10 Best Fidelity Mutual Funds Of July 2024

It was a near toss-up between the Fidelity ZERO Large Cap Index Fund and the Fidelity ZERO Total Market Index Fund (FZROX). Both boast zero annual management fees. But one notable difference is that FZROX allocates 8% of its shareholder money to small caps. FNILX has zero small cap allocation. Another difference: FNILX outperformed its stablemate during the prior one, three and five years.

Also, FNILX’s “economic moat” rating by Morningstar is superior to its peer group’s and index’s. That means the research firm’s analysts believe FNILX holdings have what it takes to fend off rivals for the next 10 years. That’s due to factors like network effect, intangible assets, cost advantage, switching costs and economies of scale. And top holdings like Microsoft (MSFT), Apple (AAPL), Nvidia (NVDA), Amazon (AMZN), Alphabet (GOOG), Meta (META), Berkshire Hathaway (BRK.B) and Eli Lilly (LLY) keep posting big gains.

Investors might be wondering, “Why should I invest in a mid-cap fund when large-cap returns in general have dominated for years?” The answer: diversification. Trends don’t continue forever. Smaller companies tend to be more nimble than their larger-cap brethren, and over long periods they often outperform. The Morningstar gold-rated FSMDX outperformed its Morningstar mid-cap blend category’s average return over the past 10 years, although it lagged the broad stock market in the form of the S&P 500 Index.

About 75% of FSMDX consists of mid-cap stocks, while 16% are small caps and 10% are large caps. The fund carries a solid B+ financial health rating from Morningstar. This means that it has relatively low debt and high cash flow. Its profitability rating is a middle-of-the-pack “C.” That means its holdings are about average for a large pool of stocks tracked by Morningstar. The well-diversified FSMDX has only 6% of its assets in its top 10 companies.

Investors continue to clamor for companies committed to sustainable investment practices. This large cap ESG index fund delivers. Plus, seven-year-old FITLX has outperformed its large-cap blend Morningstar category over the prior one, three and five years. One reason for its outperformance is FITLX’s relatively high weighting versus its rivals in companies with competitive advantages such as brand recognition or patents, which make customers less likely to switch to rivals.

FITLX managers bet big on their best ideas. The fund has 45% of its money at work in its top 10 holdings. Several such holdings are popular among traditional funds not focused on sustainability. They include Microsoft, Nvidia, Tesla, Eli Lilly and Visa (V).

Launched in 1967 and managed since late 1990 by William Danoff, the Fidelity Contrafund is one of the giant fund family’s best-known names. FCNTX’s goal of capital appreciation focuses on selection of undervalued growth and value stocks. The reasonable 0.39% expense ratio and below average 16% turnover contributes to FCNTX’s category beating returns over the past one, three, five, 10 and 15 years.

FCNTX delivers below average risk and volatility versus category peers. The fund bets big on its top 10 holdings, with a 55% weighting. FCNTX has a roughly 14% stake on Meta platforms, formerly Facebook. Value leaning investors, who don’t want to miss the punch of growth stocks, should consider FCNTX.

The no cost Fidelity ZERO International Index Fund seeks to deliver returns in line with the total return of the foreign developed and emerging stock markets. It makes sense for a diversified investor to own international companies. The U.S. is only 42.5% of the cumulative value of stocks globally, according to Visual Capitalist. In general, higher investment returns correlate to lower expense ratios like this fund’s zero management fee. Returns by FZILX, which opened in 2018, roughly match its category’s average over the past one and five years.

With the U.S. stock markets trading around all-time highs, international stocks also offer more bargains with lower price to earnings ratios. FZILX’s more than 2,200 stocks ensure wide diversification. Still, FZILX’s top holdings include familiar brands such as Novo Nordisk (NOVO), Samsung Electronics, Toyota, Nestle (NSRGY), AstraZeneca (AZN) and Shell (SHEL).

A diversified portfolio typically includes a bond allocation. The idea is to offset the price volatility inherent in stocks and stock funds, and to provide income. Fidelity Strategic Income Fund has delivered on both counts. Its NAV stayed within a narrow range in the past 12 months, fluctuating only from $10.62 to $11.47. Meanwhile, its SEC yield is 5.34%.

FADMX is an actively managed multisector bond fund. Its 4.38 year average effective duration measures how sensitive the fund’s price will be to changes in interest rates. FADMX will likely gain about 4% with a 1% decline in interest rates, and vice versa.

The diverse fund reports an allocation of about 40% to high yield debt. Government and investment grade debt account for about 30% of fund assets. Emerging markets, floating rate and foreign developed markets debt are FADMX’s other big allocations. The fund outperformed its multisector bond fund category over the past one, three and five years.

Want to inject some high-octane fuel into your portfolio’s gas tank? But are you leery about the possibility of a correction among stocks, given high valuations among equities? In that case, it makes sense to avoid the most aggressive stock funds that have posted the very highest returns in recent years. Nasdaq Composite Index Fund is a good alternative. It gives you exposure to the technology and communications sectors, but with more moderate allocations to individual high-flyers than some more aggressive Fidelity sector funds.

FNCMX focuses on Nasdaq stocks, with roughly half of its money in the tech sector. Over the past 10 years, its average annual return is more than three percentage points better than the S&P 500 Index’s. Still, its volatility is roughly the same as the broad stock market’s.

Morningstar says 68% of FNCMX’s holdings have competitive edges that should fend off their rivals for at least 20 years. If you want to play it very safe, wait for a broad stock market pull back before investing in FNCMX.

The Fidelity Conservative Income Bond Fund is among the most steady fixed income offerings on our Best Fidelity Mutual Funds list. With a stable share price during the past 12 months and a current SEC yield of 5.20%, this ultrashort term actively managed bond fund is an attractive parking spot for money you’ll need within the next year or so.

FCNVX is a suitable replacement for a money market mutual fund, with the opportunity for a slightly higher yield. During the prior three, five and 10 years, FCNVX outperformed its Morningstar category. FCNVX’s high credit quality tilt is a feather in its cap.

Reflecting its name, Fidelity Balanced Fund consists of roughly 60% stocks and about 40% bonds. That suits buy-and-hold investors who want a relatively tranquil mix of growth plus income. Some FBALX managers have been at the helm since 2008. Launched in November 1986, FBALX has averaged a yearly return of about 9.5% since inception.

FBALX has a 30-day yield of 2.11%. FBALX’s asset allocation is flexible and can deviate approximately 10% from its customary 60% stocks and 40% bonds mix. Access to a wide range of Fidelity investment specialists adds to the category beating performance of FBALX.

Investors seeking a core bond portfolio should consider Fidelity Total Bond Fund. It outperformed its Morningstar category averages over the past one, three, five, 10 and 15 years. It has Morningstar’s gold rating. The fund managers have leeway that some conservative bond competitors lack. They’re allowed to allocate up to 20% in non-investment grade bonds, including high-yield and emerging markets. With a 30 day yield of 5.27% and an average effective duration of roughly six years, investors will enjoy cash flow and appreciation potential, should interest rates decline.

FTBFX is evenly split among government, corporate, and securitized bonds. The bonds’ credit quality is dispersed with 63% in AAA bonds and 17% in BBB, and roughly 11% allocated to BB and lower quality bonds. FTBFX benefits from the actively managed 177% annual turnover ratio of its nearly 7,000 bonds and a handful of other holdings.