Fidelity Mutual Funds

Fidelity Mutual Funds is the next family of funds we're going to discuss in this series.  We'll start that discussion with a brief history of Fidelity.  Next, we'll talk about their fee structure.  Finally, we'll identify some of their top performing mutual funds.

Fidelity Family of Funds

Fidelity Fund, or what is known as Fidelity Investments today, was established in 1943 with the belief that making money for its shareholders was best achieved through intensive research.  Today, Fidelity claims to employ the largest staff of managers, traders, and analysts in the mutual fund industry.  Nearly 42,000 employees are engaged in these activities worldwide.

Fidelity is one of the largest mutual fund families in the world; with over $1.9 trillion in assets under management (September 2018).  Fidelity offers more than 500 mutual funds including money market funds, domestic and international stock funds, bond funds, index funds, and specialty sector offerings.  Fidelity offers investors a wide range of services including 529 plans, Roth IRAs, Traditional IRA accounts, and even access to non-Fidelity funds.

Fee Structure and Returns

According to Morningstar, Fidelity fee structures are Average to Below Average when compared to other mutual funds.  This includes domestic stocks (0.74%), international stocks (1.10%), municipal bonds (0.57%), and taxable bonds (0.63%).  The majority of assets controlled by Fidelity, nearly 50%, are invested in domestic stocks. (September 2018)

The minimum investment to open an account at Fidelity is just $2,500, and most assets (96.4%) are held in no-load mutual funds.  This is an important point when considering the impact of fees on the investment's return.  As of September 2018 the average return on Fidelity mutual funds is 10.91% over the past five years.

Top Rated Fidelity Mutual Funds

It would be hard to talk about Fidelity mutual funds without a quick mention of the Magellan Fund.  At times the largest mutual fund on the market, Magellan's assets hover around $18 billion.  Unfortunately, Magellan has underperformed the S&P over the last several years, and its total return over that timeframe is 18.54% (September 2018).

With that brief introduction behind us, let's take a look at the top rated Fidelity mutual funds:

Fidelity Capital & Income (FAGIX)

  • Assets:  $12.4 billion
  • Category:  High Yield Bond
  • Specialty:  None
  • Top Three Holdings:  Ally Financial 8%, Alibaba Group, and Altice France 7.38%
  • Load:  None
  • Minimum Investment:  $2,500
  • Expense Ratio:  0.67%
  • 5-Year Average Return:  6.93%

Fidelity Advisor High Income (FAHYX)

  • Assets:  $1.9 billion
  • Category: High Yield Bond
  • Specialty:  None
  • Top Three Holdings:  Ally Financial 8%, Bausch Health Companies 5.88%, Ingergen 7%
  • Load:  4.00%
  • Minimum Investment:  $2,500
  • Expense Ratio:  0.91%
  • 5-Year Average Return:  6.54%

Fidelity Pacific Basin (FPBFX)

  • Assets:  $915.2 million
  • Category:  Large Growth
  • Specialty:  Diversified Pacific/Asia
  • Top Three Holdings:  Tencent Holdings, Taiwan Semiconductor, Alibaba Group Holding
  • Load:  None
  • Minimum Investment:  $2,500
  • Expense Ratio:  1.11%
  • 5-Year Average Return:  8.22%

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