Fidelity index funds provide investors with a simple, low-cost method of diversifying their portfolios across several sectors of the market. The aim of an index fund is to track the returns of a stock market index, such as the S&P 500 or Russell 2000. Index funds can come in different forms, including mutual funds and ETFs. An index fund might buy all of the securities that comprise an index or just a representative sample.
Some investors pick a few stocks and hope for a couple of big winners, but the index fund investor buys and holds a wide range of securities, hoping to ride the wave of long-term market growth. This makes index funds more stable and better suited for retirement investments. Just keep in mind that, as with any investment, the money you put into an index fund is always at risk of losing value.
Best Fidelity Index Funds for Retirement
Here are some of the best Fidelity index funds:
- Fidelity Multi-Asset Index Fund (FFNOX)
- Fidelity Nasdaq Composite Index Fund (FNCMX)
- Fidelity Large Cap Growth Index Fund (FSPGX)
- Fidelity 500 Index Fund (FXAIX)
- Fidelity Total Market Index Fund (FSKAX)
- Fidelity US Sustainability Index Fund (FITLX)
This evaluation of the top Fidelity index funds to buy looked at several measures of performance. You’ll find the following information associated with each of these Fidelity mutual funds:
- Fund overview
- Average annual returns
- Expense ratio
- Level of risk
1. Fidelity Multi-Asset Index Fund (FFNOX)
Previously called the Fidelity Four-in-One Index Fund, the Multi-Asset Index Fund invests in seven Fidelity stock and bond index funds, allocating assets to achieve broad diversification.
- Average annual returns
- 12.72% year to date
- 8.46% one year
- 5.03% three years
- Expense ratio: 0.13%
- Average risk — 5 on a scale of 1 to 10
2. Fidelity Nasdaq Composite Index Fund (FNCMX)
This fund is designed to closely track the price and yield of the Nasdaq Composite Index. Fidelity normally invests at least 80% of the assets into common stocks included in the Nasdaq. Top holdings include Apple, Microsoft, Amazon, Nvidia, Alphabet and Meta.
- Average annual returns
- 37.58% year to date
- 18.37% one year
- 6.61% three years
- Expense ratio: 0.37%
- Above-average risk — 6 on a scale of 1 to 10
3. Fidelity Large Cap Growth Index Fund (FSPGX)
This fund invests at least 80% of its assets into securities included in the Russell 1000 Growth Index, with a focus on large-cap growth stocks. Major holdings include Apple, Microsoft, Amazon, Tesla and Alphabet.
- Average annual returns
- 13.64% year to date
- -10.91% one year
- 18.53% three years
- Expense ratio: 0.035%
- Above-average risk — 6 on a scale of 1 to 10
4. Fidelity 500 Index Fund (FXAIX)
This fund looks for results that correspond to the total return of U.S. common stocks. At least 80% of assets are invested in stocks included in the S&P 500 index. A few of the fund’s top holdings are Microsoft, Apple, Amazon and Nvidia.
- Average annual returns
- 20.28% year to date
- 10.14% one year
- 10.35% three years
- Expense ratio: 0.015%
- Above-average risk — 6 on a scale of 1 to 10
5. Fidelity Total Market Index Fund (FSKAX)
Managers of this fund aim for investment returns that track the total return of a broad range of domestic equities. With that in mind, they put 80% of the fund’s assets into securities included in the Dow Jones U.S. Total Stock Market Index. Major holdings include Microsoft, Apple, Amazon and Nvidia.
- Average annual returns
- 19.08% year to date
- 8.42% one year
- 9.07% three years
- Expense ratio: 0.015%
- Above-average risk — 6 on a scale of 1 to 10
6. Fidelity US Sustainability Index Fund (FITLX)
This fund tracks the MSCI USA ESG Index, which targets mid- and large-cap companies with positive environmental, social and governance performance that also share risk and return characteristics with companies in the fund.
- Average annual returns
- 22.99% year to date
- 12.47% one year
- 10.62% three years
- Expense ratio: 0.11%
- Above-average risk — 6 on a scale of 1 to 10
Why Invest In Fidelity Index Funds?
Fidelity index funds feature comparatively low costs well suited to buy-and-hold investors. Fidelity equity funds combine low expenses and good growth potential with index funds heavily tilted toward technology and consumer discretionary stocks. Bond funds provide a lower-risk option.
Investors looking for index funds that follow U.S. bond indexes and stock indexes of all market cap sizes, international equity markets, emerging markets and even bonds should consider Fidelity. You get a wide range of choices — including sustainable index stock and bond funds — allowing you to construct an asset-allocated portfolio just right for your needs and investment timeline. Some Fidelity index funds even pay dividends.
If you wonder about the performance of a Fidelity index fund, a good starting place is to compare it to the performance of the index it tracks. For example, as of Sept. 30, the S&P 500 index had returned 21.62% over the past 12 months and -8.25% over the previous three months. The Fidelity 500 Index Fund — which Fidelity says is designed to track the S&P 500 — reported a 12-month return of 21.61% and a three-month return of -8.24%. The fund’s performance was nearly identical to that of the index.
Index funds make sense for the average investor looking toward retirement. As famed stock picker Warren Buffett says, an index fund is a good way to avoid the risk of picking individual stocks and the effects of fees and expenses on your investments.
FAQ
Fidelity index funds all track a particular index, but that's where the similarities end. Find out more about them with these frequently asked questions.- What is the best Fidelity Total Market Index Fund?
- That is actually the name of a particular fund, but it's not Fidelity's only total market index fund. While this one tracks the Dow Jones U.S. Total Stock Market Index, the Fidelity Zero Total Market Index Fund tracks the Fidelity U.S. Total Investable Market Index. Both have the the same top holdings with nearly identical weightings, and their performance differs by less than 0.25%. Even their expense ratios are nearly identical — 0% for the Zero Total Market fund and 0.015% for the Total Market fund.
- What is the best S&P 500 index fund on Fidelity?
- Fidelity offers just two S&P 500 index funds: its own Fidelity 500 Index Fund and the Vanguard 500 Index Fund Admiral Shares. The Fidelity fund is better. While the funds' performance is nearly identical, the Fidelity fund has a lower expense ratio, no transaction fee and no minimum investment. The Vanguard fund imposes a $75 online transaction fee and has a $2,500 minimum investment requirement.
- Is the Fidelity 500 Index Fund good for retirement?
- This fund could be a good retirement investment for an investor who is comfortable with the moderate risk inherent in stock funds and wants the diversity of a broad range of stocks as opposed to investing in individual stocks.
- Are Fidelity index funds a good investment?
- Fidelity index funds can be a good choice for investors whose investment goals and risk tolerance are a good fit for the specific fund they're considering investing in. If in doubt, consider meeting with a fiduciary financial planner who can make recommendations based on your individual situation.
Daria Uhlig contributed to the reporting for this article.
Data is accurate as of Nov. 27, 2023, and is subject to change.
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