Fidelity's Safest Investment Options: Where To Start?

Fidelity is one of the most well-rounded brokerages available today, offering a range of investment options to suit different needs and tastes. With no minimum investment requirements, Fidelity's mutual funds are a great option for young or new investors. The company also offers a variety of low-risk and low-volatility investment funds, which can help to minimise risk and improve returns over time. In addition, Fidelity's zero-expense-ratio index funds mean that investors can build a balanced and virtually free retirement portfolio. The company has a strong reputation for its mutual funds, and its funds that beat the market over the past decade tended to lean heavily into technology stocks, favour growth-oriented companies, or focus on large-cap names.

Low-cost funds

Fidelity, for example, offers many low-cost funds. They have no minimum investment requirements, which is especially appealing to new or younger investors. Many other fund families require hundreds or even thousands of dollars to get started, which can be a huge hurdle for those just starting out. Fidelity also offers $0 transaction fees for its funds, meaning you can buy and sell without worrying about added costs eating into your returns.

Fidelity is unique in offering zero-expense-ratio index mutual funds. These funds, which track proprietary Fidelity indexes, allow you to invest effectively free of charge. Whether you want exposure to U.S. or international stocks, Fidelity's zero-expense-ratio funds are incredibly affordable.

• Fidelity ZERO Large Cap Index Fund (FNILX)
• Fidelity Mid Cap Index Fund (FSMDX)
• Fidelity ZERO Total Market Index Fund (FZROX)
• Fidelity U.S. Sustainability Index Fund (FITLX)
• Fidelity ZERO International Index Fund (FZILX)
• Fidelity 500 Index Fund (FXAIX)
• Fidelity Total Market Index Fund (FSKAX)

Low-volatility funds

Fidelity offers two types of low-volatility funds: the Fidelity® Low Volatility Factor ETF and the Fidelity® US Low Volatility Equity Fund. Both funds aim to minimise volatility risk and provide the potential to benefit in up markets. The main difference between the two is that the Low Volatility Factor ETF seeks to invest in companies with lower volatility than the broader market, while the US Low Volatility Equity Fund focuses on minimising volatility risk in down markets.

It's important to note that low-volatility funds do not guarantee protection against losses. While they can help reduce exposure to short-term volatility, they may underperform non-min vol funds when the broad market is doing well. Additionally, they can still experience declines during sharp market corrections. However, the expectation is that any potential losses during a market decline would be smaller relative to other investments with more exposure to volatility.

When evaluating a low-volatility fund, investors can consider various risk and return measures, such as R-squared, beta, standard deviation, upside/downside capture ratio, and historical performance. These metrics can provide insights into the fund's potential risk and return characteristics.

Overall, low-volatility funds can be a valuable tool for investors seeking to balance their portfolio and manage risk during uncertain market conditions. By including these types of investments, investors can aim to stay invested while potentially reducing the impact of market volatility on their portfolios.

No-minimum investment funds

Fidelity's no-minimum investment funds offer several benefits, including:

• Zero account minimums and zero account fees for retail brokerage accounts.
• A wide range of investment options, including stocks, bonds, mutual funds, and ETFs.
• Low or zero expense ratios, which means you pay minimal fees on your investments.
• Access to well-known and reputable companies such as Apple, Microsoft, Amazon, and Google.
• Tax advantages, such as tax-advantaged growth potential and tax-deductible contributions for certain accounts.
• Fidelity ZERO Large Cap Index Fund (FNILX): This fund seeks to provide investment results that correspond to the total return of a broad range of large-capitalization U.S. companies. It has a 0% expense ratio and no minimum investment requirement.
• Fidelity ZERO Extended Market Index Fund (FZIPX): This fund seeks to provide investment results that correspond to the total return of a broad range of mid- to small-capitalization U.S. companies. It also has a 0% expense ratio and no minimum investment requirement.
• Fidelity ZERO Total Market Index Fund (FZROX): This fund seeks to provide investment results that correspond to the total return of a broad range of publicly traded companies in the US. It has a 0% expense ratio and no minimum investment requirement.
• Fidelity ZERO International Index Fund (FZILX): This fund seeks to provide investment results that correspond to the total return of foreign developed and emerging stocks. It has a 0% expense ratio and no minimum investment requirement.

In addition to these no-minimum investment funds, Fidelity also offers a range of other investment options, such as sector ETFs, mutual funds, and brokerage accounts, each with its own unique features and benefits.

It is important to remember that investing involves risk, and the value of your investments may fluctuate. It is always recommended to do your own research and consult with a financial advisor before making any investment decisions.

Zero-expense-ratio funds

Fidelity, a well-known investment firm, offers a range of zero-expense-ratio index mutual funds, which means that investors can buy and sell these funds without paying any transaction fees or expenses. This is a significant advantage for investors, as it allows them to keep more of their investment returns over time.

Fidelity's zero-expense-ratio index funds include the following:

• Fidelity ZERO Large Cap Index Fund (FNILX): This fund seeks to provide investment results that correspond to the total return of a broad range of large-capitalization U.S. companies. It has a 0% expense ratio and no minimum investment requirement.
• Fidelity ZERO Extended Market Index Fund (FZIPX): This fund aims to provide investment results that match the performance of a diverse group of mid- to small-capitalization U.S. companies. It also has a 0% expense ratio and no minimum investment requirement.
• Fidelity ZERO Total Market Index Fund (FZROX): The goal of this fund is to deliver investment returns that align with the performance of a wide range of publicly traded companies in the U.S. It has a 0% expense ratio, and investors are not required to invest a minimum amount.
• Fidelity ZERO International Index Fund (FZILX): This fund seeks to provide investment results that match the total return of foreign developed and emerging stocks. It has a 0% expense ratio, and there are no minimum investment requirements.

By offering these zero-expense-ratio funds, Fidelity provides investors with an affordable and accessible way to invest in the stock market. These funds are particularly attractive to new and young investors who may have limited funds to start investing. Additionally, the lack of fees and expenses allows investors to maximize their returns over time.

It is important to note that investing in zero-expense-ratio funds, or any other investment vehicle, carries inherent risks. The value of investments can fluctuate, and there is always the potential to lose money. Therefore, investors should carefully consider their financial goals, risk tolerance, and conduct thorough research before making any investment decisions.

Large-cap funds

Fidelity, a well-known investment firm, offers a variety of large-cap funds that provide investors with exposure to the largest and most dominant companies in the US stock market. One example is the Fidelity ZERO Large Cap Index Fund (FNILX), which tracks the 500 largest US stocks by market capitalisation through the Fidelity US Large Cap Index. This fund offers investors a diversified portfolio of large-cap companies, including well-known names such as Apple, Microsoft, Amazon, and Tesla. With a 0% expense ratio and a low turnover rate, FNILX is a tax-efficient and cost-effective option for investors.

Another option is the Fidelity Large Cap Stock Fund (FLCSX), which provides targeted exposure to large-cap stocks. This fund aims to invest primarily in common stocks of large capitalisation companies, defined by Fidelity as those with a market capitalisation of $10 billion or more. By focusing on larger companies, this fund seeks to provide investors with a more stable and established investment option.

Additionally, Fidelity offers the Large Cap Growth Index Fund (FSPGX), which provides even more exposure to the largest technology stocks beyond what is included in broad market index funds. This fund tracks the Russell 1000 Growth Index, screening for higher price-to-book ratios and higher sales per share historical growth. With a low expense ratio of 0.035%, FSPGX offers investors access to high-growth technology stocks while diversifying risk by investing in a broad range of large-cap companies.

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