6 FIDELITY INDEX FUND STRATEGIES FOR THE AVERAGE JOE (2021)

in case you weren't already aware fidelity is a great place to own index funds why do you ask well fidelity has two advantages over its counterpart vanguard fidelity definitely has the lowest expense ratios in the business and they have no minimum required and initial investments into their index funds which is a big deal for some beginner investors with vanguard who generally require a 3 000 minimum initial investment for most of their admiral shares index funds plus you may already have a fidelity brokerage or retirement account in which you want to own fidelity investments so in this video i want to share with you six different fidelity index fund strategies for the average joe complete beginner investor out there so that you can grow your money be financially free and retire the way you want to in the future let's get started [Music] hey guys before we get started make sure to hit that subscribe button below the video to ensure you do not miss any future videos i post make sure to leave a comment below saying you subscribed and i promise to respond personally to your comment all right let's go ahead and get started here with the very first fidelity index fund investing strategy and that is what i call the single fund portfolio you know your investment portfolio does not need to be complicated and with fidelity you've got three great options here to have one specific investment in your portfolio and just set it and forget it over the long term that's what this portfolio would be good for somebody who has a long time horizon for investing and ultimately they're okay with little bumps and bruises along the way as long as the trajectory is up over the long term the first option available here is the fidelity s p 500 index fund ticker symbol f x a i x the s p 500 fund tracks the top 500 companies in the united states based on market capitalization this fund has a current price per share of 130 dollars and 68 cents and it has a zero dollar minimum initial investment unlike vanguard which has a three thousand dollar minimum investment additionally it's got an expense ratio of point zero one five percent compared to vanguard which is point zero four percent this phone was created in 1988 year to date it's up 0.39 one year return is 18.4 three-year is 14.17 five-year return 15.21 and 10-year return 13.87 you can see here the top 10 holdings in this fund uh represent 27.34 of the assets in the portfolio you've got apple microsoft amazon facebook tesla google berkshire hathaway johnson and johnson and jpmorgan chase there are 508 holdings in this index fund next up we have the fidelity total market index fund ticker symbol fskax and unlike the s p 500 this one has a little bit more broader of a perspective here the total market index fund has a total of 3532 holdings as of december 31st it tracks the entire stock market at least 80 of the assets in common stocks included in the dow jones u.s total stock market index which is the performance of a broad range of stocks 3532 covers the big ones the medium-sized stocks and the small companies out there the fund currently has a price per share of 109.9 cents per share a zero dollar minimum initial contribution and that same point zero one five percent expense ratio year-to-date the fund is up one point two seven percent the one-year return 20.78 the three return point four one percent five year return fifteen point three eight percent and the ten year return thirteen point seven four percent when we go down here and look at the actual assets and the fun you're gonna see it's very similar to the s p 500 you've got 22.33 of the portfolio made up of just the top 10 holdings even though there's 3532 holdings the top 10 just the top 10 make up almost a quarter of the total assets you got the same top 10 here apple microsoft amazon facebook tesla google berkshire hathaway johnson johnson and jp morgan chase third option we have available here is a different index to track the nasdaq composite index you can track with a fidelity exchange traded fund fidelity's best holdings are definitely their indexed mutual funds however they do have a few etfs which is also an index fund in this case the fidelity composite index tracking stock it's an etf current price per share 504 504.80 and this fund tracks the nasdaq composite index which is a collection of very tech heavy stocks not all tech but definitely a larger majority of technology related companies the net expense ratio for this specific etf is 0.21 percent so definitely a little bit higher than the other two but you can see here that the performance of this etf is epic a 10 000 investment in 2010 would now be worth almost 70 000 we check out here the quarter end average annual returns the one-year return 44.94 the three-year 24.76 the five-year return 22.26 10-year return 18.42 and the life of the etf returned 12.97 as of september of 2003. we look down here at the top 10 holdings there are 1 000 holdings in the etf but the top 10 make up 44 of the total holdings you've got very similar companies here you've got apple microsoft amazon facebook google tesla google again there's google class c and then google class a shares nvidia corporation paypal and comcast corporation any of these three different holdings could be a great one fund portfolio if you're looking for more diversification you're probably going to go with the total market however if you're looking for the highest returns of the three you definitely want to go with the nasdaq composite index okay fidelity index fund strategy number two is going to be utilizing a small mid and large cap index fund so the opportunity here is to take a look at both small size companies through a small cap index fund medium-sized companies through a specific fund and then large cap funds the idea with the three different funds is that you might want to utilize a higher ratio of the smaller funds versus the larger versus you know with one of those one fund portfolios you're getting just the large cap or primarily the heaviest weighting in the largest companies with a small mid and large cap fund selection with three different funds you can select more of the smaller companies or maybe a equal weighting between all three of them say 33.33 for the large medium and small companies here so for the large cap we would utilize the fidelity 500 index fund which tracks the 500 largest companies that's the one we already talked about so we're not going to talk about this one more then we have the fidelity mid cap index which is fsmdx fidelity mid cap index fund they have an expense ratio of 0.025 percent and a minimum initial investment of zero dollars if we scroll down here we can see that the top 10 holdings make up 4.38 of the total portfolio 825 holdings as of december 31st and you can see the top holdings are twilio twitter ide xx align technology spotify kla corporation docusign lululemon synopsis and chipotle mexican grill you can see the performance year-to-date is up 3.15 the one your return is 17.11 three-year return 11.6 five-year return 13.4 and the lifetime return 14.08 and for the fidelity small cap fund we have the fidelity small cap index fund ticker symbol f s s n x and this fund has an expense ratio of .026 percent a minimum initial investment of zero dollars and if we scroll down here we can see up top here actually the year-to-date return is up seven point five three percent small cap stocks have definitely had a resurgence here in the beginning part of january 2021. the one you return we'll call it 20 three-year return 10.36 five-year return 13.43 and the life of the fund is 13.58 return you can see the small cap index fund has 2050 different holdings in the uh fund the top 10 holdings make up 4.05 percent and you've got companies like penn national gaming caesars entertainment plug power sun run marathi therapeutics darling ingredients ultragenics pharma decker's outdoor iivi and arrowhead pharmaceuticals so like i said if you're looking to get balance across all three sec different types of capitalization in the stock market you can go with an equal weighting across each of these three or you can weigh yourself heavily more in medium or small cap funds all right index fund strategy number three here is gonna be utilizing fidelity zero index funds fidelity has four separate fidelity zero funds and the reason why these funds are so special is because they have a zero percent expense ratio there is no cost to hold these funds all right the first fidelity zero fund you can take a look at here is the fidelity zero total market index fund this is a play based off of the total market the fidelity already has fskax they also have fzrox it's got a zero percent expense ratio it was created in august of 2018 it has a minimum initial contribution of zero dollars you can see since it's so new it only has a year-to-date return a one-year return and a lifetime return so year-to-date up one point one nine percent one year return 20.5 percent and the lifetime return 14.85 so it's also a total market fund and you can see here the top 10 holdings make up 22.71 of the portfolio same companies up here at the top it's got 2442 holdings so it's got about a thousand less holdings than the total market index fund fskax so if that's more important to have that more broad diversification then you can own the actual um low cost fskax but if you're looking for that zero expense ratio then you can go ahead and own f-z-r-o-x next up we have the fidelity zero international index fund f-z-i-l-x and the international index fund invests at least 80 of its assets into securities included in the fidelity global xus index and in depository receipts representing securities included in the index so it's all non-u.s companies here you can see here the top 10 holdings make up 10.92 percent and there are 2 126 holdings as of december 31st you've got alibaba 10 cent holdings samsung taiwan nestle roach holdings novartis asml toyota and lvmh you can see here the international zero fund is up 2.72 year-to-date one-year return 11.05 and lifetime it's up 7.57 again it's a fairly new fund it an inception date of august of 2018. so if you're looking to get foreign exposure in your portfolio you can combine this potentially with a different fidelity zero fund to capture the entire market or to get more balance to your portfolio third zero fun we have here is the fidelity zero large cap index fund this one is very similar to the fidelity 500 index fund but as long as they don't say s p 500 they can pay a lot less money to the standard and poor's with s p which is the one that owns the naming rights to the s p 500 so instead they just call it the fidelity zero large cap index fund this fund has a zero percent expense ratio and it was created in september of 2018 and the minimum interest will cost again zero dollars the price per share 13.49 it has a year-to-date return of 0.3 percent one-year return is up 21.12 lifetime up 15.19 we scroll down here to see the portfolio again it has 516 holdings so just a few more companies than the s p 500 it's a very similar portfolio here the top 10 holdings in the fund make up 26.54 of the assets in the total portfolio and then lastly we have the fidelity zero extended market index fund f f-z-i-p-x and this is an extended market the goal of this fund is to capture the entire united states stock market with the exception of not including the 500 largest companies that are in the s p 500. to year-to-date this fund is up six point three four percent and the one-year return is up sixteen point five nine percent lifetime eight point four four percent again zero percent expense ratio zero minimum cost to invest top ten holdings make up five point eight one percent of the total portfolio top 10 holdings are zoom crowdstrike match group pinterest moderna teledoc etsy and phase energy zillow group and keurig dr pepper there are 1928 holdings in this fund so quite a bit of holdings here like i said you can combine this specific zero fund with maybe the s p 500 or that large cap zero index fund to get a capture of the entire stock market or to give a little bit of a weighting to maybe the large or you maybe you want to weight the extended market higher you have that opportunity to own those two portfolios those two funds and actually do that waiting that you desire all right fidelity index fund strategy number four here is going to be utilizing fidelity freedom funds which is another way of saying target date funds which is what vanguard uses for their terms so fidelity freedom funds are target date funds which allocate their assets based on a specific target retirement year for example fidelity freedom 2020 fidelity freedom 2035 2040 all the way up to 2065. so these target day funds known as freedom funds are meant for the investor who wants to be really hands off they don't want to manage their portfolio they don't want to manage their asset allocation over time they purely want to buy an investment now continue to contribute to that fund and just set it and forget it and these funds are meant for that purpose so if you were to own fidelity 2065 you have a lot of time between now and then to invest which means that the bulk of the assets are going to be in stocks versus a very small amount if any in bonds and over time as you get closer and closer to your retirement age the assets will then reallocate to be heavier weighted in the bonds and less in stocks this gives you balance in your portfolio and it makes it easier for you to avoid any issues when you're close to retirement you can see here that if you were to select the freedom fund 2055 then the asset allocation would be 54 in stocks and 36 percent in international stocks 10 in bonds and essentially a very small amount in short-term funds but over time as you get closer and closer to your retirement you'll see here that in 2055 actually let's go back here we'll go halfway through let's say 2042. then it'll be 40 stocks 32 international stocks 18 bonds and then if we go a little bit later here we've got 38 stocks 24 international stocks and 36 bonds and then all the way into 2056 we've got uh 2057 called 20 56 31 stocks 21 international stocks and 41 bonds and then further into retirement you can see that it's primarily in bonds as you go further and further along in along the years all right fidelity index fund strategy here is going to be utilizing fidelity growth funds three different options here we've got the federally large cap mid cap and small cap growth fund let's walk through them one by one here we've got the fidelity large cap growth index fund fspgx then we've got the mid cap fund fmdgx and the small cut fund which is going to be fidelity small cap growth f e c g x let's start with large cap you can see here that it's a large cap growth fund it's got an expense ratio of .035 percent all three funds have a zero minimum to invest you can see here down here the holdings in the top and the large cap growth are 456 holdings top 10 holdings though make up 44.2 percent of the total portfolio we've got apple microsoft amazon facebook tesla google visa mastercard and nvidia growth companies that are still large companies you can see here year-to-date the fund is actually down 1.14 and the one-year return is up 38 three-year return is up 22.9 lifetime return percent with an inception date of june 2016. then we've got the mid cap fund fmdgx mid cap growth fund has an expense ratio of 0.05 percent and it's up year to date 2.2 percent with a one-year return of 34 and a lifetime return of 26.55 again this fun was created in july of 2019 so still relatively new as we scroll into the holdings we can see that there are 349 holdings as of december 31st and the top 10 holdings up here make up 11.71 of the total portfolio we've got ide xx align technology spotify kla corporation docusign lululemon twilio chipotle cadence design and viva systems and then we can see here we've got the fidelity small cap growth which is up year-to-date 7.27 percent a one-year return of 34.4 and a lifetime return of 27.9 this fund has an expense ratio of point zero five percent and a price per share of thirty dollars forty one cents if we scroll down here to the portfolio we can see that the total holdings is one thousand one hundred twenty nine companies the top ten holdings though make up six point six six percent of the portfolio top 10 holdings are plug power sun run marathi therapeutics ultragenics decker's outdoor caesar entertainment arrowhead pharmaceuticals churchill downs natera and rh so depending on your risk profile here you could utilize an equal weighting in the large mid and small cap funds here if you'd like or if you prefer to have a heavier weighting in any one of them you can do that you can go 40 and then 30 and 30 in the other two or you could whatever one you prefer to weight yourself in you can do that here so this is another index fund strategy you can use all right the sixth fidelity index fund strategy we're gonna look at here is the fidelity four and one fund here which is ffnox you should think of this as kind of like a balanced fund it's a four in one fun though let's start by looking at the actual composition here we go down here to composition um and let's click over here we can see that currently it's made up of four different funds the fidelity 500 index fund which we've already talked about the fidelity extended market index fund which as we've already talked about is the mid-size and smaller size companies in the stock market here and then we've got fidelity international and fidelity u.s bond market so this fund has weighted 60 in united states equities or stocks 25 percent in international equities and then 14.4 in investment-grade bonds which is the fidelity u.s bond index fund you get more of a balanced approach this way the growth upward is more smooth because you don't have a lot of the larger dips that you would see if all of your investments were in stocks you can see that this fund has an expense ratio of 0.13 the net expense ratio 0.11 it's got a price per share currently at 55.98 a minimum to invest of zero dollars and then you're to date the the fund is up one point one four percent the one-year return is sixteen percent three-year return is 10.7 five-year return 11.9 and 10-year return 10.24 so this might be a great option for somebody that is looking for a more balanced approach they're maybe a little more risk averse they don't want large dips in the stock market or maybe they want to have some risk in the portfolio they want to have some stock market exposure but they also want to balance that with bonds and international equities this can be a great option just to have one fund in the portfolio and it'd be a balanced approach all right guys so there you have it six different fidelity index fund strategies for the average joe out there i promise you one of these is great for you depending on your risk profile depending on how much time you have left until retirement one of these six index fund strategies with fidelity is gonna be a great fit for you if you haven't done it yet make sure you leave your two cents in the comments below and hit that subscribe button to join the average joe investing community where we talk about all things investing dividend stocks index funds with vanguard and fidelity and everything in between that's all i got for you guys have a great rest of your day and please continue to stay healthy both physically and financially have a good one [Music] you

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Keywords: fidelity index fund, fidelity index funds, fidelity index funds for beginners, fidelity index funds vs vanguard, fidelity index fund portfolio, fidelity index funds 2020, fidelity index funds 2021, index funds, index funds for the average joe, fidelity index funds for the average joe, Average joe on money fidelity

Id: 3rNBObH1HkQ

Length: 20min 9sec (1209 seconds)

Published: Fri Jan 29 2021