Reduce stress and maximize returns with a long-term approach.
In 2022, it’s easy to get caught up in the churn of the news cycle, but there’s mountains of investment research out there that shows it’s more profitable for investors to think in terms of years or even decades instead of days or weeks. Not only do you reduce the fees and taxes associated with active trading by taking a hands-off approach, but you reduce your stress level, too. If you’re interested in buy and hold investments for the long haul, then consider these seven best Fidelity mutual funds. The following products all have a minimum of four out of five stars from analyst firm Morningstar, no additional transaction costs and annual fee structures that are lower than their peer group.
Fidelity Large Cap Growth Enhanced Index Fund (ticker: FLGEX)
A great example of Fidelity’s more active and tactical approach to investing is FLGEX. It’s a large-cap growth fund, but unlike competitors that just take the largest stocks out there with growth-like flavors, there’s a more sophisticated approach here. Fidelity uses computer-aided, quantitative analysis to select stocks that it thinks have the biggest potential to provide higher total returns than their peers. Right now, those are some Big Tech staples like Microsoft Corp. (MSFT), but you’ll also find payments giant Mastercard Inc. (MA) near the top of the list. That shows how this Fidelity mutual fund isn’t your typical indexed offering.
Expense ratio: 0.39%, or $39 for every $10,000 invested annually
Fidelity Value Fund (FDVLX)
The flip side of growth is, of course, value. And FDVLX offers a similarly tactical approach to the market. One of the biggest distinctions is that this top Fidelity mutual fund skews smaller. After all, that tends to be the way investors can truly find undervalued stocks instead of chasing the usual high-profile names that are almost always efficiently priced. You may not recognize some of the top holdings in this fund right now, including construction supply firm Builders FirstSource Inc. (BLDR) or storage unit operator CubeSmart (CUBE), but that’s part of the appeal because this value offering looks beyond the usual suspects.
Expense ratio: 0.79%
Fidelity Global Equity Income Fund (FGILX)
Taking a slightly different approach to low-risk stocks, FGILX places a priority on dividend stocks that offer a steady stream of income to investors. And unlike the prior funds, it has a mandate to look overseas and seek out the best opportunities regardless of geography. You’ll still find slightly more than half of the portfolio allocated to U.S. stocks, including megabank Wells Fargo & Co. (WFC) and health care diagnostics giant Danaher Corp. (DHR). Foreign stocks include companies such as Taiwan Semiconductor Manufacturing Co. Ltd. (TSM) and Irish business services firm Accenture PLC (ACN), to offer a global flavor to your portfolio in one of Fidelity’s top mutual funds.
Expense ratio: 1.02%
Fidelity Select Health Care Portfolio (FSPHX)
If you really want a tactical approach to your portfolio, you don’t have to stick to the big picture strategies of growth versus value. Instead, you can rely on many of the top Fidelity mutual funds that offer sector-level exposure. It may not sound like a long-term approach, but one sector in particular has proven its strength time and time again: health care. After all, the one thing that is almost certain in life is that we all get sick and old, and we all need drugs and medical care at some point. Fidelity Select Health Care Portfolio may be a bit more volatile than the broader funds on this list, but it’s still a great long-term bet on this trend.
Expense ratio: 0.69%
Fidelity U.S. Sustainability Index Fund (FITLX)
Admittedly, energy stocks have been hot in 2022, but fossil fuels may not be the best long-term investment in the age of climate change. So investors looking to take a more sustainable position with their portfolios should consider FITLX. The fund holds large and mid-size U.S. companies that rank highly on ESG ratings — that is, environmental, social, and governance metrics — relative to their peers. Perhaps unsurprisingly, you’ll find a lot of tech stocks like Apple Inc. (AAPL) and Google parent Alphabet Inc. (GOOGL) that take strides to make green corporate campuses and reduce their carbon footprints. And similarly, you won’t find Big Oil companies, as energy makes up a mere 1.4% of the portfolio at present.
Expense ratio: 0.11%
Fidelity Capital & Income Fund (FAGIX)
Looking beyond stocks, it’s important to acknowledge the importance of diversification in a long-term investing strategy. This high-yield bond fund from Fidelity helps provide an alternative to equities and delivers a generous 3.5% yield in the process. Admittedly, the portfolio is a bit riskier than some other bond funds, as it includes only corporate bonds instead of the more rock-solid U.S. Treasury bonds. But the yields are better, and with 843 different issuers making up the fund, it is well diversified. If you’re looking for an alternative to stocks, FAGIX could be worth considering.
Expense ratio: 0.68%
Fidelity Strategic Real Return Fund (FSRRX)
If you’re not particularly interested in moving in and out of different investments to adapt to changing market conditions, then consider this “set it and forget it” mutual fund. FSRRX is an asset allocation fund that targets a mix of roughly 25% inflation-protected debt securities, 25% floating-rate loans, 30% commodity-linked derivative instruments, and 20% real estate investment trusts and other real estate-related investments. None of these assets are particularly growth-oriented, but this top Fidelity fund is more about protecting your nest egg than making aggressive bets. And considering it’s up 5% so far in 2022 in a volatile market, investors seeking low-risk and defensive options that hang tough in any environment may want to give this top Fidelity fund a look.
Expense ratio: 0.75%
The seven best Fidelity mutual funds to buy and hold:
— Fidelity Large Cap Growth Enhanced Index Fund (FLGEX)
— Fidelity Value Fund (FDVLX)
— Fidelity Global Equity Income Fund (FGILX)
— Fidelity Select Health Care Portfolio (FSPHX)
— Fidelity U.S. Sustainability Index Fund (FITLX)
— Fidelity Capital & Income Fund (FAGIX)
— Fidelity Strategic Real Return Fund (FSRRX)
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7 Best Fidelity Mutual Funds to Buy and Hold originally appeared on usnews.com
