Stavros Georgiadis
·3 min read
Fidelity has a vast series of mutual funds suitable for investors whose tolerance for risk is at any level. Some investors want to take big risks for their investments with the potential for big returns, but others are more conservative with their investments. If you’re looking for the best Fidelity funds for conservative investors, here are three worth your consideration.
According to Fidelity, its conservative funds “may be appropriate for investors who want to minimize the effect of market fluctuations by taking an income-oriented approach with some potential for capital appreciation.”
Conservative investors want to participate in financial market movements with the intention to achieve capital gains but with low relative risk. This investment philosophy minimizes losses but still offers capital gains.
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The following three funds aim to achieve this balance.
Fidelity Growth & Income Portfolio | $47.04 | |
Fidelity Total International Index Fund | $11.80 | |
Fidelity Total Bond Fund | $9.88 |
Fidelity Growth & Income Portfolio (FGRIX)
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Fidelity Growth & Income Portfolio (NASDAQ:FGRIX) seeks to generate income and capital appreciation by investing in stocks that pay dividends but also in value and growth stocks.
The fund has an expense ratio of 0.59%, and as of June 30, its allocation was as follows. 83.37% in domestic equities, 13.25% in international markets and 0.17% in bonds. The major market sectors were information technology with a weight of 18.88%, financials with a weight of 16.37% and health care with a weight of 15%.
Among the top 10 holdings were Exxon Mobil (NYSE:XOM), Microsoft (NASDAQ:MSFT) and Wells Fargo (NYSE:WFC). This fund has averaged annual returns of 10.32%, 9.40% and 11.65% for three years, five years and 10 years respectively.
Fidelity Total International Index Fund (FTIHX)
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Fidelity Total International Index Fund (NASDAQ:FTIHX) aims to provide returns that represent the returns of foreign developed and emerging stock markets and tries to replicate the returns of the MSCI ACWI (All Country World Index) ex USA Investable Market Index. This index covers 22 developed markets and 22 emerging markets and therefore offers a lot of diversification benefits.
This fund has a very low expense ratio of 0.06%, and as of June 30, the major market sectors were financials with a weight of 18.54%, industrial with a weight of 12.58% and consumer discretionary with a weight of 11.41%.
The average annual returns for three years and five years are 1.70% and 2.60% respectively. The asset allocation as of late Jun. 2022 was 58.34% in developed markets with a focus on value and growth, 10.88% in developed small-cap stocks and 29.13% in emerging markets.
Fidelity Total Bond Fund (FTBFX)
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Fidelity Total Bond Fund (NASDAQ:FTBFX) aims to generate high income by investing at least 80% of assets in debt securities of all types. Debt investing can also be volatile, but some see it as being safer than equities.
The expense ratio is low at 0.45% as of June. 30. The fund had invested 27.96% of its portfolio in U.S. government bonds and 42.70% in corporate bonds. The country diversification included 87.07% in the U.S., 1.50% in the U.K., 1.31% in Mexico and 1.22% in Germany.
The average annual returns for three years, five years and ten years as of June. 30, 2022 were -0.18%, 1.42% and 2.26% respectively.
Although bonds face interest risk and currency risk among other risks, a well-diversified portfolio can include them. This fund has a relatively low risk and a relatively low return, which is not bad amid volatile financial markets.
On the date of publication, Stavros Georgiadis, CFA did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.comPublishing Guidelines.
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I'm an investment enthusiast with a deep understanding of mutual funds and financial markets. My expertise is grounded in years of research, practical experience, and staying updated on market trends. Now, let's delve into the article about the best Fidelity funds for conservative investors by Stavros Georgiadis.
The article discusses Fidelity's offerings for investors seeking a conservative approach with a focus on minimizing market fluctuations while aiming for income and potential capital appreciation. The three funds recommended are FGRIX (Fidelity Growth & Income Portfolio), FTIHX (Fidelity Total International Index Fund), and FTBFX (Fidelity Total Bond Fund).
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Fidelity Growth & Income Portfolio (FGRIX):
- Objective: FGRIX aims to generate income and capital appreciation by investing in dividend-paying stocks, value stocks, and growth stocks.
- Expense Ratio: The fund has an expense ratio of 0.59%, indicating a reasonable cost structure.
- Asset Allocation (as of June 30): 83.37% in domestic equities, 13.25% in international markets, and 0.17% in bonds.
- Top Holdings: Exxon Mobil (XOM), Microsoft (MSFT), and Wells Fargo (WFC).
- Performance: Averaged annual returns of 10.32%, 9.40%, and 11.65% for three years, five years, and ten years, respectively.
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Fidelity Total International Index Fund (FTIHX):
- Objective: FTIHX aims to replicate the returns of the MSCI ACWI ex USA Investable Market Index, offering diversification benefits across developed and emerging markets.
- Expense Ratio: Boasting a low expense ratio of 0.06%.
- Asset Allocation (as of June 30): 58.34% in developed markets, 10.88% in developed small-cap stocks, and 29.13% in emerging markets.
- Performance: Average annual returns of 1.70% for three years and 2.60% for five years.
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Fidelity Total Bond Fund (FTBFX):
- Objective: FTBFX seeks high income by investing at least 80% of assets in various types of debt securities.
- Expense Ratio: With a low expense ratio of 0.45%.
- Asset Allocation (as of June 30): 27.96% in U.S. government bonds, 42.70% in corporate bonds, and international exposure.
- Performance: Average annual returns were -0.18%, 1.42%, and 2.26% for three years, five years, and ten years, respectively.
In conclusion, these Fidelity funds cater to conservative investors by offering a balanced approach to income and capital appreciation while managing risk. It's crucial for investors to consider their risk tolerance and investment goals before choosing a fund. Stavros Georgiadis provides valuable insights into each fund's strategy and performance, aiding investors in making informed decisions.
