Fidelity Index Funds: Where To Invest Your Money Wisely

Fidelity index funds are a great option for investors looking for a low-cost, low-maintenance way to grow their savings. With a wide range of choices, investors can choose from funds that track different market indexes, such as the S&P 500 or the Nasdaq Composite Index. Fidelity's index funds also cover a variety of asset classes, including domestic and international equity, fixed income, and sustainable investment options.

Fidelity's funds offer some of the lowest prices in the industry, with expense ratios below 0.20% in some cases. The company's experience in managing index funds for over 30 years, along with its commitment to minimizing tracking errors, makes it a reliable choice for investors.

When deciding where to invest in Fidelity index funds, it's important to consider your investment goals and risk tolerance. Whether you're saving for retirement, education, or health expenses, Fidelity offers a range of account types, such as brokerage accounts, IRAs, and health savings accounts (HSAs), that can be tailored to your needs.

Additionally, Fidelity provides 24/7 customer service and has been recognized multiple times by Barron's as the Best Online Broker, making it a trusted partner for investors looking to build a diverse and efficient portfolio.

Fidelity 500 Index Fund (FXAIX)

The Fidelity 500 Index Fund (FXAIX) is a popular investment fund that offers low-cost access to a high-quality portfolio. With net assets of $512.3 billion and an expense ratio of 0.015%, this fund provides investors with an opportunity to diversify their investments and minimise costs. The fund has a trailing 12-month yield of 1.4% and was established on February 17, 1988.

One of the key advantages of investing in the FXAIX fund is its ability to track the S&P 500 index, which consists of the 500 largest and most successful public companies in the United States. This means that by investing in FXAIX, you are essentially investing in a broad range of well-established and successful US companies. The performance of the S&P 500 companies has been impressive over longer time frames, with an average annual return of about 9% between 1993 and 2023, net of inflation and including dividends.

The FXAIX fund is a popular choice for investors seeking a low-cost S&P 500 fund. Its large asset base and low expense ratio make it an attractive option for those looking to mirror the performance of the S&P 500 index. Additionally, the fund has a relatively low net expense ratio of 0.02%, making it a cost-effective option for investors.

When considering investing in the Fidelity 500 Index Fund (FXAIX), it is important to assess your investment goals and risk tolerance. This fund provides a way to invest in a diverse range of large and successful US companies, offering potential for long-term growth. However, it is always advisable to conduct your own research and consult with a financial professional before making any investment decisions.

Fidelity's range of low-cost index funds

Fidelity offers a wide range of low-cost index funds that provide investors with a variety of investment options. Here is an overview of some of the key funds available:

Fidelity 500 Index Fund (FXAIX)

This fund is a popular choice among investors as it provides access to a high-quality portfolio at a low cost. With an expense ratio of only 0.015% and a track record dating back to 1988, it has delivered strong annualized returns of 11%. The fund tracks the S&P 500 index, which includes the 500 largest and most successful public companies in the US.

Fidelity Mid Cap Index Fund (FSMDX)

The Fidelity Mid Cap Index Fund has net assets of $33.4 billion and an expense ratio of 0.025%. It tracks the Russell Midcap Index, which consists of the 800 smallest companies within the Russell 1000 index. This fund offers exposure to mid-sized companies with good growth potential and is a complementary addition to portfolios already holding large-cap stocks.

Fidelity Small Cap Index Fund (FSSNX)

With net assets of $24.7 billion and an expense ratio of 0.025%, the Fidelity Small Cap Index Fund invests in Russell 2000 stocks, which include the 2,000 smallest public US companies. Smaller companies have more room to grow but also come with higher risk. This fund provides a well-diversified approach to investing in small-cap stocks.

Fidelity Global ex-U.S. Index Fund (FSGGX)

The Fidelity Global ex-U.S. Index Fund has net assets of $9.8 billion and an expense ratio of 0.055%. It uses sampling to replicate the performance of the MSCI ACWI (All Country World Index) ex USA Index, investing in companies worth more than $10 billion outside the US. This fund provides exposure to different markets, currencies, and growth drivers, making it a good choice for investors seeking international diversification.

Fidelity U.S. Bond Index Fund (FXNAX)

The Fidelity U.S. Bond Index Fund has net assets of $55.8 billion and an expense ratio of 0.025%. It tracks the Bloomberg U.S. Aggregate Bond Index and primarily consists of US Treasury debt, corporate bonds, and mortgage-backed securities. Bonds are a stable addition to a portfolio and can help reduce overall volatility, making this fund a good choice for domestic bond exposure.

Fidelity Multi-Asset Index Fund (FFNOX)

The Fidelity Multi-Asset Index Fund is a blended fund with net assets of $7.8 billion and an expense ratio of 0.06%. It holds a set composition of domestic and international stock and bond funds, with 85% exposure to stocks, making it suitable for younger or mid-age investors. This fund is a good choice for investors who want a diversified portfolio without the hassle of managing multiple positions and rebalancing.

Fidelity's asset allocation funds

Fidelity Asset Manager funds are diversified single-fund strategies that can help make it easy to maintain a portfolio based on risk tolerance. These funds combine expertise in asset allocation and security selection, offering diversification across multiple asset classes, including domestic and international stocks across varying styles and market capitalization ranges, investment-grade and high-yield fixed income, and short-term investments.

• A single fund provides exposure to multiple asset classes.
• Asset allocation remains aligned with your risk tolerance.
• A single-fund strategy simplifies your financial picture.

Fidelity offers seven Asset Manager funds, with equity exposure ranging from conservative (20%) to aggressive growth (85%). Choosing a fund starts with understanding your risk tolerance, time horizon, and investment goals. Because stocks are considered more volatile than bonds or short-term investments, the Fidelity Asset Manager 20% may be more appropriate for investors who are less comfortable with risk or have a shorter time horizon. On the other hand, the Fidelity Asset Manager 85% may be better for those who are more comfortable with risk or have a longer time horizon.

• Fidelity Asset Manager 85%
• Fidelity Asset Manager 70%
• Fidelity Asset Manager 60%
• Fidelity Asset Manager 50%
• Fidelity Asset Manager 40%
• Fidelity Asset Manager 30%
• Fidelity Asset Manager 20%

Fidelity's fixed income funds

Fidelity is one of the most experienced managers of fixed-income funds in the industry, with over 190 professionals managing more than $1 trillion in assets. The company offers a wide range of fixed-income investment options, including bond funds, over 100,000 individual bonds, and professionally managed bond portfolios.

Fidelity's fixed-income funds have received numerous accolades, with 24 funds awarded 4 or 5 stars by Morningstar, and 8 funds earning a GOLD Morningstar Analyst rating. In 2016, the Fidelity Total Bond Fund portfolio managers won the Morningstar U.S. Fixed-Income Fund Manager of the Year award.

• Fidelity Total Bond Fund (FTBFX): This fund seeks to provide a high level of current income and can be used as a core bond investment for investors with a long-term perspective. It offers broad exposure to government and investment-grade corporate bonds, opportunistic high-yield investments, and has a track record of competitive total returns.
• Fidelity Total Bond ETF (FBND): This is an intermediate-term exchange-traded fund (ETF) that employs a diversified fixed-income strategy. It aims to deliver risk-adjusted outperformance during all interest rate environments and offers the flexibility of an ETF, including intraday pricing and trading, daily transparency of holdings, and diversification opportunities.
• Fidelity Intermediate Municipal Income Fund (FLTMX): This fund seeks to generate tax-exempt income while protecting shareholder capital. It emphasizes investment in hospitals that are attractive acquisition candidates, a maturity mix expected to outperform in a rising rate environment, and manages with an awareness of potential market liquidity challenges.

Fidelity also offers a range of other fixed-income solutions, such as money market funds, annuities, and separately managed accounts (SMAs), which can be personalized to meet specific investment preferences and strategies.

Fidelity's international equity funds

Fidelity International Equity Funds are a great way to diversify your portfolio and lessen the effect of the volatility of the American economy.

Fidelity Global ex-U.S. Index Fund (FSGGX)

With over $9.8 billion in net assets, FSGGX is a large-cap fund that invests in companies worth more than $10 billion based in Europe, emerging markets, Asia-Pacific, and Canada. The fund has an expense ratio of 0.055% and a three-year average annual return of 2.0%. FSGGX holds over 2,300 foreign large-cap stocks, including well-known names like Taiwan Semiconductor, Novo-Nordisk, and Toyota.

Fidelity International Sustainability Index Fund (FNIDX)

Fidelity's lineup includes sustainable index funds, and FNIDX is one of them. This fund is designed for investors interested in socially responsible investing.

Fidelity Total International Equity Fund (FTIEX)

FTIEX has a Morningstar Medalist Rating of Silver, indicating a strong management team and sound investment process. It has a distribution fee that is average for its category and an expense ratio of 0.950%.

Fidelity Sustainable International Equity Fund (FSYRX)

FSYRX is another sustainable international equity fund offered by Fidelity.

Fidelity International Index Fund (FSPSX)

Fidelity also offers the FSPSX fund, which is part of their range of index funds that attempt to track the performance of a range of the most widely followed equity and fixed-income indexes.

Frequently asked questions