5 Fidelity Mutual Funds You Can Hold Until You Die

fidelity mutual funds - 5 Fidelity Mutual Funds You Can Hold Until You Die

Source: Grk1011 via Wikipedia (Modified)

Fidelity Investments is one of only a few mutual fund companies that has a broad selection of great mutual funds in several different categories. Therefore it wasn’t too difficult to arrive at a solid handful of the best Fidelity mutual funds you can hold for the long term.

5 Fidelity Mutual Funds You Can Hold Until You Die

Fidelity has some of the cheapest index funds you can buy, several top rated U.S. equity funds and dozens of outstanding sector funds to choose from.

In fact, the most difficult task in selecting the best Fidelity funds is narrowing the list down to just five mutual funds. So to make to make our job easier, and more useful for you in building a portfolio, we picked one mutual fund each representing five different categories that you can hold for years, or even decades.

With that said, here are five of the best Fidelity mutual funds you can hold until you die.

Fidelity Mutual Funds You Can Hold Until You Die: Fidelity 500 Index (FUSEX)

Fidelity Mutual Funds You Can Hold Until You Die: Fidelity 500 Index (FUSEX)Expenses: 0.095%, or $9.50 per $10,000 invested annually
Minimum Initial Investment: $2,500

Any respectable list of mutual funds to hold for the long term must include cheap index funds, and Fidelity 500 Index (MUTF:FUSEX) is one of the best to buy.

When investing for long periods of time, it’s smart to use low-cost index funds. Their low expenses and passive management tend to outperform the higher expenses and human fallibility that make it nearly impossible for the vast majority of actively managed funds to beat the major market indices for time periods longer than a decade.

Rock-bottom expenses, tight index tracking and hundreds of top quality large-cap U.S. stocks like Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Exxon Mobil Corporation (NYSE:XOM), combine to make FUSEX one of the best S&P 500 index funds in the mutual funds universe.

Fidelity Mutual Funds You Can Hold Until You Die: Fidelity Contrafund (FCNTX)

Fidelity mutual fundsExpenses: 0.71%
Minimum Initial Investment: $2,500

Some of Fidelity’s best funds are actively managed funds, such as Fidelity Contrafund (MUTF:FCNTX), that have seasoned managers and outstanding performance records.

Not many actively managed funds can beat index funds in the long run, but FCNTX has the history to prove that this monumental feat can be accomplished.

The average annual return since its 1967 inception is an amazing 12.2%.

As its name suggests, Contrafund holds stocks with valuations the management believes are not fully recognized by the market. That means FCNTX shareholders will get access to growth stocks like Facebook Inc (NASDAQ:FB) and Alphabet Inc (NASDAQ:GOOG, GOOGL) and also value stocks like Berkshire Hathaway Inc. (NYSE:BRK.A, BRK.B).

Fidelity Mutual Funds You Can Hold Until You Die: Fidelity Mid Cap Enhanced Index (FMEIX)

Expenses: 0.6%
Minimum Initial Investment: $2,500

Fidelity mutual fundsMid-cap stocks have the potential of beating large-cap stocks and small-cap stocks in the long run, and Fidelity Mid Cap Enhanced Index (MUTF:FMEIX) is among the best mutual funds to capture this part of the market.

Often called “the sweet spot” of capitalization, mid caps generally have greater long-term growth potential than large caps but lower market risk than small caps.

Although FMEIX has only been around since December of 2007, the 6.5 years of performance history suggest that this mid-cap index fund has what it takes to be a long-term winner. For example, the five-year annualized return of 10.7% beats 92% of all mutual funds in the mid-cap blend category.

Part of the fund’s success can be attributed to its strategy. Like many other mid-cap index funds, FMEIX holds stocks, such as Southwest Airlines Co (NYSE:LUV), Applied Materials, Inc. (NASDAQ:AMAT) and Weyerhaeuser Co (NYSE:WY), which are found in the Russell MidCap Index.

But the “enhanced” aspect of the fund’s strategy has it focusing on stocks selected by computer-aided, quantitative analysis, for the purpose of finding mid-cap stocks that can outperform the benchmark.

Fidelity Mutual Funds You Can Hold Until You Die: Fidelity Select Biotechnology (FBIOX)

Fidelity Mutual Funds You Can Hold Until You Die: Fidelity Select Biotechnology (FBIOX)Expenses: 0.73%
Minimum Initial Investment: $2,500

Biotechnology stocks can see significant short-term volatility but the long-term fundamentals still look very positive for this area of the health sector and for funds like Fidelity Select Biotechnology (MUTF:FBIOX).

When taking a long-term, big-picture view, biotech stocks like FMEIX top holdings Regeneron Pharmaceuticals Inc (NASDAQ:REGN), Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) and Celgene Corporation (NASDAQ:CELG) will benefit from the converging factors of an aging U.S. population and advances in medical technology. These factors have been in place for years and look to remain for many more years. Therefore healthy performance, like 13.3% annualized returns since 1985 for FMEIX, provide clues about the years and decades ahead.

But shareholders who want to see returns like these need to be able to hold on during the big declines, such as those in the first half of 2016, when biotech stocks fell as much as 25% or more.

Fidelity Mutual Funds You Can Hold Until You Die: Fidelity Total Bond (FTBFX)

Fidelity Mutual Funds You Can Hold Until You Die: Fidelity Total Bond (FTBFX)Expenses: 0.45%
Minimum Initial Investment: $2,500

Among the best of Fidelity funds to hold for the fixed income portion of your portfolio is Fidelity Total Bond (MUTF:FTBFX).

And when the holding period is for years or decades, it’s tough to beat the total bond fund’s advantages of low expenses and a smart balance of passive and active investing that are parts of success in long-term investing.

FTBFX tracks the Barclays Aggregate Bond Index, although the fund employs some active management strategies, such as adding more exposure to high-yield bonds or using derivatives for leverage and risk management.

This investment style has paid off for shareholders in the past, as evidenced by the fund’s 10-year annualized return of 5.5%, which edges out that of 5.1% on the Barclays Aggregate Bond Index.

As of this writing, Kent Thune did not personally hold a position in any of the aforementioned securities. However he holds FUSEX and FCNTX in some client accounts. His No. 1 holding is his privately held investment advisory firm in Hilton Head Island, SC. Under no circumstances does this information represent a recommendation to buy or sell securities.


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