Aside from the time horizon, a few key characteristics distinguish a long-term buy-and-hold investment from a short-term trade.
One important factor is diversification. Is there enough breadth in the investment? While a single stock or sector might outperform over the short term, long-term trends often see reversion to the mean.
In contrast, it’s easier to bet on something broad like the global stock market outperforming over time versus narrower categories, like tech or small-cap stocks.
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Another critical factor is fees. Think of them as the reverse of dividends. A 1% annual dividend reinvested boosts compounding over time and, by the same logic, avoiding a 1% annual fee reduces a consistent drag on performance.
Thus, keeping costs low is one of the most effective ways to mitigate persistent headwinds and maximize returns in a long-term portfolio.
“Savvy investors understand the importance of keeping your costs low and your options open, and Fidelity funds have become popular because they offer just that,” says Andrew Latham, a certified financial planner and director of content at SuperMoney.com. “With no sales loads, low fees and no minimum investment requirements, it’s easier to start investing without breaking the bank.”
Here are seven of the best Fidelity mutual funds to buy and hold today:
| Mutual fund | Expense ratio |
| Fidelity Total Market Index Fund (ticker: FSKAX) | 0.015% |
| Fidelity 500 Index Fund (FXAIX) | 0.015% |
| Fidelity Zero Total Market Index Fund (FZROX) | 0% |
| Fidelity Zero Large Cap Index Fund (FNILX) | 0% |
| Fidelity Zero International Index Fund (FZILX) | 0% |
| Fidelity Large Cap Growth Index Fund (FSPGX) | 0.035% |
| Fidelity Large Cap Value Index Fund (FLCOX) | 0.035% |
Fidelity Total Market Index Fund (FSKAX)
“Personally, I like Fidelity mutual funds because they offer a variety of investment options, have low fees and are backed by a reputable company with a long history of success in the industry,” Latham says. If you’re seeking affordable U.S. market exposure, FSKAX is one of the cheapest options in Fidelity’s lineup. This mutual fund charges a 0.015% expense ratio with no minimum required investment.
FSKAX passively tracks the Dow Jones U.S. Total Stock Market Index, a benchmark of over 5,000 market-cap-weighted U.S. equities. However, FSKAX doesn’t replicate the index in its entirety. Instead, the fund “samples” the index by only including 3,895 holdings, which lowers costs and is more efficient. In addition, the fund’s capital gains distributions are fairly low due to a minimal 3% turnover ratio.
Fidelity 500 Index Fund (FXAIX)
“While it truly depends on each individual investor’s specific goals and objectives, I typically advocate for index funds in the accumulation phase, as these give great broad-market exposure with lower fees than actively managed funds,” says Wes Moss, managing partner and chief investment strategist at Capital Investment Advisors. For example, FXAIX provides exposure to the S&P 500 for a 0.015% expense ratio.
This benchmark tracks a market-cap-weighted basket of 500 large U.S. equities, selected on rules-based criteria and committee input. Factors considered include earnings consistency, prominence and size. Over the past 10 years, FXAIX has delivered a 13.1% annualized total return thanks to the S&P 500’s strong performance, giving it a coveted five-star Morningstar rating.
Fidelity Zero Total Market Index Fund (FZROX)
A major selling point of Fidelity funds is the availability of zero-expense-ratio options. Called “Fidelity Zero,” these funds charge a true 0% expense ratio. They eliminate costs by lending securities within the fund to generate income and by using proprietary indexes to avoid licensing fees. To replace FSKAX, an investor could buy FZROX, which tracks the Fidelity U.S. Total Investable Market Index.
The overall exposure provided by FZROX is very similar to FSKAX. Investors get a portfolio of over 2,500 market-cap-weighted U.S. equities with all the “Magnificent Seven” stocks — Apple Inc. (AAPL), Nvidia Corp. (NVDA), Microsoft Corp. (MSFT), Amazon.com Inc. (AMZN), Meta Platforms Inc. (META), Alphabet Inc. (GOOG, GOOGL) and Tesla Inc. (TSLA) — featured in the top holdings.
Fidelity Zero Large Cap Index Fund (FNILX)
Over the trailing five-year period, FXAIX returned an annualized 14.5%, strong performance by any measure. However, it actually lost to FNILX, which returned an annualized 14.6%. This Fidelity Zero fund pulled ahead thanks to additional tailwinds from its securities lending and lack of fees. Thus, if you want S&P 500 performance free of charge, consider buying FNILX instead of FXAIX.
This fund currently tracks the Fidelity U.S. Large Cap Index. Unlike the S&P 500, this benchmark is less active — there’s no committee process or earnings screen. It simply captures the largest 500 U.S.-listed stocks and weights them based on float-adjusted market cap. The result is a similar list of top holdings compared to FXAIX at an identical 3% annual portfolio turnover rate.
[5 Best S&P 500 Index Funds to Buy Now]
Fidelity Zero International Index Fund (FZILX)
“International investing can be a great diversifier for investors who are too heavily concentrated in U.S. stocks,” says Henry Yoshida, CEO and co-founder of Rocket Dollar. “With FZILX, you can invest internationally at zero cost — this is a win-win for any serious long-term investor.” This Fidelity fund tracks the Fidelity Global ex U.S. Index, which holds over 2,250 market-cap-weighted international stocks.
Unlike some international funds, FZILX isn’t just limited to developed-market countries like the U.K., Japan, Germany, France and Switzerland. The fund also provides exposure to many emerging-market countries like China, India and Taiwan. Buying FZILX can help investors diversify internationally while sidestepping the fees associated with currency conversion and American depositary receipts.
Fidelity Large Cap Growth Index Fund (FSPGX)
“FSPGX is a great way to overweight high-growth technology stocks without the risk of investing in any single large-cap growth technology company itself,” Yoshida explains. “You get exposure to the largest technology stocks today, along with over 300 other large-cap growth companies, all at a very low 0.035% expense ratio.” This ETF has even higher exposure to the Magnificent Seven stocks compared to FXAIX.
FSPGX is an example of a “style” fund — one that attempts to tilt toward stocks with certain characteristics. In this case, the style is growth — the Russell 1000 Growth Index used by FSPGX as a benchmark screens for higher price-to-book ratios and higher sales-per-share growth. Over the past five years, this fund has significantly outperformed the broad market, with an 18.9% annualized return.
Fidelity Large Cap Value Index Fund (FLCOX)
Contrarian investors looking to bet on value stock outperformance over the long term can find some useful Fidelity funds, too. A great option is FLCOX, which is the polar opposite of FSPGX. This fund tracks the Russell 1000 Value Index, providing it with exposure to over 870 holdings. Unlike FSPGX, FLCOX lacks the large overweight to technology, consumer discretionary and communications stocks.
None of the Magnificent Seven companies can be found in FLCOX’s top holdings. Instead, a number of “old economy” blue-chip stocks like Berkshire Hathaway Inc. (BRK.B), JPMorgan Chase & Co. (JPM), ExxonMobil Corp. (XOM), UnitedHealth Group Inc. (UNH), Walmart Inc. (WMT), Johnson & Johnson (JNJ) and Procter & Gamble Co. (PG) reign. The fund charges a 0.035% expense ratio.
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The 7 Best Fidelity Mutual Funds to Buy and Hold originally appeared on usnews.com
Update 01/08/25: This story was previously published at an earlier date and has been updated with new information.
