Top 7 Fidelity Mutual Funds for Long-Term Growth

Introduction:

Investing in mutual funds is a great way to grow your money over time. But not all funds are good for a long-term strategy. When choosing a fund to buy and hold, you should ask yourself:

Unlike individual stocks, which can be risky, mutual funds offer diversification. This means your money is spread across many companies, reducing the chances of losing everything if one company struggles. Investing in a well-diversified mutual fund makes it easier to stay invested during market ups and downs.

Fidelity offers many mutual funds that are great for long-term investors. Here are seven of the best Fidelity mutual funds to consider for a buy-and-hold strategy.

Summary

1. Fidelity 500 Index Fund (FXAIX)
2. Fidelity Total Market Index Fund (FSKAX)
3. Fidelity International Index Fund (FSPSX)
4. Fidelity ZERO Total Market Index Fund (FZROX)
5. Fidelity ZERO International Index Fund (FZILX)
6. Fidelity Large Cap Growth Index Fund (FSPGX)
7. Fidelity Freedom Index 2060 Fund Investor Class (FDKLX)

1. Fidelity 500 Index Fund (FXAIX)

• Expense Ratio: 0.015%
• Why Invest?
  • This fund tracks the S&P 500, which includes the 500 largest companies in the U.S.
  • It provides broad exposure to the U.S. stock market, offering a balance of stability and growth.
  • With low fees and strong historical returns, it’s a great choice for investors who want steady growth.

2. Fidelity Total Market Index Fund (FSKAX)

• Expense Ratio: 0.015%
• Why Invest?
  • Unlike FXAIX, which focuses on large companies, FSKAX tracks the entire U.S. stock market.
  • It includes about 3,900 stocks, offering exposure to small-, mid-, and large-cap companies.
  • This broader diversification reduces risk while still capturing overall market growth.

3. Fidelity International Index Fund (FSPSX)

• Expense Ratio: 0.035%
• Why Invest?
  • This fund provides exposure to international stocks in developed countries like Japan, the U.K., and Germany.
  • It helps investors diversify beyond the U.S. economy, reducing reliance on domestic market performance.
  • With low fees and a tax-efficient structure, it’s a cost-effective way to gain global exposure.

4. Fidelity ZERO Total Market Index Fund (FZROX)

• Expense Ratio: 0.0%
• Why Invest?
  • This fund is similar to FSKAX but has zero fees, making it highly cost-efficient.
  • It tracks a broad market index, allowing investors to participate in the entire U.S. stock market.
  • With no expense ratio, more of your money remains invested, maximizing long-term returns.

5. Fidelity ZERO International Index Fund (FZILX)

• Expense Ratio: 0.0%
• Why Invest?
  • Like FZROX, this fund has no fees, making it an excellent low-cost choice.
  • It invests in stocks from both developed and emerging markets outside the U.S.
  • By diversifying across global economies, it helps investors reduce risk while participating in worldwide growth.

6. Fidelity Large Cap Growth Index Fund (FSPGX)

• Expense Ratio: 0.035%
• Why Invest?
  • This fund focuses on large companies with high growth potential, including major tech giants like Apple, Microsoft, and Amazon.
  • It offers the potential for higher returns, but it can be more volatile than broader index funds.
  • Investors looking for strong long-term growth with exposure to industry leaders may find this fund appealing.

7. Fidelity Freedom Index 2060 Fund Investor Class (FDKLX)

• Expense Ratio: 0.12%
• Why Invest?
  • This is a target-date fund designed for investors planning to retire around 2060.
  • It starts with a higher allocation to stocks for aggressive growth and gradually shifts toward safer investments like bonds as retirement nears.
  • This automated adjustment reduces the need for frequent portfolio management, making it ideal for hands-off investors.

Frequently Asked Questions 

Q.1. What is a mutual fund?

A.1. A mutual fund is an investment that pools money from many people to buy stocks, bonds, or other assets. It provides diversification, reducing the risk of losing money due to poor performance by a single investment.

Q.2. What is an expense ratio?

A.2. The expense ratio is the fee a fund charges each year to manage your investment. Lower fees mean more of your money stays invested, improving long-term returns.

Q.3. Why choose index funds?

A.3. Index funds track the performance of a specific market index, offering diversification and lower fees compared to actively managed funds. They require minimal oversight and tend to perform well over time.

Q.4. What is a target-date fund?

A.4. A target-date fund automatically adjusts its investments over time, shifting from stocks to bonds as the investor gets closer to retirement. It is designed to simplify long-term investing by reducing risk as retirement approaches.

Q. 5. Should I invest in international funds?

A.5. Investing in international funds can help diversify your portfolio, reducing risk by spreading investments across different economies. It can also provide exposure to fast-growing markets that may outperform the U.S. in certain periods.

Conclusion

Choosing the right Fidelity mutual fund for a buy-and-hold strategy depends on your goals:

• If you want steady growth, FXAIX or FSKAX are solid options.
• If you want international exposure, FSPSX or FZILX can help.
• For a no-fee option, FZROX and FZILX are excellent choices.
• If you prefer an automated approach, FDKLX is a smart long-term investment.

By investing in diversified, low-cost funds and staying invested through market ups and downs, you can build wealth over time. Always consider your risk tolerance and investment goals before making a decision.

Important Note: Please Read Before You Invest

We're just sharing some helpful tips, but remember, investing comes with risks. We can't promise that these tips will always work or that you'll make money. Everyone's financial situation is different, so it's smart to do your research or talk to a financial advisor before you invest. Using these tips, you agree that you're responsible for your investment decisions and results.