Fidelity mutual funds are the foundation stone of fidelity investments i.e. the company was at its earliest beginnings a mutual fund called the fidelity fund. From there the company expanded not only its mutual funds, but its financial management abilities and financial planning services becoming a financial planning and services company with many unique and diversified mutual funds it manages for clients.
Types of Fidelity mutual funds:
Fidelity Investments has an array of mutual funds that focus on diversification, economic sectors, international differentiation, and specific financial instrument funds such as bond funds. Specifically, a few random selections of Fidelity’s funds include the following. The complete list of Fidelity’s funds and their returns and rankings can be viewed through www.fidelity.com.
• Fidelity Capital Appreciation Fund (FDCAX): Life time return of 12.12%, 4 star ranking
• Fidelity Disciplined Equity Fund (FDEQX) Life time return of 12.76%, 4 star ranking
• Fidelity Emerging Markets Fund (FEMKX) Life time return of 8.67%, 4 star ranking
• Fidelity Capital and Income Fund (FAGIX) Life time return of 10.41%, 5 star ranking
• Fidelity Arizona Municipal Income Fund (FSAZX) Life time return of 5.69%, 4 star ranking
As noted above, the above selections of mutual funds are random with the lowest performing life time return being at par with some certificate of deposit returns. Thus, if one has money to invest over the long term, and doesn’t mind the added risk of uninsured investments, such mutual funds clearly have decent returns over time.
Historical performance of Fidelity funds:
Fidelity makes use of a star rating system to monitor the performance of its funds against that of other major mutual fund managers. Many of Fidelity’s mutual funds have performance ratings of four stars or higher and these rankings are based on a combined rating of fund returns over various time intervals of the funds life. Since Fidelity started out as a mutual fund company and has been a mutual fund management and research company for over 60 years, it is clearly experienced and knowledgeable in the field and has a track record to prove it. In addition to its own star rating system are the individual fund performances themselves. Each fund has different levels of success, risk, diversification and may also be managed with different economic, and financial techniques, research methodologies and styles.
Advantages and disadvantages of Fidelity funds:
Fidelity is relatively transparent about the performance of its funds and doesn’t charge fees but rather expense ratios associated with the performance of the fund. The expense ratios vary on the type of fund and the extent of management involved with each fund, but can be between .1% and higher. Contacting Fidelity investments, visiting their website or researching fund statistics and prospectuses may assist in clarifying management and maintenance fees associated with fidelity funds.
Fidelity mutual funds aren’t insured meaning if the market they have invested in tanks i.e. declines dramatically, so too can the mutual fund’s value without recourse or indemnification. This can make the mutual funds somewhat of a risk so keeping this and the type of fund in mind is important. A few things to keep in mind when investing in mutual funds are the following:
• Risk level
• Management
• Fees and costs
• Historical performance
• Diversification and types of investments
Fidelity Investments is a private company meaning it is not subject to the same stockholder responsibilities as some larger public companies. This can have both advantages and disadvantages as private companies can have more decision making flexibility, however if the company is not well managed, the benefits of such flexibility can be inversed. For the most part Fidelity Investments has withstood the test of time, i.e. although its mutual funds are not immune from recessions and poor market performance, the company and its funds have persisted reasonably well through such times.