Top Fidelity Mutual Funds for Regular Investors
Fidelity provides a range of mutual funds suitable for regular investors. Forbes Advisor has handpicked the best options that would work well in your workplace 401(k) plan or taxable brokerage account.
Fidelity’s top fund searches for undervalued stocks, such as construction supply firm Builders FirstSource Inc (BLDR) and storage unit operator CubeSmart. It provides an ideal “set it and forget it” investment that could add substantial value to your portfolio.
1. Fidelity Focused Real Estate Fund (FSRRX)
The Fidelity Focused Real Estate Fund in Boston is a taxable bond fund dedicated to investing in companies with diverse businesses, including residential and commercial real estate, energy infrastructure, and commodities. Domestic and international issuers may be covered through debt and equity investments within this fund, which has low turnover with relatively modest fees associated with management fees.
Jody Simes has served as the global sector leader/analyst for both FIAM’s global energy and materials sectors since 2011 and 2006, having entered the industry in 1993 as an analyst trainee. Furthermore, he holds an FCFA charter and is certified in Project Management.
Richard Munclinger has been the Portfolio Manager of Fidelity’s Central Real Return Funds since 2016. These specialized investment vehicles enable Fidelity funds to invest in specific security types or investment disciplines and seek actual returns. He is also part of Fidelity’s core/core plus/tactical bond team and oversees inflation-protected debt assets within their Strategic Real Return Funds.
2. Fidelity-Focused High-Income Fund (FHIFX)
When most people think of retirement planning, they envision an equitable mix of stocks and bonds in a balanced portfolio. Fidelity offers funds that can play critical roles at various points during this process of retirement planning – these top Fidelity funds for retirement feature affordable fees while offering income generation potential.
The Fidelity Dividend ETF for Rising Rates (NYSEARCA: FDRR) follows the Fidelity Dividend Index for Rising Rates, which seeks to generate returns that correlate positively with rising 10-year U.S. Treasury yields. FDRR provides investors with bond-like returns without as much credit risk as typical junk bond ETFs typically used by retirees for diversifying their portfolios. It currently offers a 30-day SEC yield of 4.4% which makes this fund ideal for retirees looking for diversifying portfolio diversification strategies such as junk bond ETFs which might help diversify portfolios in other ways.
FDRR differs from other junk bond funds in that almost all its assets are invested in securities with at least an A- rating, such as debt instruments with an AAA credit rating and preferred stocks rated A or higher. Technology and financial services stocks account for almost 40% of its portfolio’s stock market weight.
Another impressive characteristic of this fund is its meager annual fee of 0.45% – one of the lowest fees among similar funds. This fund offers a tax-efficient series that may help retirement planners save on taxes by deferring capital gains taxes until units are sold or the adjusted cost base drops below zero. Retirees must consider this factor carefully, as any capital gain loss can significantly diminish their net worth. The rates of return, including changes in unit value and reinvested distributions, reflect historical annual compounded total returns over a specified timeframe. Gross yearly returns do not consider sales, redemption, distribution, or option charges payable by investors and income taxes due by them, which could reduce actual returns.
3. Fidelity Select Energy Fund (FSENX)
Investment in common stocks of companies engaged primarily in energy activities – from traditional sources like oil, gas, electricity, and coal to newer forms like nuclear, geothermal oil shale, and solar power. Capital appreciation is sought through this strategy; typically, at least 80% of assets invested are secured and issued from within this field of energy activity; foreign issuers may also be considered.
Fidelity Select Energy Fund (FSENX) has recently shown promising returns, posting 1.2% growth over the past year to place itself within the top 25% of its category.
The fund boasts an excellent risk/reward profile measured by its beta and alpha. With a beta value of 1.38, this fund tends to experience greater market-wide volatility than others in its category.
However, this fund has a negative alpha of -3.97, indicating that managers often find it challenging to deliver above-benchmark returns with this strategy.
FSENX also boasts an extremely high turnover rate, which could reduce investor returns. Fund managers frequently altering positions may cause this high rate, resulting in costly trading fees.
Financial instruments all carry some risk, though buying and selling financial instruments can be profitable when done correctly. It is essential to distinguish between unsystematic risk (the possibility that one event could significantly change an agent) and systematic risk, with unsystematic risks linked to particular markets with low correlations, to diversify away from those unsystematic ones properly.
4. Fidelity Select International Fund (FISLX)
Investment in international markets effectively diversifies your portfolio and exposes you to global growth trends. Fidelity Select International Fund (FISLX) seeks long-term capital appreciation by investing in various foreign companies across asset classes, including common stocks and exchange-traded funds. Managed by Maurice FitzMaurice, this fund boasts an expense ratio that falls well below the category average of 1.07%.
Fidelity Select Medical and Equipment Systems Fund (FSMEX) is an excellent option for investors seeking a comprehensive approach to investing in the health sector. It holds a portfolio of healthcare stocks from various subsectors – pharmaceuticals, biotechnology, medical devices, equipment, etc.) plus an expense ratio of 0.71 percent with a minimum initial purchase requirement of $0.
Fidelity Rewards program criteria require funds with track records and management team tenure that meet specific standards and an 18% turnover rate or less (reducing transaction costs and improving tax efficiency). Finally, funds must be registered as individual accounts, joint accounts, or eligible revocable trust accounts – more details on eligibility can be found on their respective program websites.
5. Fidelity Global Opportunities Fund (FOCPX)
Fidelity Global Opportunities Fund (FOCPX) is an open-ended mutual fund established in the US that strives to achieve long-term capital appreciation. The Fund scouts for investment opportunities across markets, currencies, and sectors worldwide – at least 65% of its assets must be invested in equity securities, with another 35% invested in foreign debt instruments; its nature as a large-cap growth fund must also be considered when selecting its investments.
Mutual funds are professionally-managed pools of money used to buy stocks, bonds, or other financial instruments on behalf of its investors. Mutual funds are one of the most popular ways of investing in the stock market; most mutual funds differ from exchange-traded funds (ETFs) in that they are actively managed rather than passively tracked by computer programs; choosing an appropriate fund depends upon both your risk tolerance and goals when selecting its manager.
Mutual funds come in various varieties, each offering its own distinct set of features. There are aggressive hybrid funds, dynamic asset allocation funds, balanced advantage funds, conservative hybrid funds, and arbitrage or equity savings funds; each type offers its investment style and risk/reward profile.
An aggressive hybrid fund typically invests most of its assets in stocks while allocating some funds towards debt instruments – an option suitable for investors looking for greater returns with reduced risk.
Fidelity Small Cap Discovery Fund (FSCRX) stands out among aggressive hybrid funds thanks to its meager net expense ratio of only 0.58% compared with an industry average of 0.97%. Furthermore, this fund boasts favorable sector weightings, with 19.8% in financial services, 16.8% in technology, and 14.7% in industrials. In addition, it has an appealing yield of 7.1%, providing an excellent return for its cost.