9 Best Fidelity Index Funds to Buy (2022)

These are the best-performing Fidelity funds for retirement over the past decade.

Recent stock market volatility probably has your investments pretty shaken up. So shaken up, your portfolio may look nothing like you originally intended, which is why this is the best time to rebalance your retirement portfolio. While many of the following funds have been the best-performing over the past 10 years as of Feb. 29, many are down about 20% year-to-date. Meanwhile, the Fidelity Long-Term Treasury Bond Index Fund is up 21% year-to-date. This is where your opportunity to rebalance lies: Sell your appreciated bond funds to buy more of these beaten-down equity funds while they're on sale. (Note: You may or may not have access to these in your company plan. If you don't, all of them are available in individual retirement accounts.)

Fidelity OTC Portfolio (ticker: FOCPX)

This five-star Morningstar-rated fund is among the best-performing large growth Fidelity funds in the past decade. The Fidelity over-the-counter fund invests more than 80% of its portfolio in stocks trading in the Nasdaq composite index or over-the-counter markets. OTC markets have more small- and medium-sized companies, which generally offer more growth opportunities. That explains the high returns of this fund, but it also means the fund comes with more risk. Add the lower transparency and regulation on OTC markets, and it's easy to see why FOCPX gets a high-risk rating. Investors should also note the fund's top 10 holdings account for nearly 44% of the overall portfolio, which is in turn nearly 45% invested in the technology sector. High-performing this one may be, but highly diversified it is not.

10-year average annual returns: 16.96%
Net expense ratio: 0.89%
Risk: high versus U.S. large growth category

Fidelity Blue Chip Growth Fund (FBGRX)

It's not easy to find blue-chip companies with big growth potential; giants can only grow so much bigger, after all. But this is exactly what the managers of FBGRX aim to do. This blue-chip large growth fund targets companies in the S&P 500 and Dow Jones Industrial Average, and companies with at least $1 billion in market capitalization. From those criteria, management selects only the companies it feels offer above-average growth potential. Bear in mind this means the fund is heavily invested in technology (almost 38% of the total portfolio) and consumer discretionary (almost 22% of the total portfolio). It also carries a lot of its weight (more than 43%) in its top 10 holdings, which include common names like Apple (AAPL), Google's parent company, Alphabet (GOOG, GOOGL) and Amazon.com (AMZN).

10-year average annual returns: 15.66%
Net expense ratio: 0.8%
Risk: above average versus U.S. large growth category

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Fidelity Nasdaq Composite Index Fund (FNCMX)

If you favor index funds, the best-performing Fidelity fund for your retirement is FNCMX. The fund aims to track the performance of the Nasdaq, which includes more than 3,000 stocks. FNCMX holds 2,065 of them. As with FOCPX, it's heavily weighted toward information technology -- but then, so is the U.S. economy, and FNCMX has less weight in IT (33.66%) than the Nasdaq Composite Index (41.55%). FNCMX also carries a lot of its weight in its top 10 holdings (more than 33% of the portfolio), which include familiar names like Apple, Amazon and Microsoft Corp. (MSFT). So while FNCMX is another high performer, order this one with a side of diversification for a less volatile retirement. Also note that for an index fund, FNCMX is on the expensive side at 0.3%.

10-year average annual returns: 15.47%
Net expense ratio: 0.3%
Risk: above average versus U.S. large growth category

Fidelity 500 Index Fund (FXAIX)

FXAIX is offered by more than 14,000 of the 23,000 401(k) plans on Fidelity's platform, according to the company, making it one of the most accessible Fidelity funds for retirement. It also happens to be among the best-performing Fidelity funds for retirement with a 10-year return of 12.64% as of Feb. 29. It has taken a beating, however, down almost 24% year-to-date, which could signal a buying opportunity. With a tidy expense ratio of only 0.015%, the Fidelity 500 Index fund is one of the lowest-cost funds of the 10 best-performing Fidelity funds for retirement. Formerly FUSEX, the fund replicates the S&P 500, making it a nice option for index investors or those looking for large blend exposure.

10-year average annual returns: 12.64%
Net expense ratio: 0.015%
Risk: average versus U.S. large blend category

Fidelity Total Market Index Fund (FSKAX)

Fidelity's Total Market Index Fund provides exposure to a broader swath of the U.S. stock market than S&P 500 funds like FXAIX. With more than 3,400 holdings, FSKAX reaches far beyond the S&P 500. No single company makes up more than 4% of the overall portfolio. For broad stock market exposure at index-fund pricing, FSKAX is definitely one of the best-performing Fidelity funds for retirement. That said, Fidelity's recently debuted Zero Total Market Index Fund (FZROX) accomplishes the same thing with no expense ratio. It has also outperformed FSKAX since 2018, when the new zero-expense ratio funds were debuted. You likely won't find the Zero funds in your 401(k), as most providers wait until funds are at least 3 years old before adding them, but FZROX is available in any Fidelity IRA.

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10-year average annual returns: 12.46%
Net expense ratio: 0.015%
Risk: average versus U.S. large blend category

Fidelity Growth Strategies Fund (FDEGX)

Moving from the large-cap category into mid-caps now, which generally target companies with between $2 billion and $10 billion in market capitalization, FDEGX is the best-performing mid-cap fund. While it focuses on medium-sized companies, the fund may invest in small or large companies as well, provided the managers believe they offer the potential for accelerated revenue or earnings growth. FDEGX currently has more large-caps than mid-caps in its portfolio, with its top 10 holdings being well over the $10 billion market capitalization mark. That said, they aren't your usual suspects. Names like Global Payments (GPN), Fiserv (FISV) and KLA Corp (KLAC) don't make the top 10 of many (if any) large-cap funds.

10-year average annual returns: 12.08%
Net expense ratio: 0.56%
Risk: average versus U.S. mid-cap growth category

Fidelity Extended Market Index Fund (FSMAX)

Another popular fund in Fidelity 401(k) plans is the Fidelity Extended Market Index Fund. Benchmarked to the Dow Jones U.S. Completion Total Stock Market Index, which excludes companies in the S&P 500, FSMAX can be a good source of small- and mid-cap stock exposure and a nice complement to a large-cap or S&P 500 index fund. FSMAX is also highly diversified among those smaller companies with more than 3,100 holdings, the top 10 of which account for only about 5.4% of the portfolio, and representation in every market sector. If you like the sound of this fund, now could be the time to buy as it's down more than 30% year-to-date.

10-year average annual returns: 11.61%
Net expense ratio: 0.045%
Risk: above average versus U.S. mid-cap blend category

Fidelity Real Estate Investment Portfolio (FRESX)

(Video) Top 3 Best Fidelity Index Funds for 2022

If you want to add real estate to your retirement portfolio, the best-performing Fidelity real estate fund in the past decade is FRESX. The fund aims for capital growth with above-average income and a yield more than that of the S&P 500. It's managing to do that but barely, with a yield of 2.62% versus closer to 2% on S&P 500 funds like FXAIX. It invests primarily in the common stock of companies in the real estate industry or engaged in real estate investing, with the bulk being industrial and offices or residential. Over half of the portfolio's assets are in its top 10 holdings, but then with only 44 companies in the entire portfolio, this isn't too surprising.

10-year average annual returns: 11.3%
Net expense ratio: 0.74%
Risk: average versus U.S. real estate category

Fidelity Balanced Fund (FBALX)

For a less-aggressive approach to retirement investing, consider the Fidelity Balanced Fund. FBALX invests about 40% of its portfolio in fixed-income securities like bonds. Right now, it's just less than 30% in fixed income, which explains why Morningstar gives it a high risk rating compared with the 50% to 70% asset allocation category average. Its fixed income is primarily investment-grade credit, U.S. Treasurys and mortgage pass-through securities. With this more conservative approach to investing comes more conservative returns, however. FBALX rounded out the past decade with a 9.56% average annual return. So FBALX is more of a best-performing Fidelity fund for semi-conservative retirement investors. That said, it's a five-star fund from Morningstar and earned a score of 8.7 out of 10 from U.S. News & World Report.

10-year average annual returns: 9.56%
Net expense ratio: 0.53%
Risk: high versus U.S. allocation 50% to 70% equity category

Best Fidelity index funds to buy for retirement:

-- Fidelity OTC Portfolio (ticker: FOCPX)

-- Fidelity Blue Chip Growth Fund (FBGRX)

(Video) Best Fidelity Index Funds for the Easiest Investing Strategy Ever

-- Fidelity Nasdaq Composite Index Fund (FNCMX)

-- Fidelity 500 Index Fund (FXAIX)

-- Fidelity Total Market Index Fund (FSKAX)

-- Fidelity Growth Strategies Fund (FDEGX)

-- Fidelity Extended Market Index Fund (FSMAX)

-- Fidelity Real Estate Investment Portfolio (FRESX)

-- Fidelity Balanced Fund (FBALX)

FAQs

9 Best Fidelity Index Funds to Buy? ›

Here's a look at some of the top performers:
  1. Fidelity Multi-Asset Index Fund (FFNOX) ...
  2. Fidelity Nasdaq Composite Index Fund (FNCMX) ...
  3. Fidelity Large Cap Growth Index Fund (FSPGX) ...
  4. Fidelity 500 Index Fund (FXAIX) ...
  5. Fidelity Total Market Index Fund (FSKAX) ...
  6. Fidelity Inflation-Protected Bond Index Fund (FIPDX)
Jun 16, 2022

Is Fidelity good for index funds? ›

Fidelity is one of the most well-rounded brokerages available today, with no commissions on stock, ETF or options trades and a selection of no-expense-ratio index funds.

Is Fidelity 500 index fund a good buy? ›

Fidelity 500 Index Fund (FXAIX)

FXAIX posts returns that have historically outperformed its benchmark index, and it offers a 1.50% dividend yield that's pretty competitive.

Which Fidelity money market fund is best? ›

Fidelity U. S. Treasury money market fund is the safest of the lot while Fidelity U. S. Government Reserves and Fidelity Government Money Market Fund are a close second. Money market funds investing in commercial paper or debt issued by municipalities tend to carry a bit more risk.

Which Fidelity fund has the highest return? ›

Fidelity Growth Company is Fidelity's best large-company growth fund. Over the past decade, manager Steven Wymer has delivered a 22.7% annualized total return to shareholders, which trounces the 16.2% gain in the S&P 500.

How many index funds should I own? ›

How many index funds you own should depend on how diversified those indexes are. If you invest in well-diversified funds, you may only need one or two. If you invest in targeted funds that track specific sectors, then you should own many funds to build a broad, diversified portfolio.

Which is better VOO or FXAIX? ›

FXAIX and VOO are largely identical. Both track the same collection of stocks (the S&P 500 Index) and hence, are similar in dividend yield and annual returns. They also offer incredibly low fees. However, VOO is an ETF while FXAIX is a mutual fund, you can't trade a mutual fund all day.

Does Fidelity 500 index pay dividends? ›

The current dividend payout for stock Fidelity 500 Index Fund (FXAIX) as of Aug. 10, 2022 is 2.31 USD.

Which is better Vfiax or FXAIX? ›

If you look at the expense ratio and amount of capital needed, FXAIX will be a better choice as its expense ratio is lower than VFIAX. You also have the flexibility to invest a smaller amount into FXAIX, as there is no minimum sum to FXAIX as compared to VFIAX which requires a minimum sum of $3,000.

Is Fidelity better than Vanguard? ›

Fidelity and Vanguard both do a good job keeping costs fairly low, but Fidelity has a slight edge overall. Both brokers charge zero commission for stock and ETF trades, but Fidelity charges $0.65 per contract on options trades, while Vanguard charges $1 per contract for customers with less than $1 million in assets.

Does Fidelity have a S&P 500 index fund? ›

FUND INFORMATION

Fidelity® 500 Index Fund is a diversified domestic large-cap equity strategy that seeks to closely track the returns and characteristics of the S&P 500® index. The S&P 500® is a market-capitalization-weighted index designed to measure the performance of 500 large-cap U.S. companies.

Which is better Schwab or Fidelity? ›

After testing 15 of the best online brokers over six months, Fidelity (95.57%) is better than Charles Schwab (89.63%). Fidelity is a value-driven online broker offering $0 trades, industry-leading research, excellent trading tools, an easy-to-use mobile app, and comprehensive retirement services.

Is Fidelity a safe company to invest with? ›

Fidelity is a US stockbroker founded in 1946. It is regulated by top-tier authorities like the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). Fidelity is considered safe because it has a long track record and is regulated by top-tier financial authorities.

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