8 Best Fidelity Index Funds To Buy and Hold Forever: High Growth

in today's video I plan to go over the top eight mutual funds from Fidelity for the greatest growth that you can buy and hold forever the methodology that I use for picking These funds really comes down to four criteria it needs to have higher than average returns and it needs to be similar to the S P 500 two it should be relatively low in expenses and the next is the risk should be considered medium to low and the last point is to provide some form of diversity amongst the funds if I would have kept with only the top three criteria I'd wind up with eight funds that were all the same now one of the things that I'm not showcasing in this video is any form of specific investment strategy such as a three-fund portfolio where it would also include mixing in some International stock alongside some of the slow and steady bonds instead I'm keeping with my four criteria which keeps it simple however I do see these funds as falling into two main categories when choosing them and the first is my foundational mutual funds where I may invest a little bit more of my portfolio and give it added weight because I expect it to do the majority of the lifting the second group is reporting cast or my backup singers that they may not do all the work but they can step up on occasion and they can give me more depth and diversity to My overall portfolio I'm going to list the funds in no particular order the 10th one isn't going to be the worst and the first one isn't going to be the best they all happen to fit within the criteria for being in the top eight and the first fund from Fidelity is Fidelity's Mega cap stock fund and I felt it was best to start off with a strong foundational fund that's going to do the majority of the lifting when compared to the S P 500 it had a similar performance where this funds returned at the 10-year was at 11.98 percent three year was at 15.59 and year to date is at 2.25 percent and depending on when you see this video the performance is clearly going to be very different but the point is to show the comparison to the S P 500 to provide a point of reference next the expense ratio is at 0.61 percent with a dividend yield of 1.27 percent and a capital gains of 51 cents a share and the turnover rate happens to be at three percent now if you aren't familiar with looking at at the capital gains or the turnover rate I'll briefly explain what it is capital gains are experienced when the funds or the assets are sold for a profit and that's shared amongst the shareholders of that fund you can then choose to either withdraw the capital gains similar to a dividend or you can have it reinvested into the fund itself regardless of your choice you will be paying capital gains tax as a long-term capital gains regardless of when you bought the fund and as a reminder capital gains tax can range anywhere from zero percent fifteen percent or twenty percent depending on your individual tax rate this is just a detail that you're going to need to be aware of when you're buying your fund so that you aren't caught off guard when it comes to tax time and as for the turnover rate this is how often assets within the fund are bought and sold a low turnover rate means that very few assets are being sold whereas if the rate is high then there's a lot of activity going on with buying and selling and having a high turnover rate isn't necessarily a bad thing you would expect to have a higher turnover rate on an actively managed fund as a generality this will often lead to a higher capital gains but that's it's not always true the strategy of Fidelity's Mega cap stock fund is normally investing at least 80 percent of its Assets in common stocks of companies with Mega Market capitalizations happens to be companies with market caps similar to companies in the Russell top 200 index or the S P 100 as you can see with the top 10 companies they make up 44 of the overall fund these are all very large companies with a fair amount of diversity within the sectors overall this fund only contains 104 assets Mega cap by definition means that each company should have a capitalization of 200 billion or more so it happens to be the biggest of the big companies this fund stands out to be because it has one of the highest three-year returns at 15.59 percent while holding the largest companies in its portfolio to really keep it on track the next fund is the Fidelity Health Care Services portfolio and this is a fund that I consider to be part of my Supporting Cast to help really fill out and provide diversity and with its focus being on health care I see this is an area that's going to be a staple that's only going going to grow over time this month's performance at the 10-year is a respectable 14.6 percent the three year is 14.5 percent and year to date is not so good at a negative 8.3 percent and I get that the year-to-date number isn't great but it does open the door for buying it out of value and the true impact of this fund will really be seen over time next the expense issue is at 0.71 with a dividend yield of 0.25 percent and a capital gains of 6.71 cents a share and it happens to have a turnover rate of 17 and as you can see the turnover rate is somewhat high and it also has a much higher capital gains in fact this fund has both the highest expense ratio and capital gains out of all the funds that I'm going to review today and here's a snapshot of the top 10 companies ranging from United Health Group to CVS Health all big names in the health care sector where they're all relatively stable these top 10 make up 75 percent of the Holdings where the fund only has 31 total assets which may explain some of the reason why the turnover is high AI because they have such few Holdings within the fund overall I like this fund because we all need health care regardless of where we're at in life Healthcare stock also tends to be relatively stable during times of recession and that's why I see this as a good fund to have as support for my foundational funds before moving on I have a favor to ask if you like my content please consider pressing the like button so my channel can grow and I'd also love it if you'd consider subscribing so you can be up to date with all of my latest content now we'll move on to the third fund today which is the Fidelity 500 Index Fund that has a 10-year return of 11.7 percent 14.8 percent over three years and 2.46 percent year-to-date as you can see this is near identical performance to the S P 500 which makes this a great foundational fun to carry the expense ratio is one of the lowest at .015 percent with a dividend yield of 1.63 percent and a capital gains of 64 cents a share and has a turnover rate of only two percent and as for the strategy of the Fidelity 500 Index I'll give you the cliff notes it's essentially mimicking taking the S P 500 which you see in the performance this fund has its top 10 Holdings making up 25 percent of the portfolio which has just over 500 Holdings there's not much more to add to this one it's sort of the bread and butter of mutual funds where I'd expect most people to have it but an item that I do want to point out is that its dividend yield of 1.63 is the highest among all of today's funds as well as the expense ratio happens to be the lowest at 0.015 percent now on to the fourth fund which is the Fidelity's NASDAQ Composite Index Fund with a 10-year return of 14.47 percent three-year return of 14.18 and year to date is 9.48 this fund has one of the best performances at the 10-year Mark and for year to date while the expense ratio is at 0.31 percent with a dividend yield of 0.8 percent and there is no capital gains and the turnover rate is at four percent the top 10 Holdings make up 44 of the portfolio which is spread out across over 3 000 funds I like this fund because it's spread out across so many assets making it a solid growth index option with quite a bit of diversity over overall it stands out from most funds due to having one of the highest 10-year return at 14.47 percent and it's year-to-date it's also at 9.48 due to its Holdings being in over 3 000 assets I see this as a strong foundational fund that I would hold probably the longest so if you'd like to see each of these funds in a spreadsheet compared to one another I have a link below that does just that along with those funds I have several others that I was considering putting in the video but they just didn't make the cut so there's several that you can look at and I also have hyperlinks to the prospectus on Fidelity itself now moving on to the fifth fund of Fidelity's growth and income portfolio fund which has a 10-year return of 10.45 percent a three year at 19.94 and the year-to-date is at negative 0.13 percent and the expense ratio happens to be at point five seven percent and it has a dividend yield of 1.6 percent with a capital gains of 83 cents a share and it has a turnover rate of 12 percent and as for the strategy of this fund the focus is primarily on dividends and showing capital appreciation with a focus on growth and value stocks and the potential bonds here and there the top 10 Holdings make up 35 of the fund across 217 assets the mix of Holdings is a bit different from many of the other growth funds due to its focus on dividends this is a great supporting fund for me where it stands out with a higher three-year return at 19.94 and its higher dividend yield of 1.6 percent as for me I like to have several funds with a strong dividend to really help balance out the portfolio the next fund is Fidelity's large cap growth Index Fund which hasn't been around for 10 years but the three year is at 14.56 percent and the year to date is at 8.98 the expense ratio is one of the lowest at 0.04 percent and it has a dividend yield of 0.8 percent with no capital gains and the turnover rate is at 14 percent as for the strategy of this fund well it's a little bit different from the other ones in the sense that it focuses on the Russell 1000 growth index but you're still going to see a lot of the same players as in the other funds the top 10 Holdings make up 43 percent of the group and it only has 518 assets this fund is a great add-on where it stands out with its low expense ratio of 0.04 percent and its high year-to-date growth of 8.98 it's only real downside is that it hasn't been around for 10 years to give you a little bit more of a historical view the seventh font on today's list is Fidelity's total market index fund with a 10-year return of 11.12 percent three years at 14.37 percent and year to date is at 2.11 the expense ratio is nearly the lowest at 0.02 percent and it has a dividend yield of 1.55 which is also one of the highest on today's list it has no capital gains and the turnover rate is at three percent and for the strategy on this fund it's just as the name implies it tries to include the majority of stock within the Dow Jones and the total stock market and as for the top 10 Holdings well it isn't a new story from the others but they do make up 21 across the fund of nearly 4 000 assets this fund is clearly a foundational fund where it's providing the most diversity to mimic the overall Market and I would expect many of you to already have this one the performance isn't the best out of the group but it does shine a little bit brighter with its high dividend at 1.55 percent and its low expense ratio of 0.02 percent today's last fund will be Fidelity select semiconductors portfolio which has a 10-year return of 24.35 percent a three year of 27.28 and year to date of 31.21 the expense ratio is at 0.68 percent with a dividend yield of 0.14 and the capital gains is at 95 cents a share and this has a relatively High turnover rate of 31 the top 10 Holdings for this fund Make Up 77 and this fund is unique for many of the others with a heavier focus on companies like tsmc teradyne and lamb research for me I see this fund as more of a support fund and not a foundational one simply because it carries a little bit of added risk yes the growth is high and semiconductors are really the backbone for all of our technology but this is also an area of a lot of turmoil and a focus of moving more of the fabric education to the states which I fully support and in case you were curious the current Holdings in this fund only has 4.6 percent from Taiwan and over 92 percent from the US so I see this as a strong supporting growth fund for my overall portfolio that is based primarily in domestic companies that concludes today's video on the top eight high growth mutual funds from Fidelity with a little bit of diversity hope you're able to get some value out of today's video and thanks for watching

Channel: BWB - Business With Brian

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Id: xdEunmLrhb4

Length: 11min 25sec (685 seconds)

Published: Tue Mar 21 2023