8 Best Fidelity Index Funds for Retirement (2024)

The aim of an index fund is to track the returns of a stock market index, such as the S&P 500 or Wilshire 5000. Index funds can come in different forms, including mutual funds and ETFs. An index fund might buy all of the securities that comprise an index or just a representative sample.

Some investors pick a few stocks and hope for a couple of big winners, but the index fund investor buys and holds a wide range of securities, hoping to ride the wave of long-term market growth. This makes index funds more stable and better suited for retirement investments. Just keep in mind that, as with any investment, the money you put into an index fund is always at risk of losing value.

What Are Fidelity Index Funds?

Fidelity index funds provide investors with a simple, low-cost method of diversifying their portfolios across several sectors of the market.

If you wonder about the performance of a Fidelity index fund, a good starting place is to compare it to the performance of the index it tracks.

Good To Know

As of April 7, the S&P 500 index had returned -7.73% over the past 12 months and +7.50% over the previous three months. The Fidelity 500 Index Fund — which Fidelity says is designed to track the S&P 500 — reported a 12-month return of -7.74% and a three-month return of +7.50%. The fund’s performance was nearly identical to that of the index.

Index funds make sense for the average investor looking toward retirement. As famed stock picker Warren Buffett says, an index fund is a good way to avoid the risk of picking individual stocks and the effects of fees and expenses on your investments.

Best Fidelity Index Funds for Retirement

So what are the best Fidelity index funds? This evaluation of the top Fidelity index funds to buy looks at several measures of performance to answer that question. You’ll find the following information associated with each fund:

• Fund overview
• Average annual returns
• Expense ratio
• Level of risk

Here’s a look at some of the top performers.

1. Fidelity Multi-Asset Index Fund (FFNOX)

Previously called the Fidelity Four-in-One Index Fund, the Multi-Asset Index Fund invests in seven Fidelity stock and bond index funds, allocating assets to achieve broad diversification.

• Average annual returns
  • 6.78% year to date
  • -6.68% one year
  • 13.37% three years
• Expense ratio: 0.13%
• Average risk — 5 on a scale of 1 to 10

2. Fidelity Nasdaq Composite Index Fund (FNCMX)

This fund is designed to closely track the price and yield of the Nasdaq Composite Index. Fidelity normally invests at least 80% of the assets into common stocks included in the Nasdaq. Top holdings include Apple, Microsoft, Amazon, Tesla, Alphabet and Nvidia.

• Average annual returns
  • 15.82% year to date
  • -13.09% one year
  • 17.64% three years
• Expense ratio: 0.37%
• Above-average risk — 6 on a scale of 1 to 10

3. Fidelity Large Cap Growth Index Fund (FSPGX)

This fund invests at least 80% of its assets into securities included in the Russell 1000 Growth Index, with a focus on large-cap growth stocks. Major holdings include Apple, Microsoft, Amazon, Tesla and Alphabet.

• Average annual returns
  • 13.64% year to date
  • -10.91% one year
  • 18.53% three years
• Expense ratio: 0.035%
• Above-average risk — 6 on a scale of 1 to 10

4. Fidelity 500 Index Fund (FXAIX)

This fund looks for results that correspond to the total return of U.S. common stocks. At least 80% of assets are invested in stocks included in the S&P 500 index. A few of the fund’s top holdings are Microsoft, Apple, Amazon, Alphabet and Berkshire Hathaway.

• Average annual returns
  • 7.43% year to date
  • -7.74% one year
  • 18.59% three years
• Expense ratio: 0.015%
• Above-average risk — 6 on a scale of 1 to 10

5. Fidelity Total Market Index Fund (FSKAX)

Managers of this fund aim for investment returns that track the total return of a broad range of domestic equities. With that in mind, they put 80% of the fund’s assets into securities included in the Dow Jones U.S. Total Stock Market Index. Major holdings include Microsoft, Apple, Amazon and Alphabet.

• Average annual returns
  • 6.76% year to date
  • -8.75% one year
  • 18.35% three years
• Expense ratio: 0.015%
• Above-average risk — 6 on a scale of 1 to 10

6. Fidelity Capital & Income Fund (fa*gIX)

When it comes to Fidelity index funds, investors with their eyes on retirement often want a bond option because of its relative safety. The Fidelity Capital & Income Fund invests in both equity and lower-quality bonds to provide investors with income and capital growth. The growth aspect makes this a higher-risk fund than the typical bond fund, but it has a long track record of solid returns.

• Average annual returns
  • 3.60% year to date
  • -2.68% one year
  • 11.49% three years
• Expense ratio: 0.67%
• Average risk — 5 on a scale of 1 to 10

7. Fidelity Floating Rate High Income Fund (FFRHX)

The Fidelity Floating Rate High Income Fund invests at least 80% of assets in floating-rate loans, which the prospectus notes are often lower-quality bonds. Despite that, the fund has lower-than-average risk and high returns.

• Average annual returns
  • 3.45% year to date
  • 2.73% one year
  • 8.26% three years
• Expense ratio: 0.68%
• Below-average risk — 4 on a scale of 1 to 10

8. Fidelity US Sustainability Index Fund (FITLX)

This fund tracks the MSCI USA ESG Index, which targets mid- and large-cap companies with positive environmental, social and governance performance that also share risk and return characteristics with companies in the fund.

• Average annual returns
  • 7.74% year to date
  • -8.41% one year
  • 18.18% three years
• Expense ratio: 0.11%
• Above-average risk — 6 on a scale of 1 to 10

Why Invest In Fidelity Index Funds?

Fidelity index funds feature comparatively low costs well suited to buy-and-hold investors. Fidelity equity funds combine low expenses and good growth potential with index funds heavily tilted toward technology and consumer discretionary stocks. Bond funds provide a lower-risk option.

Investors looking for index funds that follow U.S. bond indexes and stock indexes of all market cap sizes, international equity markets, emerging markets and even bonds should consider Fidelity. You get a wide range of choices — including sustainable index stock and bond funds — allowing you to construct an asset-allocated portfolio just right for your needs and investment timeline. Some Fidelity index funds even pay dividends.

Daria Uhlig contributed to the reporting for this article.

Data is accurate as of April 7, 2023, and is subject to change.

Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.