Fidelity Investments for Index Fund in 2022

In this article, We're going to know about the six best fidelity Index funds includes some analytics. You can invest in from completely free index funds to some of the best performings on the market.

#1. NUMBER

So, the number one index fund on this list, which is the fidelity 500 index fund($FXAIX). This index fund invests in stocks included in the s&p 500 index, which is an index that tracks the 500 largest companies in the US FCX is currently holding 508 stocks with top holdings in Apple, Microsoft, Amazon and 500 of the other largest companies in the US over the past 10 years.

This fund has given an average annual return of about 16.54%, which means $10,000 invested 10 years ago would be worth over $46,000. Today. Now this fund is not free, like some of the other fidelity index funds on this list. But it might as well be the expense ratio for this index fund comes in at 0.015%.

Which means you will only have to pay the price of a small fry from McDonald's per year on $10,000 invested now this index fund is arguably Fidelity's best index fund to invest in if you want to build your wealth long-term either this one or number two FSKAX depending on if you want total market exposure, or just s&p 500 exposure.

And that actually reminds me of a very important point. And it's one of the downsides of this index fund, which is that because this Fund invests only in the s&p 500 index, you're not getting exposure to small-cap stocks because there are no small-cap stocks within the s&p 500. 

If you recall from earlier, large-cap stocks are from companies with a market cap of $10 billion or more a small-cap stock is from a company that has a market cap of less than $2 billion. Now when it comes to small-cap companies, okay, you can think of companies like Savich has resources or snitcher steel industries or shenana. Doha telecommunications My point exactly. You've never heard of these companies. And that's the reason why they're small-cap companies.

However, these companies often present massive growth opportunities that are not found in large-cap stocks from companies like Amazon or Google. I mean, can you imagine investing $1,000 in Apple back when it was a small-cap stock trading at 25 cents per share? And because FCX does not give you exposure to small-cap stocks.

It's going to be a good idea to combine this index fund with another index fund on this list. And it's likely going to be something like Fs CACs, which gives you total market exposure but this way a lot of your boxes are checked and you're exposing your portfolio to as many areas of the stock market as possible and there will be some overlap between these two funds but overlap is not always a bad thing.

#2. NUMBER

Number two is the fidelity total market index fund($FSKAX). This fund invests in stocks included in the Dow Jones us total stock market index, which is an index that seeks to track the total return of a broad range of US stocks. This index fund is essentially the same as FZROX which was number five on the list with one very important exception, unlike FZROX, which cannot be transferred to another broker.

If you ever did decide to switch FSKAX can so say, for example, that you wanted to switch from fidelity to Vanguard if you held FSKAX in your portfolio. Even though FSKAX is a fidelity index fund, you would still be able to transfer it to Vanguard successfully. This fund is currently holding 3875 stocks with top holdings in Apple, Microsoft, Amazon, and others over the past 10 years.

This fund has given an average annual return of 16.25%, which means $10,000 invested 10 years ago would be worth a tiny bit over $45,000 today and the expense ratio on this index fund is very low at 0.015%. You will only have to pay $1.50 per year on the $10,000 invested. 

#3. NUMBER

The number three is the fidelity NASDAQ Composite Index Fund($FNCMX), which invests in stocks included in the NASDAQ Composite Index, an index that represents the total return of a broad range of US stocks on the NASDAQ exchange, it's no secret or maybe it is that the NASDAQ 100 has outperformed the s&p 500 Over the past 15 years. 

There's simply no arguing that and most of this is due to the fact that out of the 3264 stocks that this fund holds its top holdings, which include companies like Apple, Microsoft, Amazon and Google make up almost 50% of the index. Now there is an argument that because of that this fund lacks diversification because of this. And that's true. 

But if you want to prioritize diversification, then you can combine this fund with some of the other total market funds on this list that we'll go over in a second. In terms of performance, this index fund has an average 10-year return of 20.76%. If you would have invested $10,000 into this fund 10 years ago, your investment would now be worth almost $66,000.

Now of course that does come with a higher expense ratio with this fund coming in at 0.29%. You can expect to pay $29 per year on $10,000 invested. Now if you wanted to avoid that high expense ratio and still get exposure to the NASDAQ index, particularly the NASDAQ 100.

Then I would recommend going with QQQ's M which is the Invesco NASDAQ 100 ETF and it has an expense ratio of point 15%, which is almost half the expense ratio of this index fund. 

#4. NUMBER

At number four is the fidelity zero large-cap index fund ($FNILX). This fund invests in companies included in the fidelity us large-cap index, which seeks to track the total return of large-cap companies in the US a large-cap company is one that has a market capitalization of over $10 billion.

large-cap companies are usually well established and have a history of producing quality goods and services, which tends to translate into steady consistent growth over time. For example, of the 516 stocks that this fund holds, you'll likely recognize all of the top holdings and use many of their products and services daily.

And this also explains why this index fund has such an impressive return since its inception in 2018, it's returned an average of 18.56% each year, which means $10,000 invested in 2018 would be worth over $17,500. Now, like with the last fund on this list, FC rocks this fund is also brand new. 

And so one caution that I want you to take is that because it's so new, it's difficult to know exactly how well it's going to continue to perform as it moves forward into the future, especially considering that this index fund is not very well diversified. But more on that in a second. 

Now in terms of costs, this index fund is part of Fidelity's family of zero-cost funds and of course, that means you'll pay $0 per year on $10,000 invested one thing that you'll want to keep in mind when you're investing in this index fund is that it only invest in large-cap stocks.

And unless investing is your full-time job and you're like Warren Buffett, most of us need diversified portfolios with exposure to multiple sectors, multiple market caps, and multiple assets in order to build wealth effectively. And so while this is a good index fund to have in your portfolio, it probably shouldn't make up the bulk of your portfolio since it's only investing in a single market cap. 

#5. NUMBER

And number five is the Fidelity Zero Total Market Index Fund ($FZROX). Invest in stocks included in the fidelity us total investable market index, which is an index that seeks to track the performance of the US stock market, the thing that helps FZROX to really stand out.

And the main reason why it made it on this list is that it did something that no other index fund has ever done before FZROX is the first index fund to ever carry no expense ratio. That's right, the expense ratio is 0%. This means you'll pay $0 per year on $10,000 invested.

I suspect that fidelity did this as a way to sort of attract new investors to open up accounts with them since it launched in 2018. It's returned an average of 18.01% each year, this means $10,000 invested in 2018 would be worth a little over $17,600 today, and in terms of what this fund actually invests in.

FZROX currently holds about 2662 stocks with top holdings in Apple, Microsoft, Amazon, and all the other big Dawgs. So at this point, a lot of you are probably thinking this fund is completely free. It's well diversified, and it has a good return on what could be wrong with it? 

One critically important point to mention about FZROX and all Fidelity's zero-branded index funds is that they cannot be transferred to other brokers. So let's say for example, that you wanted to move your shares of FC rocks from fidelity to Vanguard, you would first have to sell all of your shares of FC rocks and completely closed out of your position before making the switch. 

What's so bad about that? You're probably thinking the problem is that it forces you to trigger a taxable event known as a capital gain, assuming you actually profited from your investment. A capital gain is a tax on the profit from your investment and unless you're investing inside of a tax-advantaged account, like a Roth IRA or 401 K, then the IRS is gonna want their money. 

#6. NUMBER

The number six is the Fidelity Total International Index Fund ($FTIHX). This fund invests in stocks included in the MSCI All Country World Index, which is an Index that seeks to provide investment results that correspond to the total return of foreign developed and emerging markets. 

So in other words, this fund only invests in companies outside of the US. And this can be especially helpful if you're trying to add international exposure to your portfolio. This fidelity fund currently holds about 4825 stocks with top holdings and Nestle Alibaba, Samsung, and Toyota the average return since the fund's inception in 2016,

It hovers around 8.89%, which means $10,000 invested back in 2016, which would be worth a little over $16,000 today. Now, it's worth mentioning that historically, although an 8.89% is really good compared to some of the other funds on this list, that's a pretty modest return. But the point is not to get the highest returns in the market with this specific index fund.

That's what some of these other index funds are going to be for in terms of costs, this index fund is very cheap with an expense ratio of 0.06, you'll only have to pay $6 per year on $10,000 invested. Okay, well, that pretty much settles it right? You're gonna go put all your money into this index one, right? Not so fast. 

Because this Index Fund invests only in foreign markets, it can decline significantly in response to pretty much anything from economic developments to political issues. Now, this, of course, can and does happen in the US stock market. But foreign markets, particularly emerging markets, where economies are less stable, are a lot more prone to volatility. 

But this, of course, does not mean that it's a bad idea to go and invest in international stocks. I think it's a good idea, especially if you're investing long-term and you want to give your portfolio the extra reach next step. 

These are not any investment advice those are just my personal opinions. I'm doing it solely for the purpose of helping you at financial services and these are long-term investment not for the short term.