Fidelity Asset Manager 85%
Fidelity Asset Manager 85% (MUTF:FAMRX) is what Fidelity describes as a “target allocation” fund, providing investors with exposure to multiple asset classes in one individual fund.
The 85% in the name is the percentage allocated to equities, and the remaining 15% is invested in bonds. This particular target allocation fund is as high as you can go when it comes to stocks. As you ratchet down the risk, Fidelity increases the fixed-income component in the fund.
As a result of the fixed-income component, the 85% fund has an expense ratio of 0.82%, which is considerably less than the three previous funds. With lower risk often (but not always) comes lower returns. FAMRX is up 6.64% year-to-date, and during the past decade, it averaged an annual return of 8.8% — 390 basis points higher than its benchmark index. When you consider Microsoft (NASDAQ:MSFT) achieved a total annual return of 3.14% over those same 10 years, you can’t help but applaud its steady performance.