Fidelity Investments is one of the biggest and best-known asset management companies in the world. Launched in 1946, the company has over $2.5 trillion in assets under management as of October 2018, and offers mutual funds and exchange-traded funds (ETFs); it provides investment advice and manages qualified retirement plans.
Among its mutual funds, Fidelity offers a wide variety of ultra-low-cost products. Low expenses and fees are particularly advantageous because fees eat directly into returns. L. While the potential return an individual sees on many investments is unknown, expenses are the one piece investors can control. Lower expenses mean more money in their portfolios, and ultimately their pockets.
Index mutual funds are typically the lowest-cost products available. Index funds passively replicate a chosen benchmark and do not require the additional costs of fund management and research teams. With many actively managed funds having difficulty matching their benchmark, index funds make for ideal core holdings within most portfolios. Many Fidelity index mutual funds, such as the ones listed below, offer a combination of solid historical performance and low fees.
Fidelity Spartan 500 Index Fund
The Fidelity Spartan 500 Index Fund (FUSVX) is not only one of the largest mutual funds to track the Standard&Poor's (S&P) 500 Index, it is also one of the cheapest. With a net expense ratio of just 0.04%, this fund ranks as one of the lowest-cost investments in the entire mutual fund universe. This expense ratio means that for every $1,000 invested in the fund, Fidelity charges just 40 cents per year in fees.
Fidelity NASDAQ Composite Index Fund
Sometimes, the concept of low cost is relative. While the Fidelity NASDAQ Composite Index Fund's (FNCMX) 0.29% expense ratio does not move this fund into the cheapest category, it is still among the cheapest funds tracking the NASDAQ Composite Index. This fund also holds the distinction of carrying a Morningstar five-star rating in the large-cap growth category.
Fidelity Spartan International Index Fund
International mutual funds tend to have higher expense ratios due to the added cost of factors such as global research and currency risk. Started in 1997, the Fidelity Spartan International Index Fund (FSIVX) tends to stick with larger global names to limit risk and has a net expense ratio of just 0.20%. It also ranks as one of the least expensive in the foreign blend fund category.
Fidelity Spartan Mid Cap Index Fund
Fidelity offers a particularly robust lineup of mid-cap fund choices with eight different funds sporting a four-star or five-star Morningstar rating. The Fidelity Spartan Mid Cap Index Fund (FSCKX) is one of those. With an expense ratio of 0.025%, it ranks as one of the cheapest ways to get exposure to medium-size stocks around.
Fidelity Spartan Real Estate Index Fund
Real estate can be a notoriously risky place for investors to put their dollars to work, but the diversification benefits that come from adding this asset class to diversify a portfolio are notable. The Fidelity Spartan Real Estate Index Fund (FSRVX) has a relatively short history (it began in 2011), but its 0.07% net expense ratio ranks among the lowest in the sector.
Fidelity Inflation-Protected Bond Index Fund
Treasury inflation-protected securities (TIPS) are a relatively new addition to the investing landscape, but they have gained much interest from those seeking protection from economic risk. The Fidelity Inflation-Protected Bond Index Fund (FSIYX) has not delivered much in the way of returns to investors due to the current low-rate, low-inflation environment, but it carries a four-star Morningstar rating and a 0.09% net expense ratio.
Fidelity Spartan Total Market Index Fund
The Fidelity Spartan Total Market Index Fund (FSTVX) is similar to Fidelity's Spartan 500 Index Fund, except this fund adds small-cap and mid-cap exposure to the mix. It makes an ideal core "all-in-one" portfolio holding and charges only 0.04% annually.