TD Ameritrade 300

Best Fidelity Index Funds


Best Fidelity index funds with top Morningstar rating. The top performing Fidelity index funds for IRA investing: NASDAQ (FNCMX), S&P 500 (FXAIX), DOW Jones (FSKAX), and FSMAX.



Best Fidelity Index Funds


Fidelity is among the best when it comes to offering Index Funds, which they have been offering for nearly 30 years, when you look at fees and returns. Fidelity has introduced zero expense ratio index funds and also offers zero minimum Fidelity Index Funds that require no minimum to open an account and zero account fees for retail accounts, all while offering 24/7 live customer support!

This article will showcase, over 10 years, a Fidelity Index Fund for the S&P, Dow, NASDAQ, and then a bonus coverage you will not want to miss! Before discussing each one, what is an Index Fund and why should you invest?


What is an Index Fund and why should you invest?


Investing in an index fund does not enlist a fund manager but rather buys a broad representation, and sometimes all of the securities in an index (e.g., S&P 500). An index fund is a mutual fund that aims to match the risk and return of that index rather than out-perform it.

The reason Index Funds are popular with investors is because they generally have lower expenses, referred to as Net Expense Ratio, than managed funds. They also offer broad diversification of the investments which helps reduce risk and thus lowers turnover in the portfolio.

Below are four Fidelity Index Funds across the Dow, NASDAQ, and S&P 500 indexes, plus a bonus coverage.


NASDAQ – FNCMX


FNCMX was designed in 2003 to provide investment returns that closely correspond to the performance of the Nasdaq Composite Index by normally investing at least 80% of assets in common stocks included in the index.

The Total Net Assets of FNCMX is $12 Billion with a Net Expense Ratio of 0.29%.

The top three stocks being held in FNCMX are Apple (AAPL at 11.06%), Microsoft (MSFT at 8.65%), and Amazon (AMZN at 7.93%).

The 10-year return of the fund, before taxes, is 18.02% compared to 18.22% for the NASDAQ Composite. The turnover for FNCMX is higher than many others at 17%


Fidelity NASDAQ Index Fund


S&P 500 – FXAIX


FXAIX is an index fund that was created in 1988 to provide results that correspond to the performance of the S&P 500 Index by normally investing at least 80% of assets in common stocks included in the index.

The Total Net Assets of FXAIX is $328 Billion with a stellar Net Expense Ratio of only 0.02%.

The top three stocks being held is in FXAIX are Apple (AAPL at 6.71%), Microsoft (MSFT at 5.58%), and Amazon (AMZN at 4.35%).

The 10-year return of the fund, before taxes, is 13.90% compared to 13.91% of the S&P 500. The turnover for FXAIX is an amazing 4%!


Fidelity S&P 500 Index Fund


DOW - FSKAX


FSKAX is an index fund that was created in 1997 to provide results that correspond to the performance of the Dow Jones Index by normally investing at least 80% of assets in common stocks included in the index.

The Total Net Assets of FSKAX is $66 Billion with a minuscule Net Expense ratio of only 0.02%.

The top three stocks being held is in FSKAX are Apple (AAPL at 5.47%), Microsoft (MSFT at 4.55%), and Amazon (AMZN at 3.55%).

The 10-year return of FSKAX, before taxes, is 13.76% compared to 13.75% of the Dow Jones. The turnover for FSKAX is 11%.


Fidelity DOW Index Fund


Bonus Coverage – FSMAX


The bonus coverage is for the fund FSMAX. It was created in 1997 but is unique in that it seeks to provide results to correspond to the performance of mid to small US companies by normally investing at least 80% of assets in common stocks in the Dow Jones US Completion Total Stock Market Index.


Fidelity Best Index Fund


You will notice that the top three holdings, mentioned below, are not only different companies than the other funds mentioned above, but their holding percentages are MUCH smaller too which is due to the spreading out (owning) across many more stocks. The Total Net Assets are $40 Billion with a higher Net Expense Ratio of 0.90.

The top three stocks being held in FSMAX are Square Inc (SQ at 1.17%), Zoom Video (ZM at 1.07%), and Uber Technologies (UBER at 1.01%). The 10-year return of FSMAX, before taxes, is 13.14% compared to 13.01% of the Dow Jones US Completion index. The turnover for FSMAX is 15%.


Best Brokers For Fidelity Funds


Broker Review Promotion
Offer
Stock/ETF
Commission
Mutual Fund
Commission
Maintenance
Fee
Annual IRA
Fee
Firstrade 2 free stocks and NO commissions on ALL trades. $0 $0 $0 $0
Ally Invest Up to $3,000 cash bonus + transfer fee refund. $0 $9.95 $0 $0
TD Ameritrade Get $0 commissions and ACAT fee reimbursement. $0 $49.99 $0 $0


Fidelity Index Funds Summary


Outside of the unique fund of FSMAX, you will notice that the other three (FNCMX, FXAIX, and FSKAX) funds mentioned are all holding the same top three companies, however, their holding percentages of the same three companies vary drastically from one fund to the next.

The reason for this is because even though they were created to each mirror a different index, holding the same powerful companies such as Apple (AAPL), Microsoft (MSFT), and Amazon (AMZN) allow them to delegate the risk of the rest of that fund’s holdings across the index in which they are mirroring. This is supposed to reduce the risk of the fund, thus providing you with safer, market comparable, long term returns.