Fidelity Investments is the country’s fourth-largest mutual funds manager with more than $2 trillion of assets under management (AUM) as of Sept. 30, 2015. Its family of mutual funds includes 21 funds that earned five-star overall ratings from Morningstar. All fund portfolio and annualized total return information is based on data for the period ending Dec. 31, 2015.
Fidelity GNMA Fund
The Fidelity GNMA Fund invests in fixed-income securities issued by the Government National Mortgage Association (GNMA). These securities are often called Ginnie Maes. The fund's primary investment vehicles are mortgage-backed securities (MBS) with a pass-through feature. A MBS pass-through security is based on a pool of mortgages serviced by another party which collects the payments, subtracts a fee and pays what is left to the security's holder.
Ginnie Maes are considered safe investments because they are backed by the full faith and credit of the U.S. government. The fund is also allowed to invest in other government-backed securities to meet its high relative income and preservation of capital objective. The GNMA fund is an intermediate-term fund with an average maturity date of 5.6 years. The shorter maturity date reduces the yield as well as the interest rate risk. Keep in mind that maturing securities can be reinvested at a higher interest rate. Also, many of the securities include capital repayment, which is reinvested on a steady schedule.
Overall, the fund is not an aggressive investment choice. However, it is well managed with no load fee and a low 0.45% expense ratio relative to its 2.02% yield.
Fidelity NASDAQ Composite Index Fund
The Fidelity NASDAQ Composite Index Fund is a passively managed fund that tracks the return of the NASDAQ Composite Index. The NASDAQ Composite Index consists of more than 5,000 companies with stocks traded through NASDAQ, and the fund has holdings in more than 2,200 of these firms. It does not need to own shares in all index components, as 90% of the index's value is covered by the NASDAQ 100 Index, which consists of the 100 largest NASDAQ companies.
The NASDAQ features a dynamic mix of companies with greater weight in technology compared to other indexes, such as Standard & Poor's (S&P) 500 Index or the Dow Jones Industrial Average (DJIA). The NASDAQ's company mix results in more volatility than these two indices, but it has provided investors with a better return. The fund has no sales charge and a low 0.29% expense ratio. It has annualized total returns of 19.6% over three years, 14.73% over five years and 9.49% over 10 years.
Fidelity Select Biotechnology Portfolio
The Fidelity Select Biotechnology Portfolio is a low-diversity fund that invests in companies that create new biotechnology products, companies that those new products, or supply and service companies in the sector. The top 10 holdings make up 36.29% of the fund's net asset value (NAV), with the remainder invested in more than 240 other firms.
The Select Biotechnology Portfolio has provided strong annualized total returns of 36.5% over three years, 32.64% over five years and 16.93% over 10 years. Fidelity Investments makes 9,825 funds available through its mutual fund platform, which is the highest-returning fund for all three time periods.
The same dynamics that fuel the high returns can also come with great volatility. Year to date (YTD) as of Jan. 26, 2016, the fund has fallen by 22.17% compared to an 8.75% decline for the NASDAQ Composite Index Fund.