Investment Strategies And Opportunities

Fidelity Investments is a world leader in mutual funds, offering a wide range of investment options for those looking to diversify their portfolio. With over 70 years in the business, Fidelity has the tools and experience to help investors build an investment strategy that matches their style. Fidelity mutual funds cover all asset classes, from domestic equity to specialised sectors, allowing investors to find the right mix of funds to achieve their strategic investment goals.

Fidelity's rich history, global research capabilities, and dedication to innovation have made it a popular choice for investors. The company offers a global network of analysts and one of the largest research departments in the industry, providing in-depth insights and opportunities that others may miss.

Fidelity's funds cater to different investment needs and tastes, including actively managed funds, funds with zero management fees, and bond funds for income investors. With no sales loads, low fees, and no minimum investment requirements, Fidelity makes it easier for individuals to start investing without a high financial barrier.

Some of the specific Fidelity mutual funds that have been highlighted as top performers or good investment options include the Fidelity 500 Index Fund (FXAIX), Fidelity Total Market Index Fund (FSKAX), Fidelity Zero Large Cap Index Fund (FNILX), Fidelity Zero Total Market Index Fund (FZROX), and the Fidelity Magellan Fund (FMAGX).

Overall, Fidelity's mutual funds provide a practical and cost-efficient way for investors to access a diverse range of investment opportunities, backed by the company's extensive resources and expertise.

Fidelity's Mutual Funds

Fidelity offers a diverse range of mutual funds, including domestic equity funds, international equity funds, sector funds, fixed-income funds, asset allocation funds, index funds, and money market funds. Domestic equity funds provide exposure to successful, innovative, and profitable companies within the United States, offering significant appreciation potential. International equity funds tap into the growth potential of companies outside the U.S., helping to lower portfolio volatility through diversification.

Sector funds offered by Fidelity allow for tactical investment approaches, such as sector rotation strategies, and provide more precise asset allocation and greater portfolio diversification. Fixed-income funds offer the potential for capital preservation, depending on the fund. Asset allocation funds provide asset class diversification and professionally-managed strategies that deliver ongoing diversification through underlying fixed income and equity building blocks.

Fidelity's index funds have low management fees and are potentially more tax-efficient due to reduced portfolio turnover. The company also offers money market funds, which provide short maturities and minimal credit risk, along with municipal funds that offer tax-exempt income for non-retirement accounts.

Fidelity's International Equity Funds

The Fidelity Total International Equity Fund (FTIEC) is a large blend fund with a Morningstar Medalist Rating of Silver. It has total assets of 310.1 million, an expense ratio of 0.950%, and no load on the share class type. The fund's top holdings as of July 31, 2024, include Taiwan Semiconductor Manufacturing Co Ltd, Tencent Holdings Ltd, and Samsung Electronics Co Ltd.

The Fidelity Sustainable International Equity Fund (FSYRX) is a core international fund that enables investors to align their investments with environmental, social, and governance (ESG) factors. This fund is part of Fidelity's commitment to sustainable investing, which also includes the Fidelity Climate Action Fund (FCAEX) and the Fidelity Healthy Future Fund (FAPHX).

In addition to its international equity funds, Fidelity also offers a range of domestic equity, sector, fixed-income, and asset allocation funds, as well as index funds and money market funds, providing investors with a diverse set of investment options to choose from.

Fidelity's Fixed Income Funds

Mutual Funds

Fidelity offers a wide range of mutual funds that invest in fixed-income securities such as bonds and Certificates of Deposit (CDs). Mutual funds provide investors with a cost-efficient and diversified way to invest in fixed-income assets. Fidelity's mutual funds cover various types of fixed-income investments, including:

• Corporate Bond Funds: Investing in bonds issued by corporations, offering higher yields and risks compared to government and municipal bonds.
• Government Bond Funds: Investing in bonds issued by the U.S. government and government-sponsored enterprises, as well as mortgage-backed securities.
• Municipal Bond Funds: Investing in municipal bonds issued by state and local governments, with income typically exempt from federal taxes and, in some cases, state and local taxes.
• Short Duration Bond Funds: Helping to manage interest rate risk and offering higher yields compared to cash investments, with an average duration of less than five years.
• Diversified/Opportunistic Funds: Investing across multiple fixed-income sectors, including high-yield securities, U.S. government securities, and emerging market debt.
• High Yield Bond Funds: Focusing on higher-risk, lower-rated securities to pursue higher yields.
• International Bond Funds: Investing in taxable bonds issued by foreign governments and corporations.

Exchange-Traded Funds (ETFs)

Fidelity also offers bond ETFs, which provide the benefits of diversification and income potential with a low minimum investment. ETFs offer intraday pricing and trading flexibility, daily transparency of holdings, and diversification opportunities. The Fidelity Total Bond ETF, for example, seeks to deliver risk-adjusted outperformance during all interest rate environments.

Separately Managed Accounts (SMAs)

For eligible clients who meet certain investment minimums, Fidelity offers Fixed Income Separately Managed Accounts. These are professionally managed bond portfolios built around specific investment strategies and personalized to the investor's preferences.

Benefits of Fidelity's Fixed Income Funds

• Stability and Experience: Fidelity's extensive experience and large team of professionals provide stability and expertise in fixed-income management.
• Strong Track Record: Many of Fidelity's fixed-income funds have received high ratings and awards from Morningstar, recognizing their strong performance and investment strategies.
• Broad Investment Choices: Fidelity provides a wide range of fixed-income investment options, allowing investors to find funds that align with their strategic goals and risk tolerance.
• Competitive Fees: With low, transparent fees, Fidelity's fixed-income funds offer cost-effective investment opportunities.

Fidelity's Asset Allocation Funds

One of the key benefits of Fidelity's Asset Allocation Funds is their focus on diversification and asset allocation. These funds provide exposure to different asset classes, such as domestic equity, international equity, sector funds, fixed income funds, and index funds. By investing in a variety of asset classes, investors can reduce the risk of losing money and improve their potential for long-term returns.

In addition to the Target Date and Target Risk Funds, Fidelity also offers Income and Real Return Strategies funds, which seek to provide bond income and protect against inflation. The Fidelity Strategic Funds are another type of asset allocation fund that invests in a diversified mix of fixed income and equity to address key income needs.

When considering Fidelity's Asset Allocation Funds, it is important to remember that past performance does not guarantee future results. Additionally, fees and expenses should be carefully evaluated as they can impact the overall returns of an investment.

Fidelity's Index Funds

Fidelity's ZERO Total Market Index Fund (FZROX) is one of the most popular choices, with no annual management fees and broad exposure to market-cap-weighted large-, mid-, and small-cap domestic companies. The fund lends securities to generate income, contributing to its 0% expense ratio.

For investors specifically interested in large-cap stocks, the Fidelity ZERO Large Cap Index Fund (FNILX) tracks over 500 large-cap U.S. stocks through the Fidelity U.S. Large Cap Index. This fund also has a 0% expense ratio, achieved through securities lending.

The Fidelity 500 Index Fund (FXAIX) is another popular choice, providing exposure to the well-known S&P 500 index for an extremely low expense ratio of 0.015%. This fund has delivered an impressive 11.04% annualized return since its inception in February 1988.

For investors seeking a low-cost alternative to the S&P 500, the Fidelity Total Market Index Fund (FSKAX) tracks the Dow Jones U.S. Total Stock Market Index. With a 0.015% expense ratio, this fund offers investors exposure to over 3,800 market-cap-weighted domestic companies, including a significant number of small and mid-cap stocks outside the S&P 500.

Fidelity also offers the Mid Cap Index Fund (FSMDX), which has outperformed its Morningstar mid-cap blend category over the past 10 years. This fund provides diversification, with about 75% mid-cap stocks, 16% small caps, and 10% large caps.

In addition, Fidelity provides the U.S. Sustainability Index Fund (FITLX), a large-cap ESG index fund that has outperformed its large-cap blend Morningstar category over the past one, three, and five years. This fund has a relatively high weighting in companies with competitive advantages, such as brand recognition or patents.

Fidelity's range of index funds offers investors diverse options to suit their specific needs, with the benefits of low fees and broad market exposure.

Frequently asked questions